Dangote Cement Plc has revealed plans to buy back 10 per cent of its entire issued shares from shareholders.
The company said in a notice, which was filed at the Nigerian Stock Exchange, that the decision to buy back shares was aimed at improving return on equity.
Dangote Cement, which currently has 17.04 billion fully paid up ordinary shares of 50 kobo each, would be buying back 1.70 billion shares.
It said the share buy-back was going to be on terms and conditions determined by the board of directors.
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.
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.”
The company said the share buy-back also aimed to improve shareholder value in order to facilitate long-term growth.
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 said an extraordinary general meeting had been convened to consider, and if thought fit, approve the alteration of the articles, programme and all matters incidental thereto.
It added that the self-tender offer price would be determined by the board, but would not be more than five per cent of above the average calculated market price over the five days preceding the offer.
It said 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.