Dangote Cement Launches Tranche I Share Buyback Program

Dangote Cement Plc, a leading cement manufacturer, has recently announced the launch of its Tranche I shares buyback program. This significant development was disclosed in a company's statement shared with Nigeria Exchange Limited and made available to Investingport .

Repurchasing Strategy

Under the Tranche I share buyback program, a plan is set forth to repurchase a significant number of fully paid-up ordinary shares, specifically 168,735,593 shares with a face value of 50 Kobo each, which accounts for 1% of the total issued shares at present. The process of repurchasing will commence on July 17, 2023, and is expected to conclude within a span of two days, either on July 18, 2023, or upon the complete acquisition of the designated tranche size. It is noteworthy that these shares will be acquired from the open market at the Nigeria Exchange (NGX) during the entire duration of the program.

Treasury Shares and Financial Impact

Dangote Cement emphasizes that the shares bought back during the Share Buy-Back Program will be held as treasury shares, as permitted under the Corporate and Allied Matters Act (CAMA). The execution of Tranche I is not expected to have any substantial impact on the company's financial position.

Shareholders of Dangote Cement who are interested in participating in Tranche I of the Share Buy-Back Program are advised to contact their stockbrokers or seek guidance from independent professional advisers registered as capital market operators by the Securities and Exchange Commission (SEC). These experts will provide further assistance regarding the submission of trades on the NGX's trading platform.

Background Information

It was previously reported that the Securities and Exchange Commission (SEC) had granted approval for the establishment of a new share buyback program for Dangote Cement Plc. The program, approved by the company's shareholders at an extraordinary general meeting held on 13 December 2022, will remain active until 12 December 2023, which is 12 months from the date of the shareholders' resolution.

Previous Share Buyback Program

In January 2022, Dangote Cement Plc executed its most recent share buyback program, known as Tranche 1. During this period, the company repurchased a total of 170,003,074 fully paid-up ordinary shares of 50 Kobo each, representing 1% of the currently issued shares. The program lasted for two trading days, commencing on 19th January 2022 and concluding on 20th January 2022.

Share repurchase programs are designed to reduce the total assets of a business, thereby improving metrics such as return on assets and return on equity. By reducing the number of shares, earnings per share (EPS) can grow more rapidly as revenue and cash flow increase.

The share buyback initiative undertaken by Dangote Cement aims to increase long-term shareholder value. Additionally, it is expected to support the company's ongoing capital structure optimization and balance sheet enhancement efforts. By repurchasing shares while improving financing and balance sheet efficiency, Dangote Cement aims to reduce the cost of capital and enhance investor value.