Novatek buys back 0.08% of its shares for 840 mln rubles
MOSCOW. Jan 17 (Interfax) - Novatek bought back 2,476,250 shares, including Global Depositary Receipts (GDRs), on the open market in the period March 11-14, the gas company said in a statement.
Novatek's shares averaged at 339.34 rubles a share in the period, so the company might have spent 840.3 million rubles on the 0.08%.
The company says that as of March 17 it had bought back 9.3 million shares, some of them in the form of GDRs, or approximately 0.3% of issued shares. At current market prices this is worth 2.9 billion rubles. At the same time Novatek Equity, an entity set up to repurchase the shares, had just over 11 million shares, some of which were bought in the framework of an options program, on its books as of Monday. These shares are worth around 3.4 billion rubles at current prices.
"We have resumed our share buyback program by purchasing our shares on the open market as the current share price significantly diverges from the intrinsic value of the company. We continue to deliver significant shareholder value through the successful execution of our corporate strategy and the timely delivery of our core projects. The recent sell-off is not linked to the strong underlying fundamentals of the company, nor does it properly reflect, in our opinion, the growth of our hydrocarbon output and the free cash flow generation of our business. Therefore, we felt it was prudent to resume our share buyback program to support our share price and market value, and provide our firm commitment to deliver the enormous growth potential of Novatek," Leonid Mikhelson, CEO, was quoted as saying.
Novatek's board of directors approved a share and GDR buyback program worth $600 million in June 2012, and the company kicked off the program on November 16 that year. The company extended the program first until June 7, 2013 and then until June 7, 2014.
Novatek's market cap peaked at $49.2 billion or $162 per GDR in August 2011. The company was worth $41 billion by the end of last year and, following some heavy losses on the Russian stock market, it is now worth closer to $30 billion. The GDR fell below the $100-mark on March 14 to $9.8 each.