Hot stock: Seatrium up 5.6% on S$100 million share buyback programme

SEATRIUM’S shares rose 5.6 per cent amid heavy trading after announcing its plan to buy back up to a maximum of 2 per cent of its total issued shares under a S$100 million share buyback programme on Monday (Apr 29).

As at 10.18 am, the counter was up S$0.005 at S$0.094, the top traded by volume on the Singapore Exchange with 363.4 million shares changing hands.

Seatrium noted that depending on the prices at which the shares are repurchased on the open market, the programme could take more than a year to be completed.

“Funded out of existing cash, shares repurchased will be held as treasury shares which will in turn be deployed for the group’s existing employee share plans, used to pay the share component of the directors’ fees, or cancelled against the group’s share capital to increase shareholder returns,” said the offshore and marine giant.

It also noted that given the group’s improved financial position and capital requirements for future growth, the programme provides for a systematic approach to further align its interest with shareholders.

The share buyback programme will be undertaken pursuant to the share purchase mandate which was approved by shareholders at the Apr 26 annual general meeting (AGM).

Separately, during midday market break, the company announced that each shareholder will receive one consolidated share for every 20 existing shares held prior to the share consolidation on record date of May 8.

This came after the proposed share consolidation was approved at the AGM.

The company noted that the number of consolidated shares will be rounded down to the nearest whole unit. Any fractions of a consolidated share will be disregarded and sold in the open market upon the consolidation scheme. Proceeds arising from such sale will be distributed on a pro rata basis to the eligible fractional entitlement holders.

Shares of Seatrium closed Friday up 1.1 per cent, or S$0.001, at S$0.089.