adminGolden Sibanda Senior Business Reporter
OLD Mutual Zimbabwe has established a platform that will facilitate the trading of 25 percent of its shares allocated to various interest groups under its indigenisation compliance plan.
The trading of the shares will start today among approved investors and pre-approved buyers in conformity with regulatory bodies that govern indigenisation regulations.
Clients eligible to trade in the Old Mutual shares include Old Mutual Life Assurance Company Zimbabwe pensioners, pension funds that are clients of Old Mutual, strategic indigenous partners, Old Mutual Zimbabwe Group staff and Old Mutual Zimbabwe Group staff pensioners.
In addition, other persons or institutions that meet the indigenisation regulations criteria and are approved by directors of Old Mutual Zimbabwe Limited will be allowed to trade in the shares.
Old Mutual Zimbabwe group chief executive Mr Jonas Mushosho said on Friday the initiative follows the approval by Government of the financial institution’s indigenisation plan in 2012.
In terms of the Indigenisation and Economic Empowerment Act, foreign-owned companies are required to sell at least 51 percent of their issued share capital to local investors. Old Mutual Zimbabwe is controlled by Old Mutual (Netherlands) BV, a unit of Old Mutual Plc.
As such, aggregated beneficiary groups of the B class shares include employees (11 percent), client pensioners (8 percent), strategic partners (3,5 percent) and Kukura/Ukondla (2,5 percent).
“To manage continued compliance with indigenisation regulations, it was decided that the B class shares be introduced to the local market through the over the counter trading platform. In 2013, 29 million B class shares have vested and become available for trading,” he said. Old Mutual said the trading was launched to provide liquidity for the issued and fully paid B class shares in its capital while also ensuring compliance with indigenisation provisions.
Mr Mushosho said to trade in the shares buyers and sellers will first open accounts through submission of the usual documents and will have to go through a pre-approval process.
The pre-certification process is meant to ensure that potential buyers of the issued B class shares qualify or comply with the criteria set out in the firm’s indigenisation plan.
“Thereafter, they will submit and sell their shares as usual and the deal confirmations, payments and issue of certificates will be done in the usual manner,” said Mr Mushosho.
Specifically, approved and newly registered members of the company shall be required to sign an acceptance and irrevocable undertaking accepting the trading rules under the over-the-counter platform.
The trading platform and trading rules provided by the over-the-counter platform through Old Mutual Securities are similar to those applicable to shares listed on the Zimbabwe Stock Exchange.
Old Mutual said the major difference is only that the B class shares in the capital of the company shall be held by designated persons and can only be traded once vested through the over-the-counter platform to be administered, initially, solely by Old Mutual Securities. Through a special resolution passed by shareholders in 2012 Old Mutual Zimbabwe Limited was empowered to provide US$60 million assistance towards the purchase of the B class shares.
As part of the group’s indigenisation plan, in terms of an agreement reached in December 2012, it will also provide US$12 million to strategic partners, Stiefel Investments led by former CEO Luke Ngwerume for the purchase of 3,5 percent of the firm’s shares.
Online Reporter