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GKP has categorically stated its opinion that, in its view:-
‘the Board believes that GKP’s current share price trades at a significant discount to the intrinsic value of the Shaikan Field and does not adequately reflect the near-term free cash flow generation from local sales’.
Hence the launch of the $10m buyback programme for CANCELLATION.
Then:-
‘The Company expects to propose the renewal of the shareholder authority to carry out on-market purchases at the 2024 AGM so that this option remains available to the Board as part of the future overall shareholder return strategy.’
Key phrase here is that the renewal authority is that ‘this option remains available to the Board as part of the future overall shareholder return strategy’…
The Board are asking for permission to buyback up to 10% of GKP’s Common shares representing 22,269,865 shares as @ 14/5.
These new authorities to purchase have an expiry date at the end of the next AGM in 2025, and will be executed as the Board sees fit during that period.
So far so good.
But, 9 b (iii) is contentious: -
‘and such authority shall expire (unless otherwise renewed, varied or revoked by the Company in a general meeting) at the conclusion of the AGM of the Company in 2025 except that the Company may at any time prior to the expiry of such authority make a contract or contracts to purchase Common Shares which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of Common Shares in pursuance of any such contract or contracts and may hold as Treasury Shares any Common Shares purchased pursuant to the authority conferred in this resolution.’
Why is this contentious?
Because of the reference to ‘Treasury Shares’.
More importantly, no reference to cancellation of Common Shares purchased under the scheme.
Unlike the latest buyback activity, which is for cancellation, there is no reference as to how the Board intend to treat the next wave of buybacks.
Nothing about any intention to cancel.
The only reference is to Treasury buybacks of what might amount to another 22m shares
‘in such a manner as the Directors shall from time to time determine’.
Is Jaap Huijskes back?
Are GKP going to load up their Treasury war chest with employee retention bonus shares which will be released back to staff for simply sticking around, and/or on the basis of spurious targets?
Because if that is the plan then we can forget any significant share price buyback benefits after the current $10m spend. Those shares will almost certainly reappear on the market in the form of staff incentives.
The Board could at least specify how many Treasury shares they think might be needed to cover retention issues for the Snowflakes.
Otherwise people like me will be deeply suspicious...
We’ll see tomorrow.
"Those shares will almost certainly reappear on the market in the form of staff incentives."
Those shares will certainly appear on the market in the form of saff incentives, regardless whether there are treasury shares or not.
Best Regards ValueS
You got it Scat and VS: watch how they will achieve this tomorrow……
Neat trick: use our working capital to buy our shares, then use same to award themselves for achieving nought:
No growth No new wells No updated equipment No recovery of our debts.
Learning will be - who among us shareholders will vote this through !?
That's a given and shareholders vote this in Ffs.
Let's see how Market sees it ?? Can see a 10% drop on the back off it aswell.
Looking forward to seeing my questions hopefully answered tomorrow morning along with everyone else's.
Belgrano you asked about the pipeline contract ending?
Agree with you.
If you want add value for shareholders when doing buybacks, you CANCEL the shares. I sincerely hope that the first tranche of buybacks for CANCELLATION was not a Trojan Horse, to get shareholder agreement on further tranches going to TREASURY.....
That is exactly my point…just wish I’d expressed it as succinctly as you!!
Because if those shares go back to Treasury then they are dormant but still active.
And can be re-activated at any time.
22m share buyback, which is what is proposed under Resolution 9 MUST be for CANCELLATION.
Or we need a credible explanation as to why retention, a.k.a. rewarding employees just for sticking around, is the need. And how much money might be needed for that retention exercise.
Btw, you don’t buy staff loyalty by bribing them.
You do it by them buying into the GKP proposition and the future of the business model.
As shareholders we’ve all invested in GKP’s future. And we’ve paid enough over time for that particular pleasure.
If that future is at risk unless we dampen down that risk by reference to retention of staff via hoarding shares in Treasury, then we should have some rationale.
We deserve nothing more, nothing less. Particularly serious LTHs who are (rightly) cynical.
Including the Institutions.
Clarification is now King.
I doubt we’ll get it.
It won’t happen because the Board want to keep their options open.
But it will lead to deeper shareholder concerns as to real the motive for the next phase of the buyback momentum.
What happened to JH’s new world of openness and transparency?
We’ll see today…