Zanaco share price Diluted

 

 

Bonus Share Issue

At the Annual General Meeting of the Company held on 30th March 2012, shareholders approved a Capitalisation Issue (“Bonus Share Issue”) by the Company. This will be an issue of bonus shares to existing shareholders at a ratio of 13 for 2, meaning 13 new additional shares issued for every 2 shares held by shareholders on the shareholder register as at 27th April 2012 the bonus share issue Record Date.

Purpose of the Bonus Share Issue

The primary reason for the Bonus Share Issue is to raise the minimum share capital of the bank from ZMK 11.55 billion to ZMK 86.625 billion in compliance with the minimum capital requirements of the Bank of Zambia as announced on 30 January 2012.

Implications of the Bonus Share Issue

ZANACO has opted to increase its share capital via a 13 for 2 Bonus Share Issue (13 new shares for every 2 shares held) as at Record Date. The primary effects of the ZANACO Bonus Share Issue transaction are:

• Increase in the amount of authorised shares from 1,500,000,000 to 10,000,000,000 shares of ZMK 10 par value each;


• Increase in the number of issued and fully paid up shares from 1,155,000,033 to 8,662,500,248 shares of ZMK 10 par value each;


• The issue and allotment of 7,507,500,215 new ordinary shares of ZMK 10 par value each to shareholders registered in the books of the company at the close of business on 27th April 2012 on a ratio of 13 new shares for every 2 existing shares held;


• The value of the bank will not change as the bonus-issue will be a book entry that reduces non distributable reserves (share premium) and increases share capital;


• No additional capital is raised, hence shareholders’ equity or net book value remains the same;


• The price per share of ZANACO on the LuSE will be diluted by a factor of 7.5 after the Bonus Share Issue is effected. Therefore the share price of Zanaco shares will be adjusted downwards by dividing the last trade price on 23rd April 2012 by 7.5 and reflecting the new price on the LuSE market effective 30th April 2012.

Zanaco now trades at about K150 - K160.I still like Zanaco as a bank very much, It has a sense of national pride in it which leverages it form bankruptcy.Warren Buffet is a strong supporter of Bank of America for similar fundamental reasons.Solid managment and a good history of making money and paying out dividends.

zanaco-plc-summary-trading-activity-report-2011 DOWNLOAD


MY VIEW IS ZANACO SHARES ARE A BUY RIGHT NOW,I ESTIMATE THEY WILL CLOSE THE YEAR ON A HIGHER NOTE.