Mpico plc substantial shareholder is in negotiations to sell 20.56 percent stake in the Malawi Stock Exchange-listed property management firm, it has emerged.
In a cautionary statement signed by company secretary Chifundo Kalaile, Mpico plc has warned shareholders to treat the shares with caution.
The statement did not mention the negotiating parties, but apart from Old Mutual Malawi Limited, which owns 57 percent stake in Mpico, the other shareholders are Lincoln Investments with 10 percent shareholding while the public own 33 percent.
Reads the caution statement: “Mpico plc wishes to inform its shareholders, potential shareholders and investing public that there are ongoing negotiations for the potential sale of up to 20.56 percent shareholding interest in the company by a substantial shareholder.
“Shareholders and the general public are, therefore, advised to exercise additional caution and to consult their professional advisors before dealing in Mpico shares until a full announcement is made on the outcome of the negotiations.”
Kalaile declined to divulge more information on the negotiations, but stakeholders believe this would be an opportunity for the majority shareholder to have strong partners that could bring new ideas and help in managing the company’s property.
Property management expert Desmond Namangalesaid disposal of shares plays a crucial role in portfolio management.
“By disposing of shares, investors can reallocate their capital into more promising investments, reducing risk or taking advantage of emerging opportunities,” he said.
Namangale, who is Knight Frank managing director, said selling stake can provide businesses with the necessary funds to enhance expansion, finance research and development, pay off debts or undertake mergers and acquisitions.
“If a significant shareholder or a group of shareholders dispose of their shares, it can have a substantial impact on the decision-making power and control of the company,” he said.
Minority Shareholders Association of Listed Companies secretary general Frank Harawa described the move as positive given the likelihood of the potential investor’s capability to help in the running of the business.
“There was need for expertise to manage our company. The coming of this shareholder would be an interesting one because they could help in the management of the company and boost business.
“This is a substantial shareholder cashing out, so it will not benefit the company by injection of money, but the benefit will be if the one that is coming in will add value in the sense of management, expertise and knowledge.”
Mpico plc, which listed on MSE in November 2007, has been struggling since the Covid-19 pandemic affected the demand for office space in 2020 and its share price had since plummeted to K14.82 from K23.93 in 2020. Meanwhile, the firm is being owed billions of rental arrears from both public and private sectors with government alone owing it K3.5 billion as at December 31 2023 from K6 billion the same period in 2022.
