Dangote Cement to buy back up to 10% of issued shares

The shareholders of Africa’s largest cement maker, Dangote Cement Plc have authorized the Board to undertake a share buyback of up to 10 per cent of its issued shares as of the date of the resolution.

This and other resolutions were passed at the Extraordinary General Meeting (EGM) of Dangote Cement Plc which was held in Lagos on Tuesday, December 13, 2022.

What is share buyback?

A share buyback is when a listed company uses cash to buy its shares in the open market. A company may do this to return money to shareholders that it doesn’t need to fund operations and other investments. The repurchased shares are absorbed by the company, reducing the number of outstanding shares on the market. the company absorbed the repurchased shares

Advantages of share buyback

Companies benefit from a stock buyback because it can preserve stock prices, consolidate ownership, and take the place of dividends. Investors can benefit because their purchasing doesn’t always benefit them and purchase doesn’t always benefit investors.

Read also: Polaris Bank MD stresses need to tackle cybersecurity issues

Shares saw the underperforming market

Dangote Cement has 17.040 billion shares outstanding. This year, the stock has risen by just 2.1 per cent, underperforming the stock market’s benchmark performance indicator which as of Thursday had risen by 15.26 percent this year. The company’s share was priced at N262.3 per share as at Thursday December 15, slightly above its 52-week low of N220 per share, compared to its 52-week high of N300 per share.

Other resolutions at the EGM

Also at the EGM, the shareholders, Dangote Cement Plc authorised that unless otherwise required under applicable laws and regulations or directed by the appropriate regulatory authorities, the Company may cancel such number of issued shares repurchased  under the share buyback or otherwise held by the Company in its issued share capital, as confirmed by the Company’s registrar, and to diminish the amounts of its share capital by the amount of the shares so cancelled, by with all applicable laws and regulations.

The shareholders also authorised that the Memorandum and Articles of Association of the Company be amended (as applicable), upon completion of the share buyback, to reflect the Company’s share capital, following the cancellation (if any) of the shares acquired and/or otherwise held by the Company.

Also, they authorised that the Board do all such acts and deeds as well as take all such steps (including but not limited to executing such agreements and documents, appointing professional advisers and other parties, complying with directives of any regulatory authority) which may be incidental, ancillary, supplemental, or otherwise necessary to give full effect to the above resolutions and for the aforesaid purpose, on behalf of the Company.

Skip to toolbar