JAKARTA (TheInsiderStories) – PT Matahari Departement Store Tbk (IDX: LPPF) will buyback shares that have been issued by the company and are listed on the Indonesia Stock Exchange (IDX). The total value prepared for the buyback and additional buyback is US$100 million or Rp1.4 trillion.
Based on information disclosure from the IDX, the share buyback to be carried out by LPPF is 10 percent of the total paid-up capital or a maximum of 291 billion shares.
The limitation of the maximum buyback price is Rp13,330 per share so that the total cost of the initial share buy-back and additional shares is a maximum of Rp1.4 trillion, including the cost of the broker and other costs.
The buyback carried out by LPPF consisted of an initial buyback of 7 percent of the paid up capital and placed by the company or a maximum of 204 billion shares. The cost to be spent on the implementation of the initial share buyback is a maximum of Rp1.25 trillion.
Then an additional buyback of as much as 3 percent of the paid up capital and placed by the company or a maximum of 87 billion shares. Realization will be carried out no later than 18 months after obtaining approval from the general meeting of shareholders on April 26, 2019.
Meanwhile, the aim of LPPF to buyback is to increase shareholder value and stock performance so that it will provide capital management flexibility to achieve a more efficient capital structure.
In this case, the company plans to withdraw the shares that have been repurchased and subsequently plans to reduce the paid-up and placed capital of the company. The company believes that there is no significant impact on the cost of share buybacks to decrease revenue.
With the buyback, the company expected giving a positive impact on the company’s stock price. The performance of the company’s net income per share as of Dec. 31, 2018 is Rp377 per shares, while the performance of net income per share if the buyback is carried out is Rp418 per shares.
Throughout 2018, the company’s net profit contracted by 42 percent to Rp1.1 trillion, from the previous Rp1.91 trillion in 2017.The decline occurred due to a decrease in the investment value of Rp769.77 billion caused by the merger between MatahariMall.com and Matahari.com.
In addition, the company also booked revenues that edged up 2 percent to Rp10.25 trillion, from the previous Rp10.02 trillion in 2017.However, the company hopes the performance of this year can be better because the company has pocketed exclusive selling rights for Italian clothing brands, OVS. In Italy alone, OVS has a market share of 5 percent.
In total, OVS has 561 stores spread across Europe, Latin America and Asia. In 2018, OVS managed to record sales of €1.53 billion worldwide.
Matahari also plans to open one until three stand-alone outlets for the OVS brand in Indonesia. In addition, OVS products will also be placed in 30 Matahari Department Store outlets in the first semester of 2019, followed by the addition of 10 outlets in second quarter of 2019.
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