HONG KONG, July 24, 2015 /PRNewswire/ -- Evergrande Real Estate (HK.3333) announced on July 24 that it would hold an extraordinary general meeting regarding the application for authorization of a further increase of buy-back equal to 10% of its share capital. Industry insiders believe that after a series of buy-back efforts this year, this move of Evergrande shows that it might continue to buy back its shares, for the purpose of fighting against malicious short selling, and stabilizing investor confidence.
The announcement shows that at the annual general meeting held on June 12, Evergrande Real Estate authorized, via a resolution, the directors of the company to buy back no more than 10% of its total share capital with a value of 15.6 billion yuan, i.e. more than 1.5 billion shares. As at July 24, the company has bought back a total of more than 637 million shares. Without any additional buy-back authorization, Evergrande can still buy back a maximum of 59.28% of the original buy-back authorization, i.e. 928 million shares. If this further increase of buy-back authorization equal to 10% of the share capital is successful, the potential for Evergrande's buy-back in the future will be much greater.
The announcement also reveals that in view of the extent to which the existing buy-back authorization is used, and in order to maintain the flexibility with which the directors can buy back shares on the market when necessary, Evergrande will hold an extraordinary general meeting regarding the application for an increase in the share buy-back authorization equal to 10% of the total share capital issued on the date of the extraordinary general meeting.
Securities professionals pointed out that international short selling institutions have been trying to short sell the stock of leading companies such as Evergrande, which has large share capital, great share price potential and a high circulation rate. The announcement of Evergrande regarding the application for new buy-back authorization significantly increases its future buy-back potential, and shows its determination to fight against malicious short selling, and eliminate all possible opportunities for the short selling institutions.
