Etisalat plans $2bn buyback

Abu DHABI / Agencies

Etisalat, the biggest telecommunications company in the United Arab Emirates, is seeking to buy back stock valued at as much as $2 billion. The shares climbed.
The board of Emirates Telecommunications Group, also known as Etisalat, recommended purchasing up to five percent of the phone operator’s paid-up capital, or 434.8 million shares, the Abu Dhabi-based company said in a statement.
The buyback is intended for cancelling or reselling the shares, it said, without providing the terms.
Etisalat runs operations in countries ranging from Pakistan to Egypt. It has a market capitalisation of about AED151 billion ($41 billion), and based on closing share price the buyback will be valued at AED7.5 billion.
“This is an alternate way to reward shareholders if one doesn’t want to increase annual cash dividend,” said Nishit Lakhotia, head of research at Securities & Investment Co. “Etisalat’s consolidated cash and bank balances increased from AED23.7 billion in 2016 to AED27.1 billion in 2017, but the company maintained its annual dividend at 80 fils per share.”
The shares advanced as much as 4.1 percent, the most in more than year, in Abu Dhabi on Tuesday. They closed 2.6 percent higher, the biggest advance since December 28.
Etisalat’s brand value has grown over the year due to innovative customer service driven strategy, adapting well to digital savvy marketplace, leadership position on the 5G revolution and successful launch of global brand building initiatives.