NEARLY a year after the coronavirus pandemic derailed the company’s plans, Salada Foods Limited has announced the details of its upcoming stock split which is scheduled to take effect on March 31.
The instant coffee company had considered the split last March for the stock which has tended to be illiquid due to the small float available on the market.
The top 10 control 89 per cent of the issued shares, with the company being 76 per cent controlled by Donovan Lewis through Resource in Motion Limited and other affiliates.
However, in a notice posted on the Jamaica Stock Exchange, Salada has indicated that it intends to execute a 10-to-1 stock split which will see the 103,883,290 outstanding ordinary shares in circulation being split into 1,038,832,900 shares.
This will occur through the creation of an additional one billion units which will triple the authorised share capital from 500 million units to 1.5 billion units. The split news sent Salada’s share price to an intraday high of $36 for a stock which has less than 10 sell orders on the market.
Despite the board approving the resolution at the meeting on January 21, the company must now seek the approval of the shareholders at its upcoming annual general meeting (AGM) for the split to come into effect.
Salada held its last AGM in February 2020 and has not indicated whether or not it has applied to the Supreme Court for holding the shareholder meeting in a hybrid or full-electronic format. Salada’s last stock split occurred in November 2008 when the company was priced at $100 before another 10-to-1 split.
This split news is expected to drive the stock price higher before the split date for the company which lost its bid in the courts to delay the increase of the 10 per cent cess of local coffee in its instant mix to 30 per cent. Salada’s net profits declined by 22 per cent to $110.5 million against the backdrop of a 4 per cent decline in revenues and increased cost of sales.