August 26, 2022 (MLN): The Board of Directors of Lucky Cement Limited (PSX: LUCK) has approved the purchase/ buy-back of up to 10 million issued ordinary shares of the company, having a face value of Rs10 each, the company’s filing on PSX said today.
In this regard, the board, in its meeting held on August 25, 2022, decided to recommend to the shareholders of the company for their approval by passing special resolutions.
According to the notice, the purchase period will commence from September 29, 2022, to December 19, 2022, or till such date that the purchase is complete, whichever is earlier.
The buy-back will be made from the distributable profits of the company in accordance with Section 88 (8) of the Companies Act, 2017. The company will utilize its internally generated cash flows for the said transaction.
The board has recommended the purchase/buy-back, as the same will have a positive effect on the future financial position of the company, including the break-up value of the company's shares and its Earnings per Share (EPS).
It will also provide an opportunity for exit to those members who wish to liquidate their investment, fully or partially, the notice added.
To note, the Securities and Exchange Commission of Pakistan (SECP) notified the Listed Companies (Buy-Back of Shares) Regulations in August 2016.
These regulations provide for either cancellation of the purchased shares or retaining the same as treasury shares.
The earlier framework for buy-back did not provide for retaining the purchased shares as treasury shares, rather the purchased shares had to be canceled.
As per the press release issued by SECP, the buy-back of own shares by listed companies is normally undertaken for stabilizing the market price of their shares particularly when the market is passing through a bearish phase. The regulations had been finalized after obtaining public comments and holding consultation sessions with key stakeholders.
The regulations encompass the eligibility criteria for buy-back, like maintaining the minimum paid-up capital and free float, authorization of the purchase with the approval of the members of
the purchasing company by way of a special resolution, the purchase methods, appointment of the manager to purchase, procedure for setting the purchase price, restrictions, rights and privileges of the treasury shares, limitation on treasury shares, compliance with the applicable international financial reporting standards relating to the treasury shares, disposal of treasury shares and maintaining record thereof.
The regulations help the listed companies to buyback their own shares in a transparent manner to achieve the desired purpose in the best interest of the purchasing company, the shareholders and the capital market, it added.
Copyright Mettis Link News
Posted on:2022-08-26T09:42:09+05:00
34785
