Diversified conglomerate PT MNC Investama, better known as MNC Corp., plans to buy back up to 10 percent of its public shares for a maximum value of Rp 1.52 trillion (US$112.81 million) to avoid further losses in stock prices amid volatility in the stock market.
The firm announced in a disclosure submitted to the Indonesia Stock Exchange (IDX) on Thursday that it would buy back as much as 10 percent of its stake for a maximum 3.78 billion shares at a price of around Rp 400.
"The buyback is set to be carried out within 18 months from the time the company is expected to obtain approval from an extraordinary shareholders meeting," the announcement stated.
The shareholders meeting will take place on July 27.
MNC Investama, which is controlled by tycoon Hary Tanoesoedibjo, will keep the bought shares as treasury stock that can be used to reissue the stock on the market at a later time when conditions improve, repay loans in the form of equity or become an investment exchange tool in the future.
According its profile on the IDX, MNC Investama is 36.2 percent owned by HT Investment Development, 14.64 percent by UOB Kay Hian and 28.55 percent by the investing public — among others.
MNC Investama has a number of subsidiaries, namely media giant Global Mediacom, finance firm MNC Kapital Indonesia, energy firm MNC Energi and transport company Global Transport Services.
Hary, who is also Media Investama group president & CEO, said previously that the buyback option was aimed at being a short-term investment strategy amid fluctuation in the stock market.
The firm, listed on the bourse as BHIT, saw a 19.7 percent slump in its share price in a year-on-year (yoy) basis from Rp 365 on July 24 to Rp 293 at Friday's close, according to Bloomberg data.
The shares' year-to-date (ytd) return, meanwhile, increased 2.85 percent with market capitalization at Rp11.4 trillion, the data has shown.
The Jakarta Composite Index (JCI) has dropped 6 percent ytd from a level of around Rp 5,200 to its current level of around Rp 4,900.
The plunge is in line with the country's slowing economic growth that hit its lowest since 2009 to a level of 4.7 percent in the January-March period this year, the result of weakening consumer spending and less business expansion.
Besides planning to buy back shares in MNC Investama, Hary plans to buy back up to 5 percent of the paid-up capital of MNC Investama subsidiary MNC Sky Vision, worth around 353.19 million shares at a maximum value of Rp. 619 billion.
Shares of MNC Sky Vision, which are traded on the bourse under the code MSKY, dropped 28.6 percent yoy to a level of Rp 1,400 at Friday's close from Rp 1,960.
The share return so far this year hit minus 12.5 percent, with market capitalization standing at Rp 9.85 trillion.