The Securities and Exchange Commission (SEC) Nigeria has approved a new share buy-back programme for Dangote Cement Plc as part of the manufacturing company’s financial strategies for improved returns on its assets and stock value.
A Notice on the approval from the Nigerian Exchange Limited (NGX) indicated that the share buy-back programme would expire on December 12 this year, which is exactly one year from the date the shareholders approved it at their Extraordinary General Meeting (EOGM).
According to the offer terms, the share buy-back will be undertaken through an open market offer or self-tender, at such times and on such terms as the management of the company may determine, subject to prevailing market conditions.
The Company stated: “The company will continue to monitor the evolving business environment and market conditions, in making decisions on tranches of the share buy-back programme”.
A share repurchase programme reduces the total assets of a listing company for improved returns on assets, return on equity and other financial assessment indices.
For instance, a reduction in the number of shares implies that earning per share (EPS) value can quickly increase as revenue and cash flow surges with the attendant positive implications for shareholder’s value in the long term.
It would be recalled that the manufacturing company’s shareholders had at their EOGM held on December 13, 2022, approved a share buy-back of up to 10 per cent of the company’s issued shares effective from the date of the resolution and authorized the management to implement the decision.
Similarly, the investors also approved that the company’s Memorandum and Articles of Association be amended (as applicable) upon the completion of the share buy-back, to reflect the company’s share capital, following the cancellation (if any) of the shares acquired and/or otherwise held by the company.