Habib Sugar Mills Limited (HABSM) has announced plans to repurchase up to 15,000,000 ordinary shares through the Pakistan Stock Exchange (PSX), according to a notice issued on Tuesday. The face value of these shares is Rs5 each, representing up to 10% of the current issued and paid-up share capital of the company. The decision was made in a meeting of the Board of Directors (BoD) on December 23, with the recommendation for approval by special resolutions from the company’s members. The purpose of the buyback is the cancellation of shares, to be purchased at the prevailing spot/current price from February 2, 2024, to July 30, 2024, or until the purchase is complete.
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HABSM clarified that the funds for the share repurchase will be sourced from distributable profits, in accordance with Section 88(8) of the Companies Act, 2017. The company expressed its intention to utilize internally generated cash flows to ensure adequate funds for the buyback. The BoD anticipates a positive impact on the company’s financial position, expecting improvements in Earnings per Share (EPS) and the break-up value of the company’s shares.
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Additionally, the buyback is viewed as an opportunity for shareholders seeking to liquidate their investments. Habib Sugar Mills Limited, incorporated in Pakistan in 1962, is involved in the manufacturing and marketing of refined sugar, ethanol, liquified carbon dioxide, household textiles, and provides bulk storage facilities, along with commodity trading.
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