The Resimac Group Ltd (ASX: RMC) share price is racing higher today, up 13.15% at time of writing to $1.85 per share.
But that price doesn't appear to please the Board of the non-bank lending company.
Below, we take a look at the details of the Board's share buyback plans.
Image source: Getty Images
What are the Board's share buyback intentions?
The Resimac share price is off to the races after the company reported it will undertake an on-market share buyback.
Why?
According to the release, "The Board considers that the company's current share price does not accurately reflect the underlying value of the company's assets and the share buy-back represents an opportunity to add value to the remaining shares on issue."
Resimac said it plans to start its share buybacks on 29 December and continue for up to 12 months. It will instruct Bell Potter Securities, its broker, to buy shares "only where the position maximises the benefits of the share buy-back to the company".
Of the 408.79 million ordinary shares outstanding, Resimac intends to buy back a maximum of 40.8 million, or 10%.
The shares will be bought back for a cash consideration in Aussie dollars. But the price to be paid remains to be determined.
The buyback does not require shareholder approval to move forward.
Resimