Letshego employees to get free company shares

Letshego Holdings Namibia (LHN) will be giving company shares to its employees for free through its employee share ownership plan.

This is pending approval from shareholders after the company issued a statement on 31 July.

“Beneficiaries will not have to pay anything for the shares distributed to them,” reads the statement.

According to the statement, the share ownership plan was introduced to comply with the Banking Institutions Act of 2023.

The act mandates that Letshego must increase its local Namibian equity ownership to 25%.

According to the statement, the ownership plan has already received approval from the Namibian Stock Exchange, but it still requires approval from Letshego’s shareholders.

“The trust deed establishing the trust (through which the ownership plan will be implemented) has been approved by the Namibian Stock Exchange and is subject to approval by the shareholders of the company in terms of the stock exchange listings requirements. The transaction contemplated in the share transfer agreement is also subject to approval by shareholders of the company,” says the statement.

The ownership plan will see the transfer of 25 million shares in LHN from Letshego Africa Holdings Limited to the ownership plan trust.

According to the statement, the trust will acquire these shares through a combination of a nominal cash payment of N$0,01 per share, totalling N$250 000, and a method known as notional funding.

Notional funding is designed to replicate the economic outcomes of a traditional preference share-funded scheme but without the need for additional entities, thereby simplifying the process and reducing costs.

“This simplifies the administration of the plan and reduces the implementation and ongoing administration costs. The notional funding method has become the most common and best practice method of funding ownership plans in the region,” reads the statement.

Under this arrangement, the trust will initially pay 80% to Letshego Holdings of any distributions received from the shares until the notional funding balance reaches zero.

After that, all distributions will go to the beneficiaries.

The final decision now rests with the shareholders, who will vote on the plan in the coming weeks, says the statement.