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Securities and Commodities Authority (SCA), UAE’s stock market regulator, announcing the expiry of the share buyback period, said in a statement on the bourse web site: “Emaar bought only 200,000 shares, or 0.003 per cent of its capital.”
The news sent Emaar shares further down by 6.63 per cent to Dh2.25 on Wednesday on Dubai Financial Market, which briefly suspended share trading of the Dubai-based property developer behind several iconic projects including the world’s tallest tower, Burj Dubai, and the world’s largest shopping mall, the Dubai Mall.
Emaar, which has lost 85 per cent of its share value this year, had applied in September to buy back up to 10 per cent of its shares.
In an emailed statement, the developer said the period for exercising its rights under its previously announced share buyback programme has expired in line with “relevant regulations and the SCA’s notification posted on the Dubai Financial Market.”
Earlier this year, Emaar exercised its right to buyback a limited number of shares as part of this programme, the statement said.
“This was carried out in line with global best practice and was followed by timely disclosure of the same. Emaar’s activities related to the share buyback programme were carried out in the best interest of the company and its investors, and in line with current global financial conditions.”
In September, Emaar announced that it would proceed with the implementation of a share buyback programme in line with the approval by its Board of Directors and the SCA on December 25, 2007. It said the buyback would not be implemented before October 1, 2008, in line with SCA’s regulation that companies cannot execute any share repurchase 15 days prior to the closing of the financial quarter.
Emaar planned to repurchase shares on the open market at prevailing market prices, through block trades or otherwise “in a manner consistent with market conditions and the interests of its shareholders.” The plan was to fund the repurchases made under this programme from its available cash balance.
Mohamed Ali Alabbar, Chairman, Emaar Properties, announcing the buyback programme, had characterised the move as a significant investment in the company’s own growth and as an important enhancement to shareholder value.
“At Emaar, we firmly believe that there is no better investment we can make than in our own future. The decision taken by the Board of Directors to buy back Emaar shares reflects our firm belief that those shares are currently undervalued in the marketplace. We remain extremely confident of our ability to realise our strategic Vision 2010, while also continuing to generate increased shareholder value. We believe that today’s announcement, taken in the best interest of our shareholders and the company, will further support our global growth strategy,” he had said.
· issacjohn@khaleejtimes.com
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