A total 1.704 billion ordinary shares of Dangote Cement Plc are to be mopped up from the stock market by the board via a share buy-back programme.
But before this exercise is carried out, shareholders of the company will first approve it at an Extraordinary General Meeting (EGM) fixed for Wednesday, January 22, 2019 at the Eko Convention Centre, Lagos.
Reports have it that the total units of the shares to be purchased from shareholders represents 10 percent of the total issued shares of the cement giant; 17,040,507,405 ordinary shares.
It was disclosed that at the EGM, shareholders will meet to determine what price the shares should be bought, but from what the firm said, the offer price must not be more than 5 percent above the five-day average trading price and this would be calculated using the five days preceding the offer date.
It was further stated that the 1,704,050,741 shares of Dangote Cement proposed to be repurchased from the market would be cancelled after the exercise in order to reduce the amount of share capital.
The programme is expected to be funded from the company’s retained earnings, while none of the board of directors would be allowed to participate in the buy-back programme, which would be executed through an open market and or self-tender offer at a prevailing market price. As at the close of business on Friday, December 27,2019, shares of Dangote Cement were traded at N140 each.
“The company recorded a profit after tax of N390.3 billion for the year ended December 31, 2018 and N154.4 billion for the nine months ended September 30, 2019. Dangote Cement retained earnings stood at N848.7 billion as at December 31, 2018 and N731.2 billion as at September 30, 2019. The company intends to fund the programme from its reserves,” a notice to the Nigerian Stock Exchange (NSE) stated.
“The buyback will be completed within 12 months from the date of receipt of the approval of shareholders for the programme. The board may delay, amend or terminate the programme at any time by releasing an announcement to that effect to the NSE, irrespective of whether any or all of the shares have been repurchased.
“Unless otherwise approved by the regulator, the company shall not implement the programme within 15 days prior to the publication of its annual or interim results,” the disclosure added.