Aspen Move Forward In Capital Buyback

by Stewart Douglas

Story link: Aspen Move Forward In Capital Buyback

Insurance group Aspen has today announced that it is to launch an aggressive share repurchasing scheme to secure $50 million of its ordinary share capital from the open market in order to strengthen its current position within the market and allow an increased retention of company profits over the medium term.

The move will see the company complete an overall $300 million strategy that he seen it buy off ordinary share capital from individual and corporate share holders in order to increase the concentration of voting rights for other ordinary shareholders, and centralise the management of the business.

The announcement today highlighted that the company had reached an agreement with investment and equity firm Goldman Sachs to fund the deal, which was struck several days ago in pursuit of its overall buy-back strategy.

The $50 million value roughly equates to around 2% of the company’s overall equity outstanding, determined on the closing share price on the 9th of November when the deal was announced, reflecting the size of the publicly traded organisation. Based on the same valuation, its overall buyback would equate to 12% of the company’s total issued ordinary share capital.
Speaking today on the announcement, Aspen chief financial officer Richard Houghton said that the company was devoted to effective capital management in order to provide enhance value for its shareholders whilst providing adequate capital resources to fund the business.

The move comes after a prolonged period of enhanced profit retention, which has been set aside for the last period in order to help facilitate the buyback strategy, with Goldman Sachs brought in to help fund the short term liquidity impact of the move.

The process will make each ordinary share still held more potent in terms of its dividend entitlement and attached voting right, which is designed to help improve conditions for remaining shareholders.