FINTECH company Silverlake Axis 5CP is offering to buy back up to 242.4 million shares - representing around 9.1 per cent of the total number of its shares in issue - at S$0.33 each in cash, as part of an off-market equal access offer.
The buyback will enhance shareholders' value as it reduces the number of shares in circulation, hence raising the earnings per share of the company, it said in a bourse filing on Monday (Mar 14).
The offer also provides shareholders "an opportunity to realise their investments in the shares at a premium over recent market prices of the shares without incurring transaction costs", it added.
The offer price of S$0.33 per share represents a 17.9 per cent premium to its last transacted price of S$0.28 on Mar 11, being the latest date on which the shares were traded prior to the release of the announcement.
It is also a 13.8 per cent premium to the volume-weighted average price of S$0.29 for the 1-month period up to Mar 11.
The offer is part of the company's existing share purchase mandate approved and adopted at its annual general meeting held in October 2021.
Silverlake Axis is committing S$80 million towards the share purchase, which it will fund using internal resources and/or external borrowings.
It does not expect the offer will result in a material adverse effect on the working capital requirements or the gearing levels of the company, or result in the company being delisted.
The purchased shares under the offer will be cancelled or held by the company as treasury shares, or partly cancelled and partly kept as treasury shares, it said.
The company also noted that its substantial shareholder, Zezz FundQ, is not participating in the offer. Zezz FundQ, which owns around 68.6 per cent of Silverlake Axis, is wholly-owned by the company's executive director and group executive chairman Goh Peng Ooi.
As such, participating shareholders are entitled to tender for an additional 166.2 million shares for acceptance under the offer.
Details of the offer, including the offer period, will be provided in the offer letter, which will be dispatched in due course, the company said.
Shares of Silverlake Axis closed up S$0.005 or 1.8 per cent at S$0.28 on Friday.