World.Alpha-News.org ➤ The news of the world is here
Borouge Proposes Share Buyback Following Stock Slump Due to Merger Announcement

DUBAI, March 17 (Reuters) - Borouge, a petrochemicals company based in Abu Dhabi, announced on Monday its intention to procure approval from shareholders to repurchase up to 2.5% of its shares after a recent decline in its share price.

This decision follows the agreement between Borouge's majority shareholder, Abu Dhabi National Oil Company, and Austria's OMV to merge Borouge and Borealis, creating a chemical industry giant valued at $60 billion.

After reaching a peak of 2.66 dirhams on March 4, Borouge's shares tumbled to a record low of 2.3 dirhams on March 11 but rebounded to 2.46 dirhams by 0900 GMT on Monday.

In a statement, Borouge expressed confidence in its future growth and commitment to providing attractive returns to its shareholders through various means with the proposed share buyback.

Majority-owned by ADNOC (54%) and Borealis (36%), Borouge has 10% publicly traded on the Abu Dhabi Securities Exchange (ADX). Shareholders will vote on the buyback proposal and a dividend distribution of $1.3 billion for 2024 at the annual general meeting scheduled for April 7, given Borouge's net profit of $1.24 billion in the previous year.

The buyback plan, capped at 2.5% of shares, will be implemented through market transactions on ADX, subject to market conditions and other variables. Post-merger, existing Borouge shareholders are expected to be offered an exchange for shares in the merged entity, Borouge Group International.

(1 USD = 3.6723 UAE dirham)