Blue Label Telecoms, taking advantage of its low share price, has bought back almost 3.5% of the company’s issued share capital, it said on Monday.
On 2 November, Blue Label cancelled and delisted 32.9 million ordinary shares, it said.
It didn’t say what it paid for the buyback, but at Monday’s close of R5.53/share, the shares were worth R181.7-million.
The buyback comes after Blue Label’s shares tumbled by almost 70% since the beginning of the year on investor concern about the prospects of Cell C, in which it acquired a 45% stake last year for R5.5-billion.
“These shares were acquired as part of a general repurchase by the company in terms of the general authority to repurchase shares approved by the shareholders of the company at the annual general meeting held on 22 January 2018,” it said.
“The ordinary shares cancelled represent 3.47% of the issued capital of the company immediately prior to such cancellation. Following cancellation, the issued share capital of the company will now comprise 913.7 million ordinary no-par-value shares,” it said.
TechCentral reported last month that Blue Label Telecoms chairman Larry Nestadt had acquired millions of rand worth of shares in the company in the recent past as its stock price continued to plumb levels last seen a decade ago.
In his chairman’s report in Blue Label’s annual report, released last month, Nestadt said he and the board were “naturally concerned about the decline of the share price, which we believe is largely attributable to uncertainty with respect to Cell C’s turnaround strategy, current debt levels and requirements for further funding”.
“These concerns will be largely negated on the proviso that Cell C delivers on its business plan,” he wrote. “In this regard, it is our intention to monitor and assist on a diligent basis and to communicate the results thereof on a more detailed basis going forward.
“We trust that our improved Cell C disclosure will build greater confidence in support of our strategy to ensure positive cash-flow generation and in turn enhance the core business of Blue Label.” — (c) 2018 NewsCentral Media