Centum Wants Back Its Shares To Reclaim Fading Glory
By Soko Directory Team / Published December 5, 2022 | 6:34 am
KEY POINTS
The buyback is aimed at providing liquidity to shareholders who want to sell their stakes while enhancing Net Asset Value (NAV) per share for investors who will hold their stakes.
KEY TAKEAWAYS
The decline in the number of Centum Investment’s outstanding shares is expected to anchor NAV and increase the earnings per share for investors who opt to hold their stake.
Centum Investment Company PLC issued a share buyback notice to shareholders, proposing to buy back up to 10.0% (66.5 mn shares) of its issued and paid-up share capital in accordance with Part XVI, Section 447 of the Companies Act, 2015 of the Laws of Kenya.
The buyback, an on-market transaction, is set to see the company reduce its outstanding shares to 598.9 mn shares, from the current 665.4 mn shares, with the shares bought classified as treasury stock subsequent to shareholder approval.
Key to note, the buyback program will run for a period of 18 months from the date of shareholders’ resolution to adopt the program.
The Board approved a maximum price for the buyback of Kshs 9.0 per share and a minimum price of Kshs 0.5 per share, in accordance with the CMA Guidelines on Share Buybacks for Listed Companies which caps the maximum price capped at 10.0% above the weighted average price of Kshs 8.2 in the 30 days prior to the board resolution on approving the buyback.
The buyback is aimed at providing liquidity to shareholders who want to sell their stakes while enhancing Net Asset Value (NAV) per share for investors who will hold their stakes.
Key to note, Centum Investment Company will be the second company in the Nairobi Securities Exchange (NSE) to undertake a share repurchase program, after Nation Media Group (NMG).
“We expect the buyback to offer liquidity of Centum shares in the Nairobi Stock Exchange Market and improve the performance of the firm’s share price which has registered a 45.3% year-to-date decline to Kshs 8.0 as of 30th November 2022, from an opening price of Kshs 14.7 in January 2022,” said Cytonn Investment in their latest report.
The decline in the number of Centum Investment’s outstanding shares is expected to anchor NAV and increase the earnings per share for investors who opt to hold their stake.
On a yearly basis, Centum’s earnings per share have registered a 32.6% decline to losses of Kshs 1.2 in September 2022, from losses of Kshs 0.9 in September 2021. Key to note, Centum Investments has registered dismal performance for the six-month period ending Sept 2022.
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