Cresta Marakanelo has announced its intention to dissolve the Cresta Marakanelo Limited Employee Share Trust to replace it with the new Phantom Share Scheme. In a statement last week, the directors said they are seeking approval from shareholders to dissolve the Trust, buy back two percent shares owned by the Trust and adopt the new Cresta Marakanelo Limited Phantom Share Scheme.
Cresta’s Employee Share Trust was formed in 2010 for the purpose of incentivising and encouraging employees of Cresta to contribute to and share in the growth and profitability of the company. “This initiative was taken by the company, as the founder to the Cresta Employee Share Trust. A total of two percent (3 700 000) of the shares were granted to the Trust for that purpose. The acquisition was facilitated through a loan advanced by Cresta in the sum of P5, 4million to the Trust. The purchase price by the Trust was P1, 45 per share,” reads the statement.
As at June 2015, the Trust owes Cresta P7, 39million inclusive of interest regarding the initial capital of P5, 34million loan granted to acquire the two percent shares. The new Phantom scheme according to the document provided and authorised by the group’s chairman, Maria Nthebolan, is intended to promote the retention of ability and expertise of qualifying employees primarily responsible for the profitability and continued growth of the company. It is also to incentivise such qualifying employees to act in the best interests of the company by giving such qualifying employees an opportunity to acquire the notional shares in the company. “It is the intention that in total, two percent, that is 3 700 000 shares of the stated share capital of Cresta shall be enjoyed by the qualifying employees through the scheme.
The persons who may participate in the scheme shall be those employees that the board from time to time in its absolute discretion considers to be contributing in the growth and profitability of the company, who have been employed by the company for at least two years,” reads part of the document. The scheme is a cash bonus payment which is determined on the dividends payable based on the scheme shares. The maximum number of scheme shares shall not exceed 3 700 000 shares. At any time the company pays a dividend to its shareholders, qualifying employees shall be entitled to receive an amount equivalent to the amount received as dividends by shareholders holding an equivalent number of shares in Cresta. As for the duration of the scheme, the board may at any time by resolution suspend or terminate the operation of the scheme and in such event no payment of cash in respect of the scheme shares will occur but in all respects the provisions of the scheme will remain in force.