Fruitas sizzles on P100-M buyback
Shares of Fruitas Holdings Inc. surged by 11.67 percent on Tuesday as a P100-million share buyback program showed confidence in company value amid the recent thin trading in the local bourse.
In a disclosure on Tuesday, the food and beverage kiosk operator said that it could repurchase as much as 163.93 million shares for P0.61 each. The pricing is based on the closing as of Jan. 31.
Shares of Fruitas closed at P0.67 on Tuesday, giving it a market capitalization of P1.28 billion.
The buyback of shares will be settled with internal funding. It will have an initial term of one year upon approval by the board of directors but it can be extended.
Its public float stood at 40.75 percent as of Dec. 31, 2024. It will go down to 35.81 percent after the share buyback.
“The objectives of the share buyback program are to enhance shareholder value and to manifest confidence in the company’s value and prospects through the repurchase of the common shares of the company and through the return of a portion of the company’s capital to its shareholders,” Fruitas said.
Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., told the Inquirer it was a “good step to shore up shareholder value and demonstrate confidence in the company’s prospects.”
“Given the relatively thin trading in the stock, the buyback program could potentially boost the share price,” he added.
The Philippine Stock Exchange Index has suffered some sell-off recently as investors worry over the Trump presidency’s impact on the global economy.
“Many companies have been buying back in this market, sending a signal that their stock has been unfairly sold down,” added Luis Gerardo Limlingan, head of sales at stock brokerage house Regina Capital Development.
Buying back shares reduces the number of outstanding shares, increasing the return on future dividends and share prices.
