Australia-listed Donaco International announced on Monday that it is implementing an on-market buyback for up to 41.5 million shares, representing a maximum of 5 percent of its ordinary shares on issue.
Donaco said the buy-back is being undertaken as part of the company’s ongoing capital management program, and is expected to commence on or after October 30, 2017.
“The board considers that the introduction of an on-market buy-back is in the best interests of all shareholders, complementing our dividend payment,” said Donaco managing director Joey Lim.
“At current share prices, the buy back will be earnings per share accretive, and will have no impact on current operating businesses. It is also consistent with our strategy of maintaining an efficient capital structure,” he added.
Under the company’s debt facility with Mega Bank, dividends and buy-backs combined cannot exceed 30 percent of the company’s net profit after tax for FY17, said Donaco in a filing.
Thus, the maximum dollar amount that can be spent on the buyback is $5.1 million.
The buy-back will be open for 12 months.
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