Padenga shareholders approve share option schemes for management and employees

Padenga Holdings shareholders on Thursday approved a plan to set up a share option scheme for its employees and grant options to its management, which will give the two groups an equivalent of 15 percent of the company’s issued share capital.

The plan would also allow the company to meet Zimbabwe’s empowerment law requirements.

Speaking to shareholders at the company’s extraordinary general meeting (EGM), chief executive, Gary Sharp said the options will be awarded to selected employees based on their performance.

“Awarding of options shall be based on the performance of an employee and contribution to the success of the company,” said Sharp.

The company said the share option scheme will enable it to comply with the requirements of the approved indigenisation implementation plan, while enhancing the capital base of the business.

Zimbabwe’s Indigenisation and Empowerment Act of 2008 requires foreign owned companies valued at over $500,000 to cede 51 percent to black locals. However, President Robert Mugabe last year indicated that compliance to the policy could take several forms with emphasis being placed on local procurement and retaining earnings in Zimbabwe.

According to the agreements, Padenga Management Share Ownership Trust will be granted 54,159,344 ordinary shares which represents 10 percent of the company’s current issued share capital while Padenga Employee Share Ownership Trust will be granted 27,079,672 ordinary shares, representing 5 percent of the company’s current issued share capital.

Padenga has 541,59 million shares in issue and is currently trading at 21,1 cents on the local bourse.

The company amended the share option price to the volume weighted average price (VWAP) of Padenga shares over the previous 60 trading days.

In a trading update after the company’s annual general meeting, Sharp said that total expenses for the four months to April 2017, are in line with budget and the company is confident that it will achieve its operational and financial targets for the year and returning another positive set of financial results.

Sharp said a total of 4,502 crocodiles have been culled as of May 17, 2017, adding that the size and quality of the cull crop in the pens gives the company confidence that it will attain its target cull of 46,000 crocodiles.

The company said 2,471 skins have been graded and achieved 97 percent first grade ratio from the first sales grading conducted early this month.

Sharp said the company’s United States operation, Lone Star Alligator Farms in Texas, currently has 22,830 alligators on the ground and about 16,182 of these is expected to be harvested between July and December.

He also told shareholders that an EU audit of export approved crocodile facilities occurred this week with Padenga being one of only two abattoirs that holds this status.

Demand for crocodiles meat in Europe remains steady and prices have firmed over last year . However, Sharp said there is no current interest from the Asian market for crocodile meat, compelling the company to increase local sales.

“We will maintain sales promotions of low value cuts into the local market to preserve our market share as an alternative to sales into Asia,” Sharp said.

Currently, the company has 46,235 B15 and 51,460 B16 crocodiles on the ground in Zimbabwe and this is in line with its objective of maintaining annual production at the same volumes in 2018.

Sharp said capital expenditure in FY 2017 will focus on additional infrastructure that will improve skin quality, increase growth rates and improve production efficiencies.

“To this end, new 80 pens are under construction. Also at the beginning of the year a solar power plant was commissioned at UME that is providing the bulk of the farms energy needs during daylight hours,” Sharp added.

Top shareholders of Padenga include ZMD Investments (Pvt) Ltd, HM Barbour (Pvt) Ltd and Stanbic nominees with 20 percent, 19,5 percent and 12,13 percent respectively.–source