 has commenced the first tranche of its share buy-back programme worth an estimated N19.5 billion,){kind=link}
Dangote Cement Plc (DCP) has commenced the first tranche of its share buy-back programme worth an estimated N19.5 billion, according to MoneyCentral calculations.
The Share Buy-Back Programme will be executed under the approval granted by the Company’s shareholders at the Extraordinary General Meeting of DCP which held on 21 January, 2020, within the framework provided under Rule 398 (3)(xiv) of the Securities and Exchange Commission’s (SEC) Rules and Regulations (as applicable) and in accordance with Rule 13.18 of the Rulebook of the Nigerian Stock Exchange (“The NSE”).
Based on the aforementioned shareholders’ approval, the number of shares to be repurchased under the Share Buy-Back Programme will not exceed 10 percent of DCP’s issued capital.
The Programme will be effected in tranches, with Tranche I being executed by the appointed stockbrokers on the Company’s behalf.
Relevant details of this Tranche I are: Tranche Size: Up to 85,202,537 fully paid up ordinary shares of 50 Kobo each, representing 0.5 percent of the entire current issued shares, commencement date: Wednesday, 30 December, 2020, and completion Date: Thursday, 31 December, 2020, or when the entire Tranche Size has been purchased; whichever is earlier.
Meristem Stockbrokers Limited and Vetiva Securities Limited through its appointed Stockbrokers will at its discretion purchase DCP shares in the open market over the duration of Tranche I, subject to prevailing market conditions and under the current daily trading rules of The NSE.
Dangote Cement Plc would however not be under any obligation whatsoever to purchase any or all of the DCP shares put on offer over the duration of Tranche I.
The shares being bought back by the Company under the Share Buy-Back Programme will be held as treasury shares, and may subsequently be cancelled.
Execution of this Tranche I is not expected to have any material impact on the Company’s financial position. Dangote Cement shareholders seeking to participate in Tranche I of the Share BuyBack Programme are to contact their stockbrokers or any other independent professional adviser registered as a capital market operator by the SEC for further guidance on submission of trades on The NSE’s trading platform.
“DCP will provide weekly updates on the progress of Tranche I of the Programme on its website over the duration of this tranche. The Company will continue to monitor the evolving business environment and market conditions, in making decisions on further tranches of the Share Buy-Back Programme,” Dangote Cement said in a statement.
Dangote Cement announced a share buyback program late last year that intends to repurchase up to 10 percent of outstanding float of the company.
A share re-purchase or buyback, is a decision by a company to buy back its own shares from the marketplace. A company might buy back its shares to boost the value of the stock and to improve the financial statements. Companies tend to repurchase shares when they have cash on hand, and the stock market is on an upswing.
Dangote Cement has 17 billion shares outstanding meaning it could buy back up to 1.7 billion shares if it completes the buyback.
Dangote Cement is Africa’s leading cement producer with operations in over ten (10) African countries including Nigeria, Cameroon, Congo, Ethiopia, Ghana, Senegal, Sierra Leone, South Africa, Tanzania and Zambia. The Company generated revenues of N761.44 billion in the nine-month period ended 30 September, 2020 (9M 2019: N679.79 billion) and net profit of N208.69 billion (9M 2019: N154.35 billion). DCP is a public company listed on The Nigerian Stock Exchange (NSE).