Investment firm Centum will seek the approval of its shareholder to buy back 10 percent of its listed shares at an extraordinary general meeting on February 3.
The company expects to secure the backing of its shareholders at the meeting before opening the buyback programme on February 6 and over 18 months to August 8, 2024.
Centum is seeking to re-acquire 66.5 million shares at a price of between 50 cents and Sh9.03 on an open market basis with the buyback price representing the volume-weighted average price of the company’s shares in 30 days preceding the share buyback’s board approval.
The company’s share price closed at Sh8.5 in Thursday's trading session, trading 10.39 percent above the 52-week low of Sh7.7 set on November 24, 2022.
The share repurchase programme is open to all shareholders regardless of the size of their shareholding but subject to the maximum buyback size.
The Nairobi Securities Exchange-listed firm told shareholders the programme would provide them with cash/liquidity and improve future earnings and gains from a higher share price.
“The company is proposing a buyback of up to 10 percent of its listed ordinary shares to offer the company’s shareholders partial liquidity of their shareholding at the prevailing market price while retaining optionality to benefit from potential improvement in future earnings and capital gains,” said Centum in a statement.
“As the demand and supply of the company’s shares balance out during the buyback period, it is expected that the market price will adjust accordingly to better reflect the fair value of the company’s ordinary shares.”
The board of the company has reserved the right to terminate the buyback on conditions including when the programme is no longer deemed to be in the best interest of the company and shareholders, changes to economic and market conditions and in the incidence of a material change in the firm’s financial position.
At the successful completion of the share buyback, Centum’s floating shares will reduce to 598.9 million.
The share buyback has already obtained regulatory approval from the Capital Markets Authority (CMA).