Telecoms giant MTN is proposing to offer new shares or cash as final dividend payment to shareholders on its 2022 Profit After Tax.
This will take place if MTN is able to get shareholders to approve a resolution that will be tabled at its Annual General Meeting on Tuesday May 30 2023, to receive their final dividend in cash or new ordinary shares.
MTN posted a Profit After Tax of ¢2.8 billion ending 2022. The Board Members of MTN at meeting on February 27, 2023 resolved and declared a final dividend of ¢1.5 billion for the financial year 2022.
However, this is subject to the approval of shareholders at its Annual General Meeting on May 30 2023.
Who qualifies for MTN Scrip Dividend?
MTN in a circular however said the minimum requirement to qualify for the Scrip Dividend or New Ordinary Shares are shareholders with a gross final dividend of 100 ordinary shares or cash equivalent of ¢129 and subsequently an equivalent in blocks of 10 shares (incremental of ¢12.93 per block).
No fractional new ordinary shares will be issued. The telco added that subsequently an equivalent in blocks of 10 shares (incremental of ¢12.93 per block). It also said fractional new ordinary shares will be issued.
The telco also disclosed that the Scrip Dividend guideline requires every qualifying shareholder to receive a new share for every cash dividend forgone, “If no selection is made, the default option will be payment in cash”.
Expected Benefits of Scrip Dividend Payment by MTN
According to MTN, the Scrip Dividend payment gives qualifying shareholders an opportunity to receive their dividend in the form of new ordinary shares in the company instead of cash. MTN announced that it will increase the number of shares of the company without incurring capital market related transaction cost.
The proposed Scrip Dividend will benefit the Company, as the cash, which would otherwise be paid out in dividends, will be retained for working capital and other general corporate purposes.
Special business to be considered at AGM
Shareholders of MTN will be expected to approve a special resolution to amend the Company’s Constitution to align with the Securities and Exchange Commission Corporate Governance Code, 2020, the Ghana Stock Exchange Listing Rules and any other applicable law. The will also be a special resolution for the amendment of the Constitution of the Company to include the appointment of a person by the Board of Directors, as a director either to fill a vacancy on the Board, or as an addition to the Board subject to SEC Code and rules of the Ghana Stock.