Shareholders of Eshraq Investments have approved the acquisition of an additional 7 percent shares under its share buyback program for up to AED110 million ($29.95 million), and also gave a nod to the company’s plans to cross-list on the Saudi Stock Exchange (Tadawul).
Based in Abu Dhabi and listed at Abu Dhabi Securities Exchange (ADX), Eshraq Investments has assets of more than AED3.8 billion ($1.03 billion) in real estate, public equities, fixed income, private equity and debt products.
As part of its current buyback program, Eshraq has bought back 70.5 million shares since August 2022 at an average price of AED0.4977, generating a book value gain of AED32.73 million to its shareholders. The increased share buyback is expected to enhance shareholder value on account of the acquisition at a discount to Eshraq’s book value.
The additional buyback is subject to Securities and Commodities Authority approval.
The additional share buyback comes after request from the shareholders at its AGM held on 28 April where shareholders recommended the company increases the shareholder distribution via an increased share buyback program and replace cash dividend.
The buyback will capitalise on the current share price discount compared to the company’s book value. As of date, the company holds 93.06 million treasury shares.
Jassim Alseddiqi, Chairman of Eshraq Investments, said: “We are pleased to announce shareholder endorsement for an increase in share buyback. At the AGM, the shareholders proposed to opportunistically allocate the capital for buybacks versus dividend payments to benefit from the prevailing share price discount to Eshraq’ book value.
“The additional share buyback will further enhance long-term shareholder value due to the purchase of shares at a discount to book value.
“Eshraq has consistently delivered returns accretive to our shareholders, driven by a balanced and assertive strategy to enhance profitability. Going forward, we remain committed to leveraging opportunities to unlock further growth while delivering exceptional value to shareholders.”
As for cross-listing in Saudi, Eshraq was unable to implement it in the past because of accumulated losses on its balance sheet that did not meet the Saudi Stock Exchange criteria for cross-listing. It was also delayed due to operational readiness of Abu Dhabi Securities Exchange and Tadawul.
Following the capital reduction in July 2022 and with the 2022 net profits, the company intends to revive the cross-listing process.
In February, Eshraq Investments announced net profits rose nearly 16 times to AED589.79 million ($160.6 million) in 2022, compared to AED38.42 million ($10.46 million) in 2021.
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