The £500mln company said it is using some of its cash to reduce its share capital, thus boosting the share price, which it believes “does not accurately reflect the value of the company’s assets”.
“Genel has ongoing material cash generation from producing assets that more than funds our significant organic growth opportunities - with Sarta, Qara Dagh, Bina Bawi and Miran providing an attractive mix of near-term production and long-term growth potential,” read Tuesday’s statement.
“Organic growth from our existing portfolio has the potential to significantly increase production in coming years, and the ongoing cash generation led to the instigation of a material and sustainable dividend, as we look to provide investors with a compelling mix of growth and returns.”
Even after the buyback, Genel said it will have more than enough liquidity to further add to the strength of the portfolio, adding that it is “actively pursuing opportunities to do so”.
The plan is to re-purchase up to 27.92mln shares between today and Friday 5 July and hold those shares as treasury shares.
In a note to clients, analysts at City broker SPAngel said: “Can’t blame Genel for such action, share price has fallen over 20% in past couple months and seems efficient use of balance sheet.”
In afternoon trading, Genel shares were 5.4% higher at 186.60p.
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