Centum Investment Company PLC will seek shareholders’ nod for its proposed Ksh 66.5 million of its issued and paid-up capital share buyback, the company said in a regulatory filing.
The Centum board, on November 29 had, announced a share buyback of up to 10.0% via the open market route, for a price of Kshs 9.0 per share and a minimum price of Kshs 0.5 per share, per the CMA Guidelines on Share Buybacks for Listed Companies.
The transaction will see Centum reduce its outstanding shares to 598.9 million shares, from the current 665.4 million shares, with the shares bought classified as treasury stock after shareholder approval.
The buyback program will run for 18 months from the date of the shareholders’ resolution to adopt the program.
Centum becomes the second company in the Nairobi Securities Exchange (NSE) to undertake a share repurchase program, after Nation Media Group (NMG).
“We expect the buyback to offer liquidity of Centum shares in the Nairobi Securities Exchange Market and improve the firm’s share price performance, which has registered a 45.3% year-to-date decline to Kshs 8.0 as at November 30 2022, from an opening price of Kshs 14.7 in January 2022,” Cytonn Investments said in its Cytonn Monthly – November 2022.
“The decline in the number of Centum Investment’s outstanding shares is expected to anchor Net Asset Value (NAV) and increase the earnings per share for investors who opt to hold their stake.”
Yearly, Centum’s earnings per share have registered a 32.6% decline to losses of Kshs 1.2 in September 2022 from losses of Ksh 0.9 in September 2021.