Adaro Energy (ADRO) Announces Up to IDR 4 Trillion Share Buyback

Jakarta,-PT Adaro Energy Indonesia Tbk (ADRO) plans to buy back shares for a maximum amount of IDR 4 trillion. ADRO will request approval for this corporate action at the Annual General Meeting of Shareholders (AGMS) on May 15, 2024.

If the ADRO share buyback agenda has been approved at the AGMS, the buyback will take place from May 16, 2024. 

In accordance with Financial Services Authority Regulation (POJK) 29/2023, the buyback of the Company's shares will be carried out in stages within a period of 12 months from approval by the AGMS.

So the ADRO share buyback period is scheduled to last for 12 months from May 16, 2024. Meanwhile, the announcement of the AGMS and share buyback plan was submitted on April 8, 2024. Meanwhile, the invitation for the AGMS to shareholders will be made on April 23, 2024.

The buyback of ADRO shares will be carried out through the Indonesian Stock Exchange (BEI) with the offer price to buy back shares lower than or equal to the previous transaction price, taking into account the applicable provisions.

ADRO's share buyback will be carried out in transactions on the IDX via the regular market. ADRO has also appointed a securities company to carry out share buybacks. ADRO management conveyed three considerations for carrying out share buybacks.

First, ADRO has the opportunity and flexibility to carry out share buybacks at any time based on market conditions, within a period of 12 months starting from the AGMS approval of the share buyback plan. 

Second, the share buyback plan is expected to increase ADRO share trading liquidity so that share prices are expected to reflect fundamental value.

Third, ADRO hopes that this share buyback will provide a good rate of return for shareholders and increase investor confidence, so that share prices can reflect ADRO's true fundamental condition. The source of funds that will be used for the share buyback will come entirely from ADRO's internal cash.

The use of funds for share buybacks will not significantly affect ADRO's financial capabilities. 

"The Company believes that the implementation of the share buyback will not have a negative impact on the Company's performance and income, because the profit balance and cash flow currently available are sufficient for the funding needs for the share buyback implementation," said ADRO management in an information disclosure, Monday (8/4).

If ADRO uses the maximum amount of the budget reserved for the share buyback, ADRO's total assets and equity will be reduced by a maximum of IDR 4 trillion. 

With its current solid financial position and performance, ADRO believes that the share buyback will not have a negative impact on ADRO's business activities and growth in the future.

The following is ADRO's pro forma earnings per share or Earnings per Shares (EPS) after the share buyback is carried out:

Total assets before the buyback were USD 10.42 billion, becoming USD 10.22 billion after the share buyback.

Current profit before the buyback was USD 1.85 billion, remaining at USD 1.85 billion after the share buyback.

Equity was USD 7.40 billion before the share buyback, becoming USD 7.15 billion after the share buyback. 

Basic earnings per share before the buyback was USD 0.05309, becoming USD 0.05608 after the share buyback.

This disclosure of information also states that ADRO will transfer shares from the share buyback results based on the provisions as regulated in POJK 29/2023. Prior to this, ADRO had also held share buybacks several times.

In 2021, ADRO carried out share buybacks in market conditions that fluctuate significantly based on POJK 2/POJK.04/2013. The share buyback period was carried out in four extension periods with the latest period being September 16, 2022 to December 16, 2022.

In that period, ADRO has repurchased shares amounting to 1 billion shares or 3.13% of all issued and fully paid capital. In 2023, ADRO will again carry out share buybacks from February 15, 2023 to May 15, 2023.

However, ADRO stopped the share buyback. In this period, ADRO has repurchased 68,247,100 shares or 0.21% of all issued and fully paid capital.

On May 11, 2023, ADRO received shareholder approval to carry out a share buyback based on POJK 30/2017. For this period, up to per

March 31, 2024, ADRO has carried out a share buyback of 159,048,200 shares or 0.50% of all issued and fully paid capital.

Thus, the number of shares repurchased by ADRO as of March 31, 2024 is 1,227,296,100 (1.22 billion) shares or 3.84% of the total issued and fully paid capital.

Before the long Idul Fitri holiday, ADRO's share price increased 0.37% to IDR 2,700 per share on Friday (5/4). If calculated from the beginning of 2024 (year to date), ADRO's share price has moved up 13.45%.

Sources : Apr 19.24

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