Trustco announces share consolidation exercise
Trustco Group Holdings Limited last week announced the decision to implement a share consolidation, also known as a reverse stock split to international investors, following its recent announcement regarding the upgrade of its American Depositary Receipts (ADR) programme.The board of Trustco has approved and recommended to shareholders for approval, the consolidation of shares at a ratio of 20:1. The consolidation of shares coincides with the ADR ratio of 1:20 and ensures alignment between the ADR and the JSE trading platforms. The face value of the share will increase, but not the intrinsic value. Importantly, the consolidation will have no dilutionary effect on shareholders, as the proportional ownership of each shareholder remains unchanged, ensuring a streamlined and more efficient trading experience for both domestic and international investors.
Commenting on the consolidation, Trustco deputy CEO Quinton Z van Rooyen said the company was transitioning itself to meet the expectations of international investors.
"Trustco’s vision is global, and this share consolidation is another step in unlocking that potential. By taking these steps, we are positioning Trustco to not only meet the expectations of international markets but to thrive in them. We are confident that this alignment will strengthen our relationships with both new and existing investors, while allowing us to better compete on the world stage."
Shares
This share consolidation initiative comes on the heels of Trustco's recently announced plans to upgrade its ADR programme to Level 3, part of the company's strategy to expand its presence in the United States (US) capital markets. ADRs are US dollar-denominated negotiable certificates issued by a US depository bank, representing ownership of shares in a non-US company. They enable international investors to easily purchase and trade shares of foreign companies on US financial markets. Trustco's ADR program, which began in 2014, allows US investors to participate in the company's growth story without directly accessing foreign markets.
Shareholders will be asked to approve the share consolidation at an upcoming meeting. The company will provide further updates as the process progresses.