Cargills (Ceylon) PLC and CT Holdings PLC have announced moves to re-purchase shares of the respective companies on a pro-rata basis up to a maximum of 5% within one year.
The companies said the resolution to this effect was passed by the respective Boards of Directors on Thursday, subject to shareholder and regulatory approval.
"The repurchase of shares will be executed solely at the discretion of the Boards of Directors at an appropriate time within the mentioned timeframe at a share price that is fair and reasonable," the companies said.
The justification for the move is that the Boards are of the view that the current share price does not reflect the value of the companies and growth prospects of underlying businesses, and therefore presents an opportunity for the companies to repurchase their own shares.
Cargills last traded at Rs. 182 whilst CT Holdings closed the week at Rs. 143.
They said that whilst the Boards of Directors view the current post-COVID environment and share price as being conducive to effect the repurchase, the continued recovery of business in Q1 and Q2 of FY21 would be considered prior to proceeding with the repurchase.
(FT)