Kampala — Scangroup Limited shareholders sitting at an Extra-ordinary General Meeting (EGM) in Nairobi approved the allocation and issue of 60,689,655 new shares to Cavendish Square Holding BV, a subsidiary of WPP, one of the world's leading advertising and marketing services groups.

In a statement released after the EGM, called to approve the transaction, following the conditional subscription agreement entered into by the company with WPP, the Company Chairman, Mr David Hutchison, said the approval by shareholders fulfills one of the key conditions to the transaction.

"Under the agreement, WPP has agreed to subscribe for the new shares at $0.28 Cents (Shs518) per share which will result in a cash injection of $17 million (Shs31 billion) into the company.

He added that: "Following this endorsement by shareholders, WPP will become the largest shareholder in Scangroup Limited with a total holding of 27.5 per cent.

For Scangroup, this investment by WPP is significant because it gives the company a strategic anchor shareholder who will play a significant role in the management and succession of senior management".

Scangroup Chief Executive Bharat Thakrar said the net proceeds from the issue of the new shares will be used to fund working capital requirement and the company's expansion in Kenya and other African markets in a bid to attain its vision of being the leading marketing services company in Africa by 2010.