During the Extraordinary General Meeting of Shareholders of Ignitis Group, the acquisition of 1.24 million of own shares has been approved
- During the Extraordinary General Meeting of Shareholders of Ignitis Group, the acquisition of 1.24 million of own shares for the maximum sum of EUR 23 million has been approved;
- Acquisition of own shares will be organised through Nasdaq Vilnius tender auction platform;
- The price margin of shares to be acquired is between EUR 18.5 and EUR 22.5, and a specific price will be approved by the Management Board of Ignitis Group;
- The acquired shares will be annulled, thus reducing the share capital and increasing the dividend amount per share.
During the Extraordinary General Meeting of Shareholders (GMS) of the international energy company Ignitis Group, which occurred on 29 July, considering the stabilization performed after the company’s IPO, in order to maintain the market price, the resolution was approved to acquire 1.24 million of own shares.
The acquired own shares of the company, which represent up to approximately 1.7% of total number of shares, will be annulled, thus reducing the share capital of the company. It will benefit both the principal shareholder of Ignitis Group – the State – as well as minority shareholders because by annulling the acquired shares, dividend amount per share will increase.
“Acquisition of own shares, related to the stabilization performed after the IPO, is still a new practice in the Baltic states and is probably not familiar to all investors. It is a common practice in international capital markets, when stabilized securities are usually disposed to the company directly, however, such alternative is not possible in Lithuania. So, the approval of the shareholders to the proposal to acquire own shares is positive news for investors because it will increase the returns per share as well as to the company, which will make profit”, says Jonas Rimavičius, Head of Group Finance and Investment at Ignitis Group.
The resolution was approved by the General Meeting of Shareholders on the acquisition of own shares for the price between EUR 18.5 and EUR 22.5. A reserve of EUR 23 million formed for the acquisition of own shares, which was formed under the approval of the shareholders of 25 March, will be used. The specific price of acquisition of own shares, including other details of the implementation, will have to be approved by the Management Board of the company. The company will inform about the adopted decisions according to the procedure set out in the legal acts.
Ignitis Group shares will be acquired through Nasdaq Vilnius tender auction platform. Investors trading global depositary receipts at the London Stock Exchange will have an opportunity to participate by converting owned global depositary receipts into shares and submitting an offer through Nasdaq Vilnius stock exchange. The company will implement the acquisition of own shares in the nearest future (maximum period for buy-back provided under law is 18 months).
In the first month of listing Ignitis Group securities in the securities market, a share price stabilisation was performed according to international practices. It means that Swedbank could have acquired no more than 10% of newly issued shares of Ignitis Group during the period between 7 October and 5 November 2020. During this period, the stabilizers acquired 631,938 units of shares listed in Nasdaq Vilnius and 1,368,061 units of global depositary receipts representing the shares listed in London Stock Exchange which amounts to 10% of Ignitis Group shares.
On 7 July Ignitis Group and Swedbank extended the agreement to 1 July 2022, according to which the bank shall not have the right to dispose of securities acquired during the stabilisation period at its own will, which means that until the end of the period, unless different agreement with the company is reached, Swedbank will not be able to dispose shares unilaterally, but will have a right to participate in the Ignitis Group’s acquisition of own shares together with other investors.
Considering the good international practices, GMS has also approved a new wording of the Articles of Association of the company. The procedure for forming the Audit Committee of Ignitis Group has been amended by providing that members of this committee would be selected not by the Supervisory Board of the Company, but by the resolution of the General Meeting of Shareholders and would also be accountable to the General Meeting of Shareholders. Also, in the Lithuanian version of the new wording of the Articles of Association, the title of the role of Chief Executive Officer has been changed.