To Improve Shareholder Value
Samsung Electronics announced on Nov. 30 that its board of directors has decided to retire treasury stock worth 4.87 trillion won (US$4.35 billion) in book value.
The company will retire 449.54 million ordinary shares (7 percent of the issued shares) and 87.42 million preferred shares (9 percent). These shares will be retired on Dec. 4.
While the retired shares are worth 4.87 trillion won in book value, their market value is 22 trillion won (US$19.6 billion) based on the closing prices on Nov. 29 (43,150 won for an ordinary share and 34,600 won for a preferred share).
In April last year, Samsung Electronics announced that it would retire its treasury stock on two separate occasions in order to raise shareholder value. It retired half of its treasury stock in May last year.
"We expect that the rise in the earnings per share (EPS) and the book value per share (BVPS) resulting from the stock retirement will enhance shareholder value,” a company official said, adding, “We will build a foundation for continuous growth by increasing competitiveness and continue our policy to enhance shareholder return."
Samsung Electronics invested a total of 33.5 trillion won to implement its shareholder return policy, including 12.9 trillion won in dividend payouts, from 2015 to last year. It also plans to spend 28.8 trillion won more from this year until 2020.