The way is now clear for Salada Foods Jamaica Limited to execute its 10:1 stock split slated for next Wednesday, March 31.
This following last week’s unanimous approval by shareholders of three resolutions to effect the stock split, which was announced as far back as February of last year. A stock split is a corporate action whereby a company divides its existing stock into multiple shares to boost liquidity.
This is also done to make share prices more attractive. The approval by shareholders was done at the company’s 56th annual general meeting (AGM), hosted virtually for the first time, in accordance with the Supreme Court of Jamaica order, dated February 18, 2021 for the AGM to take place electronically.
The shareholders approved that the 103,883,290 outstanding ordinary shares in circulation being split into 1,038,832,900 shares and that the maximum number of shares that the company is entitled to issue be increased from 500,000,000 to an unlimited number of ordinary shares. They also approved that the shares in the company be subdivided into 10 ordinary shares with effect from the close of business on Wednesday, March 31, 2021.
COMPANY’S ISSUED SHARE CAPITAL TO GO UP
This will result in the total issued capital of the company being increased from 103,883,290 ordinary shares to 1,038,832,900 ordinary shares. The final resolution approved required that all the shares in the company, which are not yet issued be converted into stock units when issued and fully paid.
Salada, which is in the business of food manufacturing and coffee processing, last stock split occurred in November 2008 when the company shares were priced at $100 before another 10-to-1 split. The split was implemented then as the near doubling of the stock’s market price in the months prior to November 2008 was taking it out of the reach of mainstream investors.
At the height of Salada’s stock split in 2008 the company had 10.4 million shares in issue and was already one of the Jamaica Stock Exchange’s most illiquid stocks, which trades in tiny volumes.
At Monday’s trading the stock ended at $41.52.