Buyback Of PALM Shares, Provident Agro Owned By Conglomerate Edwin Soeryadjaya And Sandiaga Uno Prepare Funds Of IDR 78.4 Billion

Illustration. (Photo: Doc. Antara)

JAKARTA - Oil palm plantation owner and palm oil processor PT Provident Agro Tbk (PALM) is preparing to hold a share buyback action. The plan will last no later than the next 18 months.

As stated in the announcement made by the company, Thursday, February 10. The joint venture of conglomerates Edwin Soeryadjaya and Sandiaga Uno has prepared Rp78.41 billion in funds to realize the action.

The number of shares to be purchased is 110 million or equivalent to 1.55 percent of the total issued and fully paid capital in the company.

"The purchase is carried out in stages since it was approved by the general meeting of shareholders (GMS)," wrote Provident Agro's management.

The company estimates that the buyback will take place from March 22 to September 22, 2023 and/or other dates determined by the AGMS with due observance of the applicable laws and regulations.

Provident Agro's management added that the implementation of the share buyback is one of the company's efforts to increase shareholder value and PALM's share performance. So that it will provide great flexibility to the company in managing capital to achieve an efficient capital structure.

To expedite this action, the company has appointed PT Indo Premier Sekuritas.

On the other hand, management realizes that the implementation of share buybacks will reduce the company's assets and equity.

However, the company believes that the buyback will not result in a decrease in revenue and will not have a material negative impact on business activities, considering that the company has adequate working capital and cash flow to carry out transaction financing in conjunction with business activities.

For information, throughout this year until Thursday, February 10, PALM's share price continued to decline. It is noted that PALM shares have fallen by 20.69 percent from Rp. 870 at the end of 2021 to Rp. 690.