Engro Corp's board recommends buyback of 70mn ordinary shares
- Company says buyback will provide opportunity of exit to members who wish to liquidate their investments
Engro Corporation Limited said on Thursday that its board has recommended the purchase/buy-back of an aggregate of up to 70 million issued and paid-up ordinary shares of the company.
The company, one of Pakistan’s largest business conglomerates and a subsidiary of Dawood Hercules Corporation Limited, shared the development in its notice to the Pakistan Stock Exchange (PSX).
The amount of shares represents approximately 12.1% of the total outstanding shares of the company.
“The Board of Directors of Engro Corporation Limited… provided its approval to recommend to the members/shareholders of the company, for their approval vide special resolution(s), the purchase/buy-back by the company of an aggregate of up to 70,000,000 issued and paid-up ordinary shares of the company,” read the PSX notice.
As per the current share price of the company, the purchase is worth approximately Rs20 billion.
It is one of the few shares that were positive on Thursday, gaining Rs13.38 to be trading at Rs282.40, largely on account of the development. This is in stark contrast to the rest of the market as the KSE-100 was down over 1.3% earlier in the day.
This is the sixth buyback announced at PSX in 2022 after Bank Alfalah Limited, Lucky Cement Limited, Maple Leaf Cement Factory Limited, NetSol Technologies Limited and JDW Sugar Mills Limited.
Engro said the purchase/buy-back of the company’s issued ordinary shares will improve its earnings per share. “Further, it will provide an opportunity of exit to those members who wish to liquidate their investments,” it added.
The shares will be available for purchase from February 03, 2023, to July 25, 2023 (both days inclusive) or till such date that the purchase is complete, whichever is earlier, added the notice.
The purchase of shares shall be made in cash and shall be out of the distributable profits, the company said.
Engro Corporation Limited is principally engaged in managing investments in subsidiary companies, associated companies and joint ventures, engaged in fertilisers, power generation, telecommunications infrastructure, petrochemicals, mining, food, LNG and chemical storages.