By Dipo Olowookere
For two days, Dangote Cement will buy back 170 million shares from the open mark in the tranche II of its share buyback programme that commenced in 2020.
A notice seen by Business Post showed that the exercise will commence on Wednesday, January 19, 2022, and will end on Thursday, January 20, 2022.
Dangote Cement has a total of 17,040,507,404 fully paid-up ordinary shares of 50 kobo each and in this tranche, the company is repurchasing 170,003,074 fully paid-up ordinary shares of 50 kobo each, representing one per cent of the currently issued stocks.
It was gathered that the equities would be acquired in the open market, subject to prevailing market conditions and under the current daily trading rules of the Nigerian Exchange (NGX).
The stockbrokers for the transaction are Meristem Stockbrokers Limited and Vetiva Securities Limited.
According to the cement giant, it would, however, not be under any obligation whatsoever to purchase any or all of the shares put on offer over the duration of tranche II.
A share buyback is one of the options used by companies when their shares are undervalued in the market. When these stocks are bought from shareholders, they can then be reissued at a higher value when investors are jostling to have them because of improved market conditions and growth prospects.
Dangote Cement is planning to pay cash to shareholders of the company in exchange for 10 per cent of the total shares outstanding of the firm in their possession. This transaction is being done in tranches.
In the first tranche, which commenced on December 30 and ended on December 31, 2020, Dangote Cement bought back 40.2 million shares at an average price of N243 per unit, representing 0.24 per cent of the company’s issued and fully paid ordinary shares of 17.0 billion units. The value of repurchased stocks in the first tranche was N9.8 billion.
At the stock exchange on Tuesday, January 11, 2022, shares of the organisation depreciated by 0.39 per cent or N1 to N259.00 per unit.
Adedapo Adesanya