April 6, 2021 (MLN): The Board of Directors of JS Global Capital Limited has proposed to purchase/ buyback up to a maximum of 3,991,525 issued ordinary shares (13.06% of the total outstanding shares) of the company, having face value of Rs10 each at a purchase price of Rs80 per share.
The aforesaid decision is subject to the approval of members by way of special majority.
According to the company’s notice to PSX, the purpose of this buyback is to recapitalize and restructure the balance sheet through cancellation of shares purchased by the company.
The shares will be purchased through tender offer mechanism.
The purchase shall be made in cash and shall be out of distributable profits of the company as required under sections 88(8) of the Companies Act 2017.
While providing the justification for the purchase, the company stated that the current capital is in excess of Company’s requirement. The reduced capital will positively impact the financial position and improve the earning per share. Future dividends and break-up value of the company’s share. This will also provide an opportunity of exit to those members who wish to liquidate their investment in Company’s shares.
Additionally, after the proposed buy-back is concluded, the Company shall continue to be well compliant with the minimum capital requirements prescribed by PSX for a TREC Holder, thereby having n negative impact on the company’s ability to carry on its operations without any hindrance.
The company further stated that the suggested price for buyback to be at around the breakup value of the share, which us a very attractive price for shareholders, who are not only going to be offered the intrinsic value of the share, but also likely to benefit from the premium offered via the buyback (when compared to the market price of the shares).
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