FBC Holdings announces share repurchase program

  • Board of directors approves repurchase of up to 47 949 688 of common stock
  • The shares were held by ShoreCap II Limited
  • In 2020, FBCH reported a positive cash flow from financing activities of ZWL671.5M
  • Up from a negative CFF of ZWL420.7M a year earlier

HARARE – FBC Holdings Ltd. FBCH, the holding company of FBC Bank, cheers investors with a share buyback program.

When a company announces a stock buyback, aka share buybacks, it means that it intends to repurchase some or all of the outstanding shares it originally issued. In exchange for giving up ownership in the company and periodic dividends, shareholders are paid the stock’s fair market value at the time of the buyback. According to Investopedia, in recent decades, share buybacks have overtaken dividends as a preferred way to return cash to shareholders.

The Group’s board of directors has authorised the repurchase of 47 949 688 of its ordinary shares from ShoreCap II Limited, now held under the FBCH Share Buyback Scheme for subsequent resale to potential strategic investors.

This represents 7.14% of the issued share capital of FBC Holdings Limited and brings the total treasury shares acquired through the FBC Share Buyback Scheme to 7.52% of the issued share capital of the Group.

“With due notification and approvals having been granted by respective regulators, the book-over was undertaken on the Zimbabwe Stock Exchange on the 10th of June 2021,” Company Secretary Tichaona Mabeza said in a notice to shareholders signed by the Board.

It was back in July 2013 when FBCH issued a notice to shareholders, notifying them of the Group’s disposal of treasury shares to ShoreCap II Limited. According to the Group, the investment was part of its strategic and technical support relationship with the ShoreCap II fund managed by Equator Capital Partners, an investment management firm headquartered in the USA.

Proceeds from the investment were invested into the operations of FBCH, notably the greenfield establishment of the Group’s microfinance unit, and the Microplan Financial Services (Pvt) Limited.

“FBCH has over the years also benefitted from ShoreCap II Limited through skills transfer opportunities, peer-to-peer exchange programs, assistance with the establishment of FBC Bank’s SME Banking and Women’s Desk and international capital market referrals to strategic decision makers of leading international debt financers,” said Mabeza.

The Group, therefore, triggered the share repurchase option as the ShoreCap II fund was due to wind up on 26 June 2021.

The Group expressed gratitude to ShoreCap II for fulfilling its investment mandate of supporting emerging markets like FBCH, and to Equator Capital Partners, CapitalPlus Exchange as well as ShoreCap II affiliated investee companies.

“Their invaluable support over the years advanced our efforts towards nurturing sustainable solutions that enable the financial well-being of the communities we serve.

“We will continue to share the common desire to deliver a unique customer experience through value adding relationships, simplified processes and relevant technologies.”

In 2020, FBCH reported net cash flow from financing activities of ZWL671.5 million, from a negative position of ZWL420.7 million a year earlier.

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