SBS Philippines Corp, a listed chemical traders and distributor firm diversifying into property and investment business, has launched a $4 million (P200 million) buyback programme and approved a $50 million (P2.5 billion) debt agreement with Security Bank Corp.
SBS disclosed on Wednesday (April 12), that the share buyback programme will replace the previous mandate while its P2.5 billion agreement with Security Bank is a five-year fixed interest term loan.
“The buyback programme is intended to enhance shareholder value, confidence, and strengthen the fundamental value of the company’s shares,” SBS said in its statement.
To be undertaken in open market within the Philippine Stock Exchange, transactions of shares repurchases will run from April 18, 2017 until the amount earmarked for the programme has been fully utilized.
“The programme will be funded by internally generated funds from its unrestricted retained earnings and is not expected to affect any of the company’s existing or prospective projects and dividend policy,” SBS added.
Repurchased shares will be held as treasury shares and based on the last trading price of P5.98 per share last April 10, this will approximately involve some 33,444,816 common shares or about 2.79 per cent of SBS’s issued share capital.
Since the start of the share buyback program in November 2016, SBS has purchased a total of 30,959,600 common shares for a total value of about P200 million.
As for the P2.5 billion loan, it is offered at a fixed preferential interest rate with a two-year grace period on principal amortizations.
The loan will be used to bankroll purchases of property related investments of the SBS group of companies in line with the diversification strategy to increase the property-related investments portfolio of the group.
SBS recently announced plans of venturing into property and investments to provide balance to counteract some of the fluctuations in the chemical trading business.