Singapore property developer Overseas Union Enterprise (OUE) has announced that it will be proposing a share purchase mandate to enable it to acquire its issued shares, in response to questions from investors wanting to know whether it has such a mandate.
Firms use share buybacks for different reasons, including providing a cushion against market volatility, improving returns on equity to raise shareholders’ value and returning excess cash to shareholders. It is also typically interpreted as an indication of confidence in the company.
According to a report by The Business Times, OUE said its circular will provide more details. The proposed mandate comes after Lippo Group, OUE’s controlling shareholder, said it will unwind a derivative transaction that has caused market confusion and created overhang on OUE’s share price.
OUE, on the other hand, said the planned mandate was not related to Lippo Group’s announcement.
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