Mining engineering company DRA Global plans to delist from the Johannesburg and Australian stock exchanges and buy back shares from shareholders.
The delisting from the Australian Securities Exchange, where it has a primary listing, and the JSE, where it has a secondary listing, and the buyback will be put forward for shareholder approval at an extraordinary general meeting on November 7.
The delistings are considered by DRA's board to be in the best interests of the group in light of the low level of trading of its shares on the ASX and the JSE, it said in a statement on Wednesday.
The delistings are conditional on obtaining shareholder approval for the buyback, which will provide shareholders with the opportunity to realise some or all of their investment in DRA before delisting.
The group said given the size of DRA and the low level of trading of its shares, the board believes the financial, administrative and compliance obligations and costs associated with maintaining an ASX and JSE listing are no longer justified nor is the high level of compliance costs in the best interests of all shareholders.
A significant proportion of the company’s management time is being dedicated to time-intensive matters relating to its listing. If it delists, time will be able to be spent on other value-adding matters for the benefit of the company and its shareholders.
Subject to the buyback being approved by shareholders, DRA will proceed with an off-market equal access share buyback of up to 11-million shares, about 20% of the company's current issued capital.
The buyback price is A$2.08 or R24.55 per share, which represents a premium of 4.4% to the 30-day volume weighted average price of the shares traded on the ASX up to September 25. It also represents a premium of 11.13% to the 30-day volume weighted average price of the shares traded on the JSE up to that date.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.