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TOPGLOV (7113) TOP GLOVE CORP BHD  on course to buy back more shares

KUALA LUMPUR (Nov 12): Top Glove Corp Bhd said the maximum amount of funds to be allocated by the rubber glove manufacturer for its proposed renewal of share buy-back authority will be made wholly out of the company’s retained profit which stood at RM2.49 billion as at Aug 31, 2021.

In Top Glove’s share buy-back statement on Friday (Nov 12), managing director Datuk Lee Kim Meow said the renewal of share buy-back authority will be funded by Top Glove’s internally-generated funds and external borrowings.

Lee said Top Glove had proposed to seek authorisation from its shareholders for the renewal of authority "to purchase its own shares and/or hold as treasury shares representing up to 10% of the total number of issued shares” in Top Glove.

"A sum not exceeding the aggregate of our company’s retained profits at the time of purchase will be allocated for the proposed renewal of share buy-back authority. The amount of internally-generated funds and/or external borrowings to be utilised will only be determined later depending on, among others, the availability of internally-generated funds, the actual number of Top Glove shares to be purchased and other relevant cost factors.

"The actual number of Top Glove shares to be purchased and/or held and the timing of such purchases will depend on, among others, the market conditions and sentiments of the stock market as well as the retained profits and financial resources available to our company.

"If our company purchases the Top Glove shares using external borrowings, our board will ensure that our company has sufficient funds to repay the external borrowings and that the external borrowings will have no material effect on our cash flow,” Lee added.

Lee said that as at Oct 27, 2021, being the latest practicable date (LPD) prior to the printing of Top Glove's share buy-back statement, the company's number of issued shares stood at 8.21 billion which included 199.91 million treasury shares.

He said that as an illustration, the maximum number of Top Glove shares which may be purchased and held by Top Glove will not be more than 820.7 million based on the company's number of issued shares as at the LPD.

"Appropriate announcement(s) and notice(s) will be made to Bursa (Malaysia) and the relevant authorities in respect of our (Top Glove) board's decision on the treatment of the purchased shares in compliance with the Main LR (Main Market Listing Requirements of Bursa) and the Act (Malaysian Companies Act 2016).

"Our board may decide to cancel the purchased shares if the cancellation of the said shares is expected to enhance the EPS (earnings per share) of our group and thereby in the long term, have a positive impact on the market price of the shares. If our board decides to retain the purchased shares as treasury shares, it may distribute the treasury shares as share dividends to the shareholders and/or resell the purchased shares in accordance with the Main LR and utilise the proceeds for any feasible investment opportunity arising in future as working capital.

"While the purchased shares are held as treasury shares, the rights attached to them as to voting, dividends and participation in other distributions and otherwise are suspended, and the treasury shares shall not be taken into account in calculating the number of percentage of shares or a class of shares in our company for any purpose including substantial and major shareholding, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on resolution at a meeting of the shareholders," Lee said.

According to Lee, Top Glove purchased 152.29 million Top Glove shares in the 12 months up to Oct 27, 2021, being the LPD before the printing of the share buy-back statement.

As at Oct 27, 2021, Top Glove was holding 199.91 million Top Glove shares as treasury shares, he said.

He said that in the 12 months preceding the LPD, no treasury share was resold on the open market but 2.24 million treasury shares were transferred to employees under Top Glove's employees' share grant plan.

At Bursa's 12.30pm break on Friday, Top Glove's share price had risen 12 sen or 5.22% to RM2.42, valuing the group at about RM19.38 billion based on the company's estimated 8.01 billion issued shares excluding treasury shares.

Top Glove traded at between RM2.32 and RM2.52 so far in the day.


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