Bharti Airtel Ltd. is allowed to buy out the minority shareholders who refused to sell their stakes in its Zambian unit, said Michael Liwelela, director of the country’s Securities and Exchange Commission.
“They have the right to buy off the remaining three percent shares under the companies law,” Liwelela said by phone from Lusaka, the capital. “If the minority shareholders are not happy they can challenge the decision in court.”
Under Zambia’s capital market regulations, any company that has over 50 shareholders must be quoted on the local exchange . Celtel has some 2000 minority shareholders who own roughly 3%. Last December, this minority shareholder bloc rejected Bharti’s offer of 710 kwacha ($0.15) per share.
According to reports, companies in Zambia are usually delisted if a single shareholder controls more than 95% stake. Bharti Airtel holds 96.36% in the Celtel Zambia.
Bharti announced on Dec. 24 it planned to delist from the exchange after increasing its stake to 97 percent from 78.9 percent. Trading in the shares was suspended on Aug. 18 after Bharti bought Zain’s African assets.
Accordingly, it remains to be seen whether Bharti will make a fresh offer to buy out the minority shareholders in Celtel having hit a roadblock with the Lusaka Stock Exchange rejecting its application to delist reportedly for procedural flaws.
Chief Executive officer of the exchange,Mrs.Beatrice Nkanza declined to comment on the commission’s decision when contacted by Bloomberg News by phone today.
[Bloomberg/Indiainfoline]
Our undergraduate students have revealed in their research that the minority share holders do not want to lose their shares. No company that comes to buy an existing company should not be allowed to own 100% shares. Even the 96.36% that Bharti Airtel holds should have not been allowed. In the next few years Bharti will also be selling their shares at a much higher rate tag & Zambia will be at a loss again.
What is the comment from Dora siliya and Mulongoti the archetechs of the sale of these companies
Even me I cant accept to be bought off so cheaply. This is day light robbery.
of what advantage is it to zambia that Bharti was allowed to take over Zain.It seems to be we always short change ourselves.
ps Where are all the loud mouth bloggers,these are the issues they should be debating not whether Fr Bwalya has a child or not.It just shows ….doesn’t it.
come on chaps these are the rule. even before you buy you first sale you are aware of this rule. it not unique to zambia. remember the owners of Man U and what followed the acquistion of Man U. whether is is fair or not is another matter
WHAT GARBAGE
ZAMBIANS HAVE A RIGHT TO PARTICIPATE IN NATIONAL DEVELOPMENT THROUGH THE STOCK EXCHANGE AND GROW WITH MULTI NATIONAL COMPANIES.WHAT RULES ARE THESE THAT BLATENTLY SHORT CHANGE US
@ global citizen above me, there was once a company in America called ENRON. Laws can be penned in the nation to protect the citizenry.
Investment in Zambia, mwenye aisa twikala pansansa ba #5 bena balasapota?
# 6 Mwanawakwitu yes laws can changed so that it is fair to all.@ #5 i was just disputing the picture some peopleare painting of zambia that the particular law in question is unique to zambia when in fact it not. this law is more like a copy of the british law.
ZAIN never paid any dividends to its shareholders. This meant that their shares were not attractive and hence a fall in price. In short if one wanted to sell one would make a capital loss. Down the line Bharti is vying to push out the minority at a song of $0.15. These are the shareholders who have never seen any growth and returns in their investment. I think laws should be revisited to include that if the company does not declare dividends ever, they should not force a 100% sweep at a song price. Instead they should buy at a price prevailing in other similar companies overseas or local.