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BY AUBREY LUTE
MedRescue International Botswana (MRIB) has delisted from the Botswana Stock Exchange (BSE) with effect from last week Friday.
A resolution to delist from the Stock Exchange was reached at an Extra Ordinary General Meeting held on 29 August 2008.
Addressing a press conference last week, the Chairman of the MRIB Board, Mr Dennis Alexander said MRIB did not comply with a number of BSE rules, hence the decision to delist. He gave the example that 20% of the equity shares are no longer held by the public and therefore the MRIB counter does not comply with the minimum spread requirements.
He added that the company has seen limited trading volumes in its shares since listing. “The costs and the regulatory requirements associated with maintaining admission to BSE are a significant burden on the Company’s existing financial resources. We believe that the ongoing cost and administrative burden of maintaining BSE quotation outweighs the benefit gained from it,” observed Alexander.
In the past five years the company has declined both in revenue and profitability, with significant rise in costs. He said this will provide an opportunity to rebuild MRIB.
“The Board has therefore come to the conclusion that it is in the best interest of the Company and its Shareholders for the MRIB to terminate its listing from the BSE,” he said.
Alexander said they sought approval from the shareholders to delist towards the end of August and it was granted. “Following the delisting, it is likely to be difficult for shareholders who did not accept the offer to sell their shares in the absence of a public market for the shares as there will be no arrangement for shareholders’ exit. Furthermore even if such shareholders are able to sell their shares, they may receive a lower price compared with the offer price,” he explained.
Alexander said MRIB as an unquoted company will no longer be obliged to comply with the requirements of the BSE. However he said the company will continue to comply with the Companies Act of 2006, “and the interests of the shareholders who did not accept the offer will be protected to the extent provide by this legal framework,” he said.
He advised shareholders who are in doubt of their position to seek independent professional advice.
According to the Board Chairman, the company’s delisting from the BSE will not in any way affect the operations of the MRIB negatively. “This is in effect a positive move in strengthening and expanding the company's operations and the product lines of the organization.”
He said MRIB previously operated within the Botswana market only to avoid competing with its holding company, “with the new shareholding structure MRIB can look beyond the borders without any restrictions,” he added. Alexander said the aim of the company is to expand its network in the country, consolidate its current market position and introduce new products to its existing lines.
Southview and Bomaid now hold 90.262% of the ordinary shares at MRIB.
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