Category Archives: AGM

Olympia Turnaround? Part III

The Olympia Capital Holdings 2022 shareholders AGM at Nairobi club on Friday, August 26 started with a bit of confusion as the Chairman, Dr. Chris Obura, insisted that shareholders needed to wear masks unless they were speaking. It was attended by about 100 shareholders and was the first physical meeting in three years as the last two had been held virtually. The Chairman said the company had found that hosting virtual AGMs was more costly than physical ones and so the company had decided to try one, even as Covid-19 protocols remain.

The meeting took about an hour with lots of Q&A with shareholders about not having seen the documents they were being asked to approve, such as the annual report and minutes of last year’s online AGM (posted online and which the registrars had emailed) and the lack of a dividend.

Governance: The company has a unique structure with a holding company and subsidiaries and has primarily relocated its business to Botswana. The Managing Director was not at the AGM as the Chairman said that he works full-time in Botswana. This has been the case since the passing of their previous Managing Director Michael Matu in 2020.

Manufacturing Cost: During the Q&A, the Chairman mentioned that, of their Kshs 500 million in sales, 400 million is from Botswana where Olympia now does its floor tiles manufacturing, after halting that in Kenya. He said that the cost of manufacturing was one-third cheaper in Botswana than in Kenya.

Dividend when? Olympia can only pay dividends when its various subsidiaries pay dividends to the parent company – and the one in Botswana was not allowed by law to pay until it had settled a bank debt. But now that the loan was capitalized, a dividend may come to Olympia’s shareholders from profits next year.

Goodies: The Chairman said they had not expected many shareholders to show up and that the venue had only set out a small amount of tea and snacks. Nevertheless, the board agreed on Kshs 500 cash as lunch allowance and each shareholder was paid on the way out of the meeting.

Verdict: Looks like shareholders have a pent-up demand to attend physical AGMs after two years of virtual ones, that were occasioned by Covid-19.

AA of Kenya restructures for the future

The Automobile Association of Kenya (AAK) is over a century old and a member of the  International Automobile Federation (FIA). It is known for roadside assistance, its driving schools, setting mileage rates, Autonews magazine, car valuations for banks and vehicle inspections. It is also the go-to place for the issuance of international driving licenses, and carnets which are passports for cars to travel across borders e.g to Tanzania, Uganda or for other trips like this bike ride to South Africa.

Before you go on one of these trips, make it easy for yourself and get the following:
Carnet de Passage for each vehicle (get this via AA)
COMESA insurance (get via your insurance company, or buy at the border)
International driver’s license (get via AA)

The AAK had 2019 revenue of Kshs 722 million, expenses of Kshs 643 million and profit of Kshs 79 million. In Covid-affected 2020, revenue dipped to Kshs 472 million, and its net profit was 11 million. It had 100,000 members and net assets of Kshs 252 million.

While other automobile associations around the world do things like operate hotels & petrol stations and do helicopter rescues, the AAK plans its future revenue diversification ventures to include:

  • Establishing service centres in Nairobi, Mombasa, Kisumu, Eldoret and Nakuru.
  • Establish a learning centre called the Africa School of Mobility.
  • Be a leader in innovating mobility products and lead in green technology research.
  • Expand to all 47 counties and later to Rwanda and Ethiopia.

The envisioned projects all take capital so, at a special meeting in October 2021, AAK members voted to demutualise from being an association under the Societies Act and convert to a public limited company (PLC). They overwhelmingly passed proposals, with support ranging from 88% to 99%, including 93% for the AAK to do the demutualization and capital raising project.

The process will see the transfer of assets and investments to Automobile Association PLC, a holding company which will raise capital through a restricted public offer that is open to a new class of “full members.” The company will have an insurance brokerage as a subsidiary and an AA institute as an affiliate.

Currently, AAK members enjoy discounts on petrol (at Total stations), batteries, tyres, shock absorbers, and other services from partner organizations. But in future, “full members” will get shares, voting rights, more discounts on products and services that the AAK will continue to offer, in addition to dividends in future as shareholders. The AAK has also joined the Nairobi Securities Exchange (NSE) Ibuka accelerator program.

One can now enroll for full membership by paying a one-off fee of Kshs. 50,000 through card, M-pesa or deposit at the Cooperative Bank before December 31, 2021. This has been discounted to Kshs 40,000 for anyone who was an ordinary member of the AAK before the meeting date of 19 October. AAK transaction advisors are Standard Investment Bank, MMC Asafo and Tim Sky Media.

