Savola Group, the largest food products company in Saudi Arabia, will buy back 1.2 million of its ordinary shares.
The repurchase, which will cover the new shares required for the company’s employee long-term incentive programme (LTIP), was approved during the extraordinary assembly meeting on Wednesday, a bourse filing to the Saudi Stock Exchange (Tadawul), said.
The assembly also approved the board of directors’ recommendation to distribute cash dividends worth 400.5 million riyals ($106.8 million), at 0.75 per share or 7.5 percent of the par value.
In its filing, Savola said the repurchase of shares will be funded through the company’s “internal resources”. These will then be retained as treasury shares and allocated for its employee incentive programme.
“[The shares will] be retained as treasury shares to cover the new shares required for the second and third tranches of the current approved Employees Long-term Incentive Programme ,” the filing said.
Savola’s net profit for the first three months of the year fell 10.9 percent to 153.8 million riyals on the back of lower sales and margins in the retail sector and higher operating expenses, among others.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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