5E Resources says the 100,000 shares it had bought back on Nov 17 had exceeded the 5% cap of the average of the closing market price over the last five consecutive active trading days for such share buybacks of 24.68 cents per share. The difference is 0.57 cents per share or 2.31%.
The buyback on Nov 17 saw the company paying 25.25 cents per share or $25,397.64 in total.
“Whilst the company had tried to rectify this with its broker, however, the share buyback had already completed and could not be invalidated. The 100,000 shares bought constituted 0.07% of the company’s total issued share capital of 147,474,784 shares,” says 5E Resources NLC .
The error came about from an “erroneous calculation” of the maximum purchase price where the average of the closing market price over the last five consecutive days was used, instead of the average of the closing market price over the last five consecutive active trading days.
The error led the company to breach Rule 869 of the Singapore Exchange S68 ’s (SGX) Catalist listing rules.
“In light of the above, the management will strengthen and update its current internal policy and procedures to ensure that the accuracy of the maximum purchase price before undertaking any further share buyback transactions in the future, by including the computation of the maximum purchase price based on the correct definition. The board (including the audit and risk committee) will oversee the implementation process,” adds the company.
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Shares in 5E Resources closed 1 cent higher or 4.08% up at 25.5 cents on Nov 17.
