Williamson Tea Plc is at a standstill targeting approval from the Capital Markets Authority (CMA) to offer 17.51 million new shares to its current shareholders at a price of Sh5 per share. The tea processor and exporter will offer 17,512,640 bonus shares valued at KES 87,563,200 from its capital reserves.
Bonus shares are free additional shares given to existing shareholders by a company equal to the numbers of shares they already own. They are non-cash and are issued from the company’s capital reserves.
The agricultural firm plans to distribute the shares in a bonus ratio of 1:1 – one fully paid share for one ordinary share. Only shareholders on the company’s register at the day of book closure will be eligible to receive the bonus shares.
Bonus shares do not increase market capitalization but reduce the share price proportionally. If approved, the move will increase liquidity, boost shareholder confidence and create affordability of the share especially to low income investors.
Williamson Tea Background
Founded in 1869, the agricultural firm listed at the Nairobi Securities Exchange (NSE) owns and manages many highland tea estates. It is well known for its Duchess grey, Traditional Afternoon, Kenya Earth, Lifeboat Tea, and Green Earl brands.
Also Read: Williamson Tea Issues Profit Warning
