ADVOKS GLOBAL · KENYA
The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023
57. Shareholders’ circular
Edition: 2023-12-15 · In force
57. Shareholders’ circular
(1)The shareholders’ circular on a share buy-back proposal shall disclose all material information that the shareholders of the listed company and the shareholders’ professional advisers would reasonably require or expect to be informed about in order to make an informed decision on the proposed share buy-back transaction.(2)Despite the generality of subparagraph (1), the shareholders’ circular shall contain the following information—(a)a heading drawing attention to the importance of the circular and advising holders of shares to consult appropriate independent advisers regarding the proposal;(b)a statement that the Authority or securities exchange, as the case may be, is not responsible for the contents of the circular, makes no representation as to the accuracy or completeness of the circular, and is not liable for any loss howsoever arising from or in reliance on the whole or any Part of the contents of the circular;(c)the reasons for the share buyback;(d)the class and number of shares that are intended to be bought back;(e)the method of undertaking the share buy-back including whether or not the buy-back shall be undertaken—(i)through open market repurchase programmes executed through tender offers or over a period of time; or(ii)through on-market (exchange) or off-market purchases;(f)the treatment by the listed company of the shares to be bought back including—(i)whether or not the shares bought back shall be held in treasury or shall be cancelled; and(ii)where the shares that have been bought back are intended to be held in treasury, the listed company shall disclose the current and future treatment of those treasury shares;(g)the price-per-share intended to be paid by the listed company, specifying the maximum and minimum prices of the shares, and a detailed explanation supporting the prescribed price including valuation reports;(h)the mode of financing the share buyback either being the proceeds from a fresh issue of shares or out of distributable profits of the listed company;(i)whether or not consent for the share buyback has been obtained from other relevant parties including bondholders, regulators and creditors;(j)a declaration by the directors regarding the company’s solvency or liquidity, based on the company’s latest audited financial statements, that is sufficient to undertake the share buy-back including a statement that on the date of the shareholder circular—(i)the assets of the listed company are fairly valued;(ii)the assets of the listed company are equal to or exceed the liabilities of the listed company; and(iii)the listed company shall be able to pay its debts as they come due in the ordinary course of business for a period of twelve months following the share buyback;(k)the potential impact of the proposed share buyback on the shareholding structure of the listed company;(l)the risk factors and assumptions of the share buyback transaction;(m)any related party transaction or director’s interest in the share buyback transaction;(n)the impact of the share buyback on the listed company’s financial position;(o)the number of shares held directly and indirectly by the directors and substantial shareholders;(p)the direct and indirect interests of the directors and major shareholders and any person connected with the directors or major shareholders in the proposed purchase of shares or resale of treasury shares;(q)the potential advantages and disadvantages of the proposed share buyback to the listed company and its shareholders;(r)a statement by the board of directors that the proposal is in the best interest of the listed company and reasons thereof;(s)the period during which the shareholders’ approval for the share buyback shall be valid; and(t)any other relevant information regarding the proposed share buyback transaction.