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AGRI-FOOD company Japfa on Monday (Aug 19) proposed undertaking an off-market purchase of its ordinary shares at S$0.355 apiece under an equal access scheme.
The company will buy back up to around 183.3 million shares, or about 9 per cent of its shares in issue as at Monday.
The offer price represents a 6 per cent premium over the last dealt price of the share on Monday, the latest date on which the shares were traded before the offer was announced.
It also represents premiums of 8.6 per cent, 17.5 per cent, 22.4 per cent and 27.7 per cent over the three-month, six-month, nine-month, and 12-month volume-weighted average prices, respectively, up to the last trading date.
Assuming Japfa buys back the maximum number of shares available, the company will commit S$65.1 million. This amount will be funded through internal resources or external borrowings, said the company.
The proposed offer is not expected to have any adverse material effect on the company’s working capital requirements and gearing levels.
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Each shareholder will be entitled to sell to the company up to 9 per cent of their total number of shares held in their own name, said the group.
All the shares bought back will be first held as treasury shares, and will subsequently be used and/or cancelled.
The offer came as Japfa’s shares were trading below its net asset value of S$0,52, said the company.
“The equal access offer demonstrates the company’s confidence in its long-term growth potential,” it said.
Japfa also noted that the offer gives shareholders an opportunity to realise a portion of their investments in the shares at a premium over recent market prices of the shares without incurring transaction costs.
Shares of Japfa closed down 2.9 per cent or S$0.01 at S$0.335 on Monday before the announcement.
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