Trustco Group Limited (Trustco) has announced the establishment of a share repurchase program to be executed during its closed period which commenced on 1 September 2023, under the buyback programme, Trustco or a subsidiary may repurchase up to N$197 million shares directly or N$98 million shares via a subsidiary, subject to Johannesburg Stock Exchange (JSE) listings requirements.
The Deputy Chief Executive Officer of Trustco Group Holding Quinton Van Rooyen said the group is constantly exploring strategies to boost shareholder value and has observed significant fluctuations in their share price, from a high 1600 cents per share in January 2019 to 24 cents per share in July 2023.
He revealed this last week in Windhoek, adding that while these shifts are influenced by external factors beyond its control, they are not standing idle and by initiating the share buyback programme, they are taking proactive steps to protect and create value for shareholders.
The repurchase program recognises the company’s strong balance sheet and cash flows to opportunistically acquire shares during periods of undervaluation.
“The program reinforces Trustco’s commitment to capital allocation and reflects confidence in the company’s underlying fundamental value. Trustco remains dedicated to pursuing strategies aimed at maximising long-term shareholder wealth, “said Van Rooyen.
The program will be implemented and maintained throughout the closed period ending around 30 November 2023, upon release of the company’s annual audited financial results.
He indicated that any share repurchases will adhere to the JSE Listings requirement and be conducted at up to 10 percent above the prior 5-day volume weighted average price of Trustco shares preceding each transaction, and a broker has been appointed to execute the buybacks.
Meanwhile, in its transformative step which is in its thirty-one-year journey, its founding shareholders, Quinton Van Rooyen and Next Capital (Pty) Ltd, an investment vehicle of the Van Rooyen Family, announced that it will convert a N$1.4 billion loan into ordinary Trustco shares.
The offer entails that Next Capital (pty) Ltd will have the option to convert its N$1.4 billion loan into N$1.50 billion new ordinary Trustco shares at a fixed price of N$1.41 per share.
“The loan will stop accruing interest from the date of shareholder approval. The conversion price and terms will not change regardless of Trustco’s share trading price or listing status, and should the entire loan be converted, Next Capital shareholding in Trustco will increase to 69.8 percent of issued shares,” he said.
Van Rooyen stated that the capitalisation offer demonstrates their founding shareholders’ confidence in their vision and strategy, as well as their support for their long-term growth plans.
“We appreciate their foresight in providing us with this opportunity to enhance shareholder value and pursue new opportunities in our markets. We have experienced significant fluctuations in our market capitalisation price which decreased from an all-time high of N$15.6 billion in January 2019 to a mere N$237 Million in July 2023.
Based on the current price of 50 cents per share, the capitalisation offer is priced at a substantial premium to the market price,” explained Van Rooyen.
The offer requires shareholder approval, as well as a fair opinion by an independent expert, in compliance with JSE Listings Requirements. The capitalisation is expected to have a positive impact on Trustco’s Net Asset Value.
Additionally, shareholders will also vote on increasing Trustco’s authorised share capital from 2.5 billion shares to 3.5 billion shares.