Astarta to consider 2% share buyback and 10% new share issuance

Astarta (AST PW) issued the agenda for its June 14 AGM and draft resolutions to be voted on at the meeting. The agenda includes approval of a share buyback in amount of 0.5 mln shares (or 2% of issued capital) to be completed at the market price but not exceeding PLN 125/share within 18 months. Another item is authorization for the right to issue new shares of up to 10% of the current share capital within one year of the AGM.

Yegor Samusenko: We believe Astarta’s board would only go through with a new share issue if market conditions improve – we do not believe the company will accept the current market price to issue shares. On the other hand, the right to buy back up to 2% of current share capital will help the company deal with temporary selling pressure on the stock should it appear. Given the company’s good corporate governance profile, we expect it to use the buyback right only to support the stock and not as a mechanism to inflate the share price.