Cosco sets P1-billion share buyback
MANILA, Philippines—Cosco Capital Inc., retailer Lucio Co’s holding company, is embarking on a P1-billion share buyback program, a move expected to boost share prices in the stock market.
In a disclosure to the Philippine Stock Exchange on Friday, Cosco said its board had authorized Co, chairman of the company’s board of directors, president Leonardo Dayao to execute the buyback in behalf of the company.
Companies typically buy back shares from the open market when they feel the shares are undervalued by the market. By reducing the number of outstanding shares, earnings per share increase. However, only companies with retained earnings are allowed to buy back shares.
In its disclosure, Cosco said it had also approved an external audit plan for 2015 alongside a P592-million cash dividend, broken down as follows: regular dividend of 6 centavos per share and a special dividend of 2 centavos per share for a total of 8 centavos.
Cosco’s flagship unit, Puregold Price Club Inc., also disclosed on Friday that its board had approved an external audit plan for 2015 alongside a cash dividend declaration worth a total of 30 centavos per share or P830 million. The cash dividend will consist of 20 centavos in regular dividend per share and a special dividend of 10 centavos per share.
Cosco, formerly Alcorn Gold Resources Corp., was originally incorporated on January 19, 1988, with the primary purpose of engaging in the exploration, development and production of oil and gas, and metallic and non-metallic reserves.
In 2000, the Securities and Exchange Commission approved the amendment of its primary purpose from an oil-and-mineral exploration and development corporation into a holding company. Today, Cosco’s portfolio consists of interests in retail, real estate, liquor distribution and mining.
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