Dangote Cement Plc has announced plans to buy back 10 per cent of its entire issued shares from shareholders.
In a notice filed at the Nigerian Stock Exchange on Friday, the company said the decision was aimed at improving return on equity as well as shareholder value in order to facilitate long-term growth.
Dangote Cement currently has 17.04 billion fully paid up ordinary shares of 50 kobo each. It said it would be buying back 1,704,050, 741 shares and that the buy-back will be funded from its reserves.
According to the notice, the buy-back programme will be completed within 12 months from the date of receipt of the approval of shareholders for the programme which it said will be on terms and conditions determined by the board of directors.
The notice read in part, “Unless required by law or directed by appropriate regulatory authority, the company may cancel such number of issued shares repurchased, or otherwise acquired under the proposed transaction as confirmed by the company’s registrar and diminish the amounts of its share capital by the amount of its shares so cancelled, in accordance with all applicable laws and regulations.
“The shares will be repurchased out of the profits of the company and such number of shares bought under the programme is required to be cancelled in accordance with the Securities and Exchange Commission rules and the Nigerian Stock Exchange Rulebook 2015, which will consequently lead to a reduction in issued share capital.”
It said the buy-back resolution would be passed as a special resolution to the provisions of the Sections 48 and 106 of the Companies and Allied Matters Act as well as Rule 398(3)(iv) of the SEC Rules.
Dangote Cement also issued a notice of an Extraordinary General Meeting (EGM) scheduled for the January 22, 2020. The company will be seeking shareholders’ approval to amend its articles of association to enable it to conduct a share buyback and approval for the scheme.
According to the company, though there would be brokerage fees and other costs, the management was of the opinion that the proposed share buy-back programme would not have any adverse effect on the company’s working capital position and gearing ratio in the long term.