Eshraq shareholders approve stock buyback, dual listing on Tadawul

Logo of Eshraq Investments Co.

Eshraq Investments Co.'s shareholders approved today, May 1, repurchasing an additional 7% of the company’s shares under its share buyback program for up to AED 110 million. 

The buyback comes on the back of shareholders' request during the annual general meeting held on April 28, where they recommended increasing the distribution for shareholders via an increased share buyback program and replacing cash dividend. 

During the meeting, shareholders approved the board's recommendation on paying cash dividend for 2022 at two fils a share minimum. They proposed doubling the dividend to four fils a share (AED 110 million), to be used exclusively in the stock buyback instead of the dividend payout at two fils a share.    

The buyback will capitalize on the current share price discount compared to the company’s book value. 

Eshraq holds 93.06 million treasury shares. As part of the company’s current buyback program, Eshraq has bought back nearly 70.5 million shares since August 2022 at an average price of AED 0.4977, generating a book value gain of AED 32.73 million for its shareholders.  

The increased share buyback is expected to enhance shareholder value on account of the acquisition at a discount to Eshraq’s book value. 

During the meeting, shareholders also approved the renewal of the company's plans to dual list on the Saudi Exchange (Tadawul). 

The company indicated that it failed previously to implement the dual listing due to its accumulated losses, which are not in line with Tadawul standards.  

The dual-listing delay was due to the operational preparations for Abu Dhabi Securities Exchange (ADX) and Tadawul, the company said, adding that after the capital reduction in July 2022 and recording net earnings in the same year, it plans to renew the dual-listing decision.   

On March 21, Eshraq’s board of directors approved the proposed dual listing of a part of the company's shares on Tadawul, according to data available with Argaam.