One of Zimbabwe’s leading agricultural concerns, Ariston, says it is planning to give its employees a 20 percent ownership stake in the company.
Ariston’s company secretary Rufaro Chinamo yesterday said the agriculture-focused firm is currently seeking shareholder approval to establish an employee share ownership trust (Esot) to benefit its workers.
If approved, Ariston workers will hold 320 159 119 shares out of 1 600 795 595 ordinary shares in the company, translating to about 20 percent.
“The Esot will be established to make provision for the welfare, advancement, general improvement and empowerment of the employees of the company, and shall be registered for such purpose in accordance with the laws of Zimbabwe,” Chinamo added.
Employee share ownership schemes are envisioned in the Indigenisation and Economic Empowerment (General) Regulations of 2010. Market analysts say the model of Zimbabwe’s indigenisation law — on paper — places prominence on wealth creation through broad-based participation of previously marginalised people in economic activities.
If properly implemented, the schemes will increase production and profitability, and improving employees’ dedication and sense of ownership insofar as it increases the financial risk if the company does not perform well.
Under Esot, employees get shares which are then held in the scheme’s trust until the employee retires or leaves the company, or earlier diversification opportunities, creating an opportunity for workers to amass long-term savings and benefits from their work.
Some companies that have embarked on employee share ownership schemes in Zimbabwe include Zimplats, MBCA, Meikles, British American Tobacco Zimbabwe and Schweppes among others.
Chinamo said in addition, employees will also get 30 million shares at a price of no less than $0,005 in settlement of salary arrears.
“The proposed issue of a maximum of 30 million ordinary shares to a two percent dilution of existing shareholding,” she said.
To date, only the company’s chief executive has agreed to the conversion of his salary arrears into shares.
Ariston is engaged in horticulture, tea, macadamia nut production, fishery, poultry production and supply of fresh farm produce. The company is organised into three divisions, which include Southdown, Claremont and Kent Estates.
Southdown Estates is involved in growing and manufacturing of tea, macadamia nuts, avocados and bananas, while Claremont Estate produces pome and stone fruit, passion fruit, potatoes and trout fish.
The Zimbabwe Stock Exchange-listed firm posted a profit of $125 000 for the year-ended September 30, 2016 compared to a $5,1 million loss recorded during the same period in 2015 on the back of an increase in fair value adjustments and a reversal in finance costs. Daily News
