The Centum Investment Company PLC shareholders are set to vote on the firm’s planned share buyback plan after the board approved.
The said voting is to take place in a meeting set for February 3, to enable the share payback to provide liquidity for owners of the dual-listed firm as well as reward long-term shareholders of the company whose proportionate holding will increase because of the share repurchase.
“The buyback plan offers investors with a long-term view of the Centum stock to benefit from potential improvement in future earnings and capital gains,” said the Centum Group CEO James Mworia.
According to the guidelines by Capital Markets Authority (CMA), Centum will be allowed to repurchase up to 10% of the firm’s issued and paid-up share capital for a minimum of sh0.50 per share and a maximum of sh9.03.
Centum has been exempted from the limit under the trading Guidelines to purchase no more than 25 percent of the average daily trading volume for the four calendar weeks preceding the date of purchase.
The Company’s shares at the current prices are deeply discounted relative to Net Asset Value per Share. Its share price is down by 44 per cent year-to-date trading at Sh8.60 on Thursday.
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Centum is primarily listed on the Nairobi Securities Exchange (NSE), with a cross-listing on the Uganda Securities Exchange.
“The share buyback is also expected to provide liquidity to shareholders who may not have been able to trade due to the current depressed market conditions,” added Mworia.
The share buyback is expected to enable the company achieve alignment of shareholding to the long-term value objectives of the company by offering an opportunity to those investors who may wish to cash out while reward those who wish to remain as shareholders.