Dangote Cement To Buy Back 170 Million Shares From Investors

Dangote Cement Plc will commence the second phase of buying up to 10 per cent of its outstanding shares back from the public.

Share buybacks refer to the repurchasing of shares of stock by the company that issued them.

A buyback occurs when the issuing company pays shareholders the market value per share and re-absorbs that portion of its ownership that was previously distributed among public and private investors.

Dangote Cement had stated plans to undertake the share buyback in January 2020, however the coronavirus outbreak frustrated the shares buy back.

But in December 2020, the company managed to mop up just 0.24 per cent shares which is 40.200 million units of the 0.50 per cent proposed for the first stage. It cost Dangote N9.77bn.

With the second tranche of the share buy back, the company hopes that the programme will provide the needed push to drive up share price and improve valuation.

The company said on Wednesday in a notice sent to the Nigerian Exchange Limited that it will commence with the purchase of more of its 17.04 billion (17,040,507,404) shares from the open market.

The country’s biggest cement manufacturer said it is buying 170,003,074 fully paid-up ordinary shares of 50 Kobo each in the trench two.

“This includes 40,200,000 shares held as treasury shares, following the conclusion of Tranche I of the Share Buyback Programme,” the company added.

This volume represents one per cent of Dangote’s currently issued shares, but with the exception of its treasury shares.

The company said the share buyback will begin January 19 and end January 20, or when the entire Tranche Size has been purchased; whichever is earlier.

It said, “The shares being repurchased by the Company under the Share Buy-Back Programme
will be held as treasury shares and may subsequently be canceled.

“Execution of this Tranche II is not expected to have any material impact on the Company’s financial position.”