Sampoerna proposes Rp 625b buyback

Sampoerna proposes Rp 625b buyback

PT HM Sampoerna, Indonesia's second-largest cigarette maker, plans to buy back its own shares on the market with a value of up to Rp 625 billion (US$75.5 million), the company's third buyback since 2001.

Sampoerna will hold a shareholders' meeting on June 27 to get approval for the plan.

"The funds for the share buyback are from excess cash derived from the company's net profit," the company said.

The amount set aside would buy back about 3.7 percent of the company's total outstanding shares at current stock prices.

Sampoerna bought back 2 percent of its shares last year and 3 percent the previous year. The latest buyback will be done within 18 months after the plan is approved, the company said.

Shares of Sampoerna have gained 3.4 percent this year, lagging behind the benchmark Jakarta Stock Index, which has risen 17 percent.

In December, Sampoerna had its foreign currency credit rating raised to B from B- by Standard & Poor's Corp. The rating upgrade affects $65.9 million in notes. -- Bloomberg