Stanbic Uganda 2021 AGM

Stanbic, the largest bank in Uganda held its shareholders’ annual general meeting this morning. Beamed online, the 15th AGM of the bank was held virtually and shareholders were invited to register, watch the stream online and vote on the resolutions.

Excerpts

  • The bank is listed on the Uganda securities exchange and has 22, 000 shareholders
  • Much was made about Flyhub, their new financial services and innovation subsidiary created to compete with fintechs.
  • Shareholders could get their meeting packs on their phones, with the notice and annual report. Also, they could ask questions, and over 90 were received ahead of or during the AGM.
  • There is some board restructuring in Uganda as they separate banks from holding companies. As such, no directors retired at the AGM this year
  • Shareholders voted to adopt the meeting notice, new directors, audited report, and non-executive director fees
  • They voted to approve a dividend (Ushs 2.15 per share) for 2019 that was paid in April 2021. They also voted on a dividend for 2020 (Ushs 1.86 per share) that is in abeyance. The board has applied to the Bank of Uganda to pay the 2020 dividend but that has been refused as the regulator wants banks to withhold discretionary payouts and preserve capital during Covid-19. As such the board did not recommend this item.
  • Shareholders could vote the whole morning, and, just before the end of the meeting, the results were displayed instantly.

Another good thing is Stanbic recently solved a pain point for cross border investors, and allowed them to register and receive dividends by mobile money – such as Safaricom M-Pesa, instead of cheques.

It was the closest thing to attending the AGM of a foreign bank held in Nairobi.

KCB 1923 AGM: Optimism amid political disturbances

In May 1923, the East African Standard published a report from a bank AGM.

Mr. Robert Williamson, the deputy chairman of the National Bank of India addressing shareholders at the annual meeting yesterday, made a brief reference to the position in East Africa today and in the course of his remarks, suggested considerable improvement in the prospects for both trade and agriculture.

Mr. Williamson said the export trade of the country was more active and its products such as maize, coffee, and hides had found a ready market. The Uganda cotton crop, although it would not realize the original estimate of about 100,000 bales, would be fairly large and should assist in the off-take of imported goods through the buying power produced from its sale.

“The repeal of the Kenya income tax and revision of customs duty should also improve matters. There are,” he added, “certain political disturbances locally almost inseparable from the growth of a young country with a mixed population such as Kenya has, which we all trust are capable of adjustment. The outlook in this direction is promising as deputations from the districts are coming to London to interview the Secretary of State for the Colonies.”

A dividend for the six months ended December 31st, last at the rate of 20% per annum was agreed to.

More:

The National Bank of India was the top bank in colonial Kenya. It is the oldest bank in the country and is today known as KCB

AfDB 2020 annual meetings

The abbreviated annual meetings of the African Development Bank (AfDB) Group ended this week after just three days, a slimmed-down virtual event, compared to the meetings last year in Malabo.

The Governors of the bank, representing 54 African and 27 non-regional member countries, dealt with statutory matters and approved the accounts of the bank for 2019, and reviewed its performance and the auditor reports. The Governors also commended the bank for its measures to work through COVID and while also providing flexible support to countries through the COVID-19 Rapid Response Facility of up to $10 billion.

During the year there will be a focus on infrastructure finance and quality health care and collaboration with the African Union and regional economic blocs to fast-track the African Continental Free Trade Area which was postponed from July this year, and will now kick off on January 1, 2021. Another initiative that will be supported will be the G-20 debt relief effort, recognizing that many African countries will go in to recession for the first time in twenty-five years as they tackle lockdowns, weaker tax revenue, and increased emergency health expenses.

2020 Annual Meetings Day 2 – Best of

The main highlight of the AfDB meetings was the election of the President, which saw Dr. Akinwumi Adesina re-elected for a second term with 100% of the delegate votes. The USA appears to have been the main opponent of his re-election, and their comments calling for the bank to ensure cost-effective management, review its use of resources and strengthen oversight & governance were contained in the final communiqué released by the Bank at the end of the meetings.

The next AfDB Annual Meetings are planned to take place in May 2021 in Accra Ghana. They will be hosted by the new Chairperson of the Bank, Mr Ken Ofori-Atta, Ghana’s Minister for Finance who took over from Ms Niale Kaba, the Côte d’Ivoire Minister of Planning & Development after she stepped down at the end of her term this week.

https://www.flickr.com/photos/afdbgroup/50294214242/

EDIT September 1: Dr. Akinwumi Adesina was sworn in to start his second term as President of the African Development Bank Group.