Dangote Cement Plc has indicated a fresh plan to buy back 10 per cent of its issued share capital in a transaction valued at more than N406 billion, according to a regulatory filing.
Amidst increased leverage, the Nigerian largest cement company has seen its share price backtracked despite previous share buyback targeted at stemming volatility. On Friday, Dangote Cement’s share price closed at N238.50 per share, down from a peak level of N300.
In a regulatory filing, Dangote Cement seeks to repurchase about 1.704 billion shares of its own shares, being the 10% it plans to remove from public trading.
Data from the Nigerian Exchange indicates that the cement company has 17.04 billion outstanding shares valued at N4.055 trillion.
To effect the move, its board of directors has summoned an extraordinary general meeting of shareholders to consider and approve the share buyback. It said the share buyback was in line with its corporate strategy, an indirect way to increase return on equity and shareholder value
The cement company explained that the shares will be repurchased out of its profit and such repurchased shares may be held as treasury shares or cancelled, thus leading to a reduction in the share capital.
Culled from dmarketforces
