TREATMENT OF THE SHARES PURCHASED The Bonia Shares purchased by the Company will be dealt with by the Board in accordance with Section 67A of the Companies Act, 1965 in the following manner:- (1) to cancel the Shares so purchased; (2) to retain the Shares so purchased as treasury shares for distribution as dividends to the shareholders of the Company and/or resell the Shares so purchased on BMSB in accordance with the relevant rules of BMSB; or (3) to retain part of the Shares so purchased as treasury shares and cancel the remainder. While the Shares so purchased are held as treasury shares, the rights attached to the Purchased Shares in relation to voting, dividends and participation in any other distributions or otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or a class of shares in the Company for any purposes including, without limitation to the generality of the provisions of any law or requirements of the Articles of Association of the Company or the listing rules of a stock exchange on substantial shareholdings, take-over, notices, the requisitioning of meetings, the quorum and the result of a vote on a resolution at a meeting of shareholders
RATIONALE FOR THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back, if implemented, will enable the Company to utilise its financial resources which are not immediately required for use, to purchase its own shares. It may help to stabilise the supply and demand and price of Bonia Shares traded on BMSB, thereby supporting the fundamental value of the Bonia Shares.
It is expected to increase the earnings per share of the Company in the event the purchased Bonia Shares are cancelled, which in turn is expected to benefit the shareholders of the Company.
Bonia will also have the opportunity to distribute the treasury shares as dividends, thus benefiting its shareholders. In addition, the treasury shares may also be resold on BMSB at a price higher than the purchase price, thereby realising a potential gain for the Company
POTENTIAL ADVANTAGES AND DISADVANTAGES OF THE PROPOSED SHARE BUY-BACK The Proposed Share Buy-Back will provide the Company with the opportunity to take pre-emptive measures if need be, to stabilise the supply and demand of Bonia Shares in the open market, thereby allowing the price of Bonia Shares to better reflect its fundamental value. The maintenance of the share price is important in order to maintain investors’ confidence to facilitate the Company’s future fund raising exercise via issues of equity shares, should there be any such exercises in future. In addition, the Proposed Share Buy-Back will also provide an opportunity for Bonia to make a gain when the Company resell the purchased Bonia Shares for cash when market conditions improve. The Proposed Share Buy-Back, if implemented, will however, reduce the financial resources of Bonia Group and may result in the Company foregoing any investment opportunities arising in the future or any interest income that may be derived from depositing such funds with interest bearing instruments. In view thereof, the Proposed Share Buy-Back will be implemented by the Board only after careful consideration of the financial resources of Bonia Group as well as the resultant impact on Bonia Group and the shareholders of the Company.
If the Shares so purchased are retained as treasury shares, the dividend rate will also be increased with the suspension of the rights attaching to the treasury shares as to dividend entitlement. Moreover, the treasury shares so purchased may be distributed as dividends to shareholders of the Company if the Company so decides.
share buy back is a common resolution in all AGM circular. It gives the company the power to do so if necessary but it doesn't mean that the power will be exercised.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Asia88
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Posted by Asia88 > 2015-10-28 23:22 | Report Abuse
Any door gift for this company?