MTN Shareholders Can Now Choose to Convert Dividends or Take Cash
MTN which is the biggest telecommunication giant in Ghana has managed to secure approval to give its shareholders the opportunity to be able to receive their final dividend payment of GHS0.124 per share for the entire 12 months period as of 31 December 2022, in cash or shares.
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The new procedure was adopted and approved at the company’s fifth annual general meeting (AGM) on Tuesday, 30th May 2023. through the ‘script’ dividend, MTN shareholders are allowed or given the opportunity to increase their stake in the company without incurring any form of capital market-related cost including fees to brokers.
According to a newly released note from the Ghana stock exchange, it noted that “per the minimum requirement for one to qualify for a scrip dividend or a new ordinary share which is an entitlement to one’s gross final dividend equivalent to one hundred new ordinary shares (GHS 129.35) and subsequently an equivalent in blocks of 10 shares which is an incremental of GHS 12.93 per block. Also emphasizing that no fractional new ordinary shares will be issued,” clarifying further.
MTN telecommunication by making this change the scrip dividend gives investors the option to either receive additional shares instated of a cash dividend.
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The release from the Ghana stocks exchanges also further clarified by explaining that in line with any computation mechanism of the scrip dividend guideline, qualifying shareholders may opt-in for either a new share for every cash they trade. If the shareholder does not prefer additional shares, then the person may receive the dividend in cash.
In the case which the shareholder is unable to select between the two options then by default, the payment will be made by cash. It is therefore important for shareholders to specify which form they want the dividend.
This decision taken by MTN will offer their shareholders the choice between converting dividends or taking cash which will be both great for shareholders and the company. This move demonstrates MTN’s commitment to providing flexibility and value to its shareholders whiles granting shareholders the option to increase their stake in the company without incurring additional costs,
The Ghana Stock Exchange’s guidelines for the scrip dividend further emphasize the transparent and fair nature of this offering giving the shareholders the power to decide how they receive their dividends; shareholders can align their investment strategies with their individual financial goals.