Harare — THE directors of Murray & Roberts (M&R) are seeking authority from shareholders to buy back 20 million shares through an arrangement that would be tabled at an annual general meeting (AGM) scheduled for November 12.
Last year, M&R's shareholders were presented with a similar special resolution but it expired before the directors could exercise the option.
A share buy-back refers to the process by which a company may reduce its capital by offering to purchase shares back from its shareholders, obviously at a price that entices them to sell.
The process reduces the number of shares on market to either eliminate any threats by shareholders who may be looking for a controlling stake or increase the value of the shares.
In a notice of the AGM issued this week, the directors said the shares would be purchased at a price not lower than the nominal value of $0,0002 per share.
The price should, however, not be higher than a price equivalent to 10 times the inflation adjusted net asset value per share provided the repurchases are not made at a price greater than 5 percent above the weighted average of the market value for the securities for the five business days immediately preceding the date of repurchase.
The authority to acquire the shares expires at the date of the company's next AGM, according to the notice.
M&R is a holding company with investments in three major segments, which are manufacturing, contracting and properties and agro-industrial sectors.
It was founded in 1974 and listed on the Zimbabwe Stock Exchange in the same year.
Chairman Paddy Zhanda revealed last month that the Group's construction unit was sitting on a full order book to February next year.
M&R's manufacturing unit was however, limping due to price controls and the general slowdown in infrastructure development.
Zhanda said the Group was also evaluating opportunities and possible areas of synergy in the region.
"We welcome the new political dispensation that was ushered in by the conclusion of political talks between the main political parties in Zimbabwe and trust this will provide the basis of resuscitating an enabling business environment in the country.
"We urge the business community to join hands with the politicians in implementing the deal expeditiously. We stand ready to play our part," said Zhanda in a statement accompanying M&R's results for the year ended June 30, 2008.