South Korea’s leading biosimilar drug developer Celltrion Inc. announced on Friday a plan to cancel $140 million worth of treasury shares as part of its efforts to improve shareholder value, raising its stock price.
Celltrion said its board of directors decided to cancel 1.1 million shares, equivalent to 0.5% of its outstanding shares and 11% of its treasury stocks, on March 25. These are worth 203.3 billion won ($139.8 million), based on Celltrion’s closing price on Thursday.
The cancellation is poised to reduce Celltrion’s outstanding shares to 13 million from the current 14.1 million. The company plans to retire all treasury shares it plans to buy this year.
“Celltrion aims to raise sales to 5 trillion this year after reporting a record high revenue of 3.5 trillion won last year since its foundation to accelerate growth,” said a company official.
“We will do our utmost to expand shareholder return policies to keep pace with the company’s rapid growth and continue to grow together with shareholders while increasing corporate value to become a global Big Pharma.”
After the cancellation announcement, Celltrion’s share ended up 0.8% at 186,100 won on Friday, outperforming a 0.3% fall in the benchmark Kospi. The stock has risen as much as 2.2% to 188,700 won, the highest since March 6.
SHAREHOLDER RETURN
Celltrion decided to buy back about 100 billion won in shares in February on top of repurchases of 436 billion won last year to prop up its share price.
The company completed the cancellation of 3.0 million shares, equivalent to 1.4% of its outstanding shares and 25% of its treasury stock in January. These were worth 553.3 billion won.
Celltrion is set to pay the largest cash and stock dividends after approval at the annual general meeting on March 25.
It plans to provide 750 won in cash per ordinary share, totaling 153.8 billion won, and 0.05 share per common stock, totaling 10.3 million shares.
By Dae-Kyu Ahn
powerzanic@hankyung.com
Jongwoo Cheon edited this article.
