'No more preference shares'

2003-10-07 08:49

Johannesburg - Tiger Brands plans to do away with its preference shares.

It plans to convert and redeem its 5.5% cumulative preference shares at par - 200c per preference share.

The company said on Tuesday that the directors are of the view that the portion of the capital represented by the preference shares - 0.04% - is not meaningful as a proportion of shareholders' interests in the company.

Moreover, the costs and administration required to service the preference shares do not justify their continued existence.

In addition, the illiquidity of these shares on the JSE puts into question the rationale of their listing.

Consequently, the board believes that it is in the interests of both the company and shareholders to do away with the preference shares.

The company said although the redemption of the redeemable preference shares will result in the termination of an income stream for preference shareholders, the premium (which the redemption payment represents to the price at which the preference shares last traded), of 85% should more than compensate for the loss of this income stream.

The directors who hold ordinary shares have indicated their intention to vote in favour of the proposal at a combined general meeting of ordinary and preference shareholders to be held on October 30.

The implementation of the proposal is contingent upon JSE approval and the approval at the general meeting.

The financial effects on Tiger Brands are immaterial, the company said.