Share Buy Back Scheme
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Share Buy Back Scheme

Credit Corporation (PNG) Limited (Credit Corp) has resolved to conduct an on market buy back of some of its shares.  Under the buy back, shareholders are invited to sell up to 5,000 of their shares to Credit Corp in the buy back. Set out below are the terms and conditions of the buy back and other information concerning the buy back.

1.1 WHAT IS A BUY BACK?

Under a buy back a company buys its own shares from its shareholders. Any shares bought back are cancelled, with the result that the number of shares on issue is reduced by the number of shares bought back.

1.2 WHY IS CREDIT CORP BUYING BACK ITS SHARES?

The buy back is being undertaken as part of Credit Corp’s capital management strategy designed to achieve a balance between returning capital, retaining sufficient flexibility to invest capital, pursuing growth options and maintaining strong credit metrics.

1.3 WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE BUY BACK?

The buy back is expected to marginally improve Earnings Per Share for shareholders who continue to hold Credit Corp shares. 

The advantages for individual shareholders of participating in the buy back may include:

  • Shareholders who choose to participate can tailor their participation to suit their own circumstances. In particular, you can choose:
    • Whether to sell your shares to the buy back
    • Whether to sell a portion of your shares to the buy back
  • Shareholders with small holdings are able to sell all of their shares to the buy back so as not to be left with a small parcel of shares.
  • Shareholders will not pay brokerage to sell their shares into the buy back.

The disadvantages for individual shareholders participating in the buy back may include:

  • You may be able to sell your shares at a higher price on the stock market at a later time.
  • There is no assurance that the buy back will be successful.

1.4 DO I HAVE TO PARTICIPATE IN THE BUY BACK?

No, participation is optional. If you do not want to sell any of your shares, you do not need to take any action.

If you do nothing, the number of shares you hold will not change as a result of the buy back, although your proportional shareholding in Credit Corp will increase slightly.

1.5 HOW MANY SHARES WILL CREDIT CORP BUY BACK?

Credit Corp intends to buy back up to K10 million worth of shares.  

1.6 HOW LONG WILL THE BUY BACK BE OPEN?

The buy back will be open from the opening date (Monday 19 September, 2016) for a period of 12 months. A report on the progress of the buy back will be released to the Port Moresby Stock Exchange on a weekly basis.

1.7 HOW MANY SHARES CAN I SELL?

Each registered shareholder can sell up to 5,000 shares into the buy back. Shareholders should seek advice from their financial advisor before they make a final decision to sell any of their shares in the buy back. 

1.8 HOW DO I SELL MY SHARES IF I ACCEPT THE BUY BACK?

Shareholders need to contact either;

BSP Capital Ltd
Phone +675 321 4333

Kina Securities Ltd
Phone +675 308 3825

Both BSP Capital and Kina Securities have been engaged by Credit Corp to buy shares in the buy back.  Credit Corp has agreed with each of them to pay a fee to them on each purchase by Credit Corp pursuant to the buy back and they have each agreed with Credit Corp that they will not charge any brokerage to any shareholder who sells their shares into the buy back.  

1.9 WHEN DO I GET PAID?

Credit Corp will pay your stockbroker for any shares bought back by Credit Corp on the date of sale.  You should check with your stockbroker about the time it will require to transfer these funds to you.  Stockbrokers usually settle with their clients within 7 days. Shareholders should make sure that their current address and banking details are up to date with their broker. 

1.10 CAN I PARTICIPATE IF I RESIDE OUTSIDE OF PAPUA NEW GUINEA?

Yes you may. The buy back is open to all shareholders registered as holders of Credit Corp shares. 

1.11 PARTICIPATION BY DIRECTORS AND SENIOR MANAGEMENT

Credit Corporation’s Directors and senior management involved in implementing the buy back will not be able to participate in the buy back.

The ‘Buy Back’ has again proven popular with shareholders with no brokerage or other fees being charged.