Share buy-back: Dan­gote Ce­ment share price rises

The Punch - - CAPITAL MARKET -

THE share price of Dan­gote Ce­ment Plc has in­creased to N142 in two days fol­low­ing the com­pany’s an­nounce­ment of its share buy-back scheme.

Dan­gote Ce­ment had on De­cem­ber 27, 2019 re­vealed plans to buy back 10 per cent of its en­tire is­sued shares from share­hold­ers.

The com­pany said in a no­tice, which was filed at the Nige­rian Stock Ex­change on Fri­day, that the de­ci­sion to buy back shares was aimed at im­prov­ing re­turn on eq­uity.

Dan­gote Ce­ment, which cur­rently has 17.04 bil­lion fully paid-up or­di­nary shares of 50 kobo each, would be buy­ing back 1.70 bil­lion shares.

It said the share buy-back was go­ing to be on terms and con­di­tions de­ter­mined by the board of direc­tors.

On Mon­day, the trad­ing vol­ume of Dan­gote Ce­ment shares in­creased to 11 mil­lion from about one mil­lion or less pre­vi­ously recorded while the share price in­creased to N141.50.

On Tues­day, 17 mil­lion shares of Dan­gote Ce­ment were traded on the floor of the ex­change as the share price climbed to N142.

The N142 share price was sus­tained on the first trad­ing day of the year 2020 as about two mil­lion shares were traded.

Ac­cord­ing to the no­tice, the buy-back pro­gramme will be com­pleted within 12 months from the date of re­ceipt of the ap­proval of share­hold­ers for the pro­gramme.

The no­tice read in part, “Un­less re­quired by law or di­rected by ap­pro­pri­ate reg­u­la­tory author­ity, the com­pany may can­cel such num­ber of is­sued shares re­pur­chased, or oth­er­wise ac­quired un­der the pro­posed trans­ac­tion as con­firmed by the com­pany’s reg­is­trar and di­min­ish the amounts of its share cap­i­tal by the amount of its shares so can­celled, in ac­cor­dance with all ap­pli­ca­ble laws and reg­u­la­tions.

“The shares will be re­pur­chased out of the prof­its of the com­pany and such num­ber of shares bought un­der the pro­gramme is re­quired to be can­celled in ac­cor­dance with the Se­cu­ri­ties and Ex­change Com­mis­sion rules and the Nige­rian Stock Ex­change Rule­book 2015, which will con­se­quently lead to a re­duc­tion in is­sued share cap­i­tal.”

The com­pany said the share buy-back also aimed to im­prove share­holder value in or­der to fa­cil­i­tate long-term growth.

It added that the self­ten­der of­fer price would be de­ter­mined by the board, but would not be more than five per cent of above the av­er­age cal­cu­lated mar­ket price over the five days pre­ced­ing the of­fer.

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