Key
"Takeaway" from the OGM: If you've been following GFH you
know that over the past two years they have "invested" a
lot of money in Treasury Share trading. FY 2019 OGM Agenda Item #6
may signal a change in strategy or perhaps "mission
accomplished". Or perhaps a new way to "clean out" accumulated Treasury Shares?
The measure proposed using 140 million of GFH's
Treasury Shares to fund strategic acquisitions. Expect a subsequent
post on this topic.
GFH
held an
Ordinary General Meeting on 29 December 2019. PPAs
you hopefully noted from the "an"
above, this was not "the"
annual OGM held to approve the audited annual financials, etc.
Rather it was an OGM called to obtain approval for some near term
actions that GFH's Board wanted to take. Actions that could not
"wait" until the annual OGM held after the release of GFH's
audited FY financials.
These urgent items are securing approval for (a) the issuance of up to a USD 500 million
sukuk and (b) the use of 140 million in Treasury Shares for a
strategic acquisition(s) of financial institution(s).
Once
GFH publishes its FY 2019 audited financials, we can expect another
OGM to be held.
While
GFH has posted the OGM
minutes, they are available in Arabic only. GFH is known to be
careful with expenditures of its shareholders funds so that not a
penny is misspent.
As
usual AA has the back of interested parties whose lack of Arabic
language skills is perhaps compensated by their investment
acumen.
As
befits his surname or perhaps because of it, GFH’s CEO was
appointed as “Chair” of the meeting.
Agenda
Item #1 – Approval of minutes of the FY 2018 OGM. No shareholders
had any formal comments or objections to the minutes which were then
unanimously approved.
Agenda
Item
#2
– Approval of Board recommendation for GFH to issue up to USD 500
million sukuk through an SPV, subject to regulatory approval. No
recorded comments. Approved unanimously.
Agenda
Item #3 – Authorise the Board or whoever they delegate to take all
necessary actions to issue the Sukuk. No recorded comments.
Approved unanimously.
Agenda
Item #4 – Authorise the CEO to take all necessary steps “without
limit” to secure regulatory approval for the sukuk. Unanimously
approved. AA
has no comment on the intent of the phrase “without limit”. But
invites those with ideas to comment.
Agenda
Item #5 – Authorise appointment of SICO as market maker in GFH
stock until the OGM for the year end 31 December 2022.
This item
sparked the first and only question from an unnamed shareholder
holding an undisclosed number of shares. He asked if there weren’t
any other companies who made a better offer than SICO.
Mr. AlRayyes
said that other offers had been been received. He then proposed an
amended Agenda Item to authorise the Board to select the market maker
they felt was the most “appropriate”. The measure passed with
100% approval.
Agenda
Item # 6 – Authorise the use of 140 million (equal to 3.8% of total
issued and outstanding shares of GFH) of the Treasury Shares
currently being used to “make a market” in GFH shares for a
strategic acquisition of shares in a financial company, subject to
approval of CBB, and entrust the Board or whoever they delegate to
take all necessary measures. Unanimously approved.
Does
this mean that GFH has rethought the scope of its Treasury Share
transactions? Clearly, from Agenda Item #5, GFH intends to continue
them at some level? Or is there something else behind this
interesting
decision? Another post will be forthcoming after GFH publishes its
FY2019 audited financials.
Agenda
Item #7 – To discuss any matters in connection with Article 207 of
the Commercial
Companies Law.
Article 207 allows the introduction of (new) agenda items at an OGM,
that is, items that were not included in the original agenda. There
being none the OGM was concluded.
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