BANK South Pacific Ltd will buy back up to K40 million worth of its own shares, chairman Kostas Constantinou announced yesterday, The National reports.
The shares buy-back was agreed upon during the bank's capital management strategy discussion during its annual general meeting last month.
The buy back is set to open today for a period of 12 months.
The board of directors decided to buy back shares since BSP's current market share prices did not reflect the fundamental value of the company.
Constantinou said BSP intended to enter the market from time to time to purchase shares pursuant to the buy back, which under this, shareholders are invited to sell up to 10,000 BSP shares of each registered holding.
BSP would pay for any brokerage on shares bought back.
Selling shareholders would not pay brokerage.
At the release of the full-year profit results to Dec 31, 2010, Constantinou informed the market last March that "BSP had achieved sound results last year, characterised by continued profitability and balance sheet growth, demonstrating operational and financial stability".
The directors of BSP believed that a measure on market buy back of the company's own shares would complement the share consolidation that was effected early this month.
The shares consolidation allowed for shareholders to now receive one share for every 10 shares they previously owned, meaning BSP's share price will, in effect, be multiplied by 10 to maintain the value per share.
Shareholders would notice that the current selling price for BSP shares stood at K6.68 from K0.68, and where they had 1,000 shares, they now have 100 BSP shares.