New Delhi: State-owned mining behemoth NMDC Ltd on Saturday said it will buyback over 80.08 crore shares worthRs.7,527.76 crore, most of which will go to the government.
NMDC provided the information to the Bombay Stock Exchange in its Postal Ballot Notice, which “seeks approval of the members (shareholders) by way of special resolution through postal ballot for buyback of not exceeding 80,08,25,526 equity shares of the company… through a tender offer route at a price of Rs 94 equity share of face value of Re 1 each in cash for an aggregate consideration not exceeding Rs 7,527.76 crore”.
A major portion of the buyback will go to the government, which owns 80% in the Hyderabad-based minerals explorer. The move will help the government in realising its disinvestment target of Rs.56,500 crore for the fiscal. Further, the company said the buyback shall not be exceeding 25% of the aggregate of fully paid-up share capital and free reserves of the company.
The mining firm said to the extent legally permissible, it will buyback shares by way of acquiring the shares through the stock exchange. Share buyback is a process of acquisition by a company of its own shares.
Buyback is done with the objective of returning surplus cash to the holder of equity shares of the company. Other public sector units—MOIL and Nalco have also announced about share buyback plans. The Department of Investment and Public Asset Management (DIPAM), previously known as Department of Disinvestment, has been asking such cash-rich PSUs to utilise surplus cash in either capex or buyback.
NMDC stock closed 0.59% up at Rs.94.35 on BSE on Friday.
http://www.livemint.com/Money/UXjevMOBaD140SEqZ7DUVO/NMDC-to-buyback-shares-worth-Rs7528-crore.html
Source: Mint