Total owners firm grip on company with Sh5bn buy-in
Posted Tuesday, February 19 2013 at 19:39
- Total Outre-Mer now controls a 93.96 per cent stake in the company, up from 87.27 per cent in May last year.
- Total’s parent firm raised its stake after injecting Sh5.2 billion capital into the company in June last year.
- Total Outre-Mer will now be taking the bulk of the oil marketer’s dividends.
Total Kenya’s French parent company has firmed its grip on the oil marketer where it has significantly diluted minority shareholders’ stake.
Regulatory filings show that Total Outre-Mer now controls a 93.96 per cent stake in the company, up from 87.27 per cent in May last year.
This came as the combined ownership of Total’s smaller investors dropped to 6.04 per cent from 12.73 per cent in the period.
Total’s parent firm raised its stake after injecting Sh5.2 billion capital into the company in June last year. The oil marketer is using the money to retire its short-term borrowings whose interest charges have eaten into earnings over the past few years.
Total Outre-Mer will now be taking the bulk of the oil marketer’s dividends after further diminishing shareholding by smaller investors like Jubilee Insurance and Phoenix of East Africa Assurance Company.
“The balance sheet was strengthened with the increase of the company’s paid up capital by Sh5.2 billion, resulting from the issuance of additional preference shares,” Total said in a statement.
The French multinational paid Sh15.71 for each of the 330.9 million preference shares it was allotted in the company whose stock currently trades at a low of Sh13.8.
The firm already owned 126.3 million ordinary shares and 123.4 million preference shares in the oil marketer before the latest stock deal.
The new preference shares, which have pushed Total’s shareholder equity to Sh14.1 billion from Sh9.1 billion, will be redeemable.
This means that they will earn dividend at the same rate as ordinary shares but the company has a right to buy them back at a future date.
Voting rights at Total remain unchanged as the French multinational will only rely on its ordinary shares equivalent to a 42.3 per cent stake to appoint directors, among other strategic decisions.
The French firm, however, remains the single largest investor in the oil marketer, with each of the remaining shareholders owning less than one per cent stake.
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The company opted to issue the additional preference shares to Total Outre-Mer to raise cash for retiring its loans that have partly contributed to its loss-making.