Telkom share issuance proposal refused

[Jamie McKane]

Telkom share issuance proposal refused

The Telkom board's proposal to provide directors with general authority to issue shares for cash has been refused by investors who voted on the resolution at the company's annual general meeting on 10 September 2020.

"All resolutions, except for Special Resolution No. 1, were passed by the requisite majority of Telkom shareholders present in person or represented by proxy at the AGM," Telkom said in a statement to investors published directly after the meeting.

 

[deweyzeph]

I'm not surprised, if I'm reading this right then issuing more shares would dilute the shareholding of the existing shareholders.

 

[Tun@]

I think its pay walled

Telkom rubbishes talk of rights issue to fund spectrum bid

In the unlikely event where the board takes a decision to issue shares, an official announcement through Sens will be issued to inform all shareholders,” it said.

www.moneyweb.co.za

My bolding


Telkom on Thursday rubbished market talk that it plans to do a right issue to fund its participation in the upcoming spectrum auction to be led by communications regulator Icasa.

The operator issued a statement on the JSE’s stock exchange news service (Sens) on Thursday afternoon after TechCentral e-mailed questions to the company asking about rumours of an impending rights issue.

“Shareholders are advised that Telkom has no intention to do a rights issue. In the unlikely event where the board takes a decision to issue shares, an official announcement through Sens will be issued to inform all shareholders,” it said.

The company added that it “remains comfortable with its balance sheet with a net debt to Ebitda (earnings before interest, tax, depreciation and amortisation) of 0.7x as reported for the period 31 March 2020. There has been no increase in debt since our annual results for the period 31 March 2020.”

The market speculation may have started when Telkom, on 7 August, issued its annual report and notice of AGM, which is taking place on 10 September. The board is requesting general authority for directors to issue shares for cash, which Telkom described as a “standard resolution passed annually”.

Increased threshold
“In the upcoming AGM, the board is requesting to increase the threshold from 5% to 10%. Although the board does not expect to issue shares, it has taken a view to increase the threshold to provide the board agility and flexibility to enable an effective post-Covid-19 response, should this be necessary.

“The board would like to reiterate that the amendment of the resolutions is not an expression of Telkom’s intention to issue shares to the market.”

Telkom rubbishes talk of rights issue to fund spectrum bid

In the unlikely event where the board takes a decision to issue shares, an official announcement through Sens will be issued to inform all shareholders,” it said.

www.moneyweb.co.za

 

[system32]

I'm not surprised, if I'm reading this right then issuing more shares would dilute the shareholding of the existing shareholders.

Difficult to get approval when your share price is on a downward trajectory:
3year graph:


As a comparison, Tesla had no problems selling $5b in new shares... whilst their share was on the rise.

 

[Tun@]

Difficult to get approval when your share price is on a downward trajectory:

That chart was giving me Sasol flashbacks a week or 2 ago. Yet to see but hopefully no new low.