Kohinoor Textile board recommends buyback of 30 million ordinary shares

Kohinoor Textile Mills Limited (KTML), a manufacturer and exporter of yarn and cloth, said on Monday that its board has approved the buyback of up to 30 million issued ordinary shares of the company.

The shares constitutes approximately 10.02% of the company’s total outstanding shares and, as per current stock price, are worth approximately Rs1.48 billion.

KTML shared the development in a notice to the Pakistan Stock Exchange (PSX).

“The Board of Directors of Kohinoor Textile Mills Limited…. has accorded approval to the company, subject to approval of shareholders by way of special resolution, in order to purchase/buy-back of its own shares through Pakistan Stock Exchange Limited upto a maximum of 30,000 000 constituting 10.023% of the issued ordinary shares of the face value of Rs 10 each at the spot / current share price prevailing during the purchase period in cash and out of distributable profits of the company,” read the PSX notice.

It explained that the reduced capital will consolidate equity, which will improve earnings per share, future dividends and break-up value of the company’s share subsequent to the purchase of shares.

“It will also provide an opportunity of exit to those members who wish to liquidate their investments at a reasonable price,” it added.

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The shares will be available for purchase from March 13, 2023 to August 29, 2023 or earlier if the buy-back by the company is completed before August 29.

The purchase/buy-back will be made in cash using distributable profits of the company, KTML said.

KTML was among shares that were positive on Monday, gaining Rs3.45 or 7.5% to be trading at Rs49.45, likely on account of the development.

Last year, six companies including Engro Corporation, Bank Alfalah Limited, Lucky Cement Limited, Maple Leaf Cement Factory Limited, NetSol Technologies Limited and JDW Sugar Mills Limited, announced share buy-back.