TNM plc shareholders have given the company a go ahead to raise K30 billion through issuance of 1.5 billion new shares targeting its three main shareholders.
The decision follows a TNM plc extraordinary general meeting held on Friday in Blantyre where 99.6 percent of the shareholders voted in favour of the resolutions.
Consequently, Press Corporation plc, which has a 43.72 percent stake in TNM, will be allocated 794.7 million shares while Old Mutual Life Assurance Company Limited with a 23.57 percent stake will be allocated 483.2 million shares and Nico Life Insurance Company Limited, with a 8.16 percent shareholding, will be allocated 172.4 million shares.
Speaking in an interview on the sidelines of the meeting, TNM plc chairperson Ted Sauti-Phiri said the firm will be able to restructure its balance sheet and improve their profitability.
He said: “Our profitability was affected because of interest bearing loans. Now we will be able to easily raise more money and pay dividends to our shareholders in the near future.
“The motivation for any shareholder is for the share value to go up because that is how you determine retains; percentage wise, there will be dilution, but now there is a guarantee they will get more in terms of value.”
Moving forward, Sauti-Phiri said the company, having built a resilient business model, will be able to withstand some of the shocks in the market with aturn-around alreay earmarked for 2024.
On December 16 2024, TNM plc board of directors passed a resolution to undertake either a general or a specific issue or a combination of a general and specific issue of new ordinary shares up to a maximum of 15 percent of the issued ordinary shares of the company, for cash in terms of the listing requirements to a maximum sum of K30 billion for the purpose of liquidation of existing debt.
Further, it was resolved that the shares be issued at a discount not exceeding 10 percent of the weighted average ruling price over prior 30 days, in line with the Malawi Stock Exchange listings requirements.
The subscription price of K19.99 per share represented a discount of seven percent to the 30-day weighted average relative price as at February 6 2025 being the date the subscription agreement was concluded.
The decision drew mixed reactions from stakeholders with Minority Shareholders of Listed Company secretary general Frank Harawa observing that unlike raising funds through rights issue where everyone is eligible to participate, the approach meant dillution of their shareholding and it was difficult for them to stop the process.
However, on Friday, Harawa said minority shareholders are happy with the resolution as with free from loans, the company will be able to pay dividends and have its share price pick up.
“This was a quicker method and has helped us all. We had taught our people the dangers of this if it did not happen,” he said.
During the year ending December 31 2024, TNM plc posted of K10.06 billion profit from a net loss position of K4.93 billion in 2023.
However, despite the turnaround, the company directors declared a nil equivalent to zero tambala per share, just as was the case the previous year.
In TNM plc, Press Corporation plc holds 43.72 percent stake, Old Mutual Life Assurance Company has 23.57 percent, Nico Life Insurance Company Limited owns 8.16 percent while the public has 24.55 percent
