RFM Corp. milks treasury shares
The Concepcion family-controlled RFM Corp. milked P4 million more from its treasury sales after selling some of it in the open market at a price higher than its purchase price.
In a disclosure to the stock exchange, RFM said it sold 25 million common shares on March 11, 2016 for P4 per share, leaving it with just a little over 3.5 million of its treasury shares.
RFM’s board of directors informally agreed to the sale of over 28.5 million treasury shares. The sale of the 25 million treasury shares were through an ordinary cross-sale transaction and was not covered by a purchase agreement.
The average purchase price of the treasury shares were a little over P3.83 per share or at a profit of a little over 16 centavos a share for a total of P4.13 million.
RFM said it sold the shares for stability as a long-term investor wanted to buy them. Proceeds from the sale will be used to fund the company’s capital expenditure.
“The corporation intends to sell the authorized number of treasury shares as selling opportunity presents itself and up to the time when the total approved amount for sale is exhausted. The Corporation often gets queries from quality investors if there are shares that they can buy in substantial blocks. Management can seek Board authority for additional treasury shares to be sold if and when warranted,” RFM told the stock exchange.
The treasury shares were accumulated in less than three weeks.
RFM announced it was implementing a share buyback program on February 24, the same day it announced a cash dividend of P0.0779 per share for shareholders on record as of March 10.
For holding on to the shares until March 10, RFM earned an easy P2.2 million. The pay-out for the cash dividend is on March 23.
RFM’s windfall from its treasury shares is now at P6.3 million, representing profits from the sale of the shares and cash dividends. (Eileen A. Mencias)