Letshego embarks on increased localisation drive
Employees to own more shares
The bank announced that the increased localisation drive would be facilitated through an Employee Share Ownership Plan (Esop) trust.
Letshego Holdings Namibia (LHN) will commence increasing the level of Namibian equity in the bank to 25% as part of its efforts to comply with the Banking Institutions Act, it said in a circular ahead of its annual general meeting (AGM).The bank announced that the increased localisation drive would be facilitated through an Employee Share Ownership Plan (Esop) Trust.
“In terms of the Banking Institutions Act 13 of 2023, LHN is required to increase its level of local Namibian equity ownership to 25%. Pursuant to this requirement, LHN wishes to implement the Esop, the aim of which is ultimately to transfer shares to beneficiaries on the end date or upon a change in control, whichever is earlier,” LHN said in the circular to shareholders.
The Namibia Stock Exchange (NSX), on which LHN is listed, has approved the implementation, it said.
“The trust deed establishing the trust, through which the Esop will be implemented, has been approved by the NSX and is subject to approval by the shareholders of the company in terms of the NSX listings requirements. The transaction contemplated in the share transfer agreement is also subject to approval by shareholders of the company,” LHN said.
Scheme identified
LHN explained that the funding of the Esop would be conducted by using a preference share-funded scheme.
A preference share-funded scheme involves a company raising capital by issuing preference shares, which are a type of equity security. These shares provide investors with preferential rights to dividends and assets compared to common shareholders.
“The notional funding method of funding the Esop has been implemented to provide the same economic outcome for the beneficiaries, Letshego Africa Holdings (LAHL) and LHN, of using a conventional preference share-funded scheme to acquire the shares, but without having to incorporate a further entity,” LHN said.
“This simplifies the administration of the Esop and reduces the implementation and ongoing administration costs. The notional funding method has become the most common and best practice method of funding Esop’s in the region,” it added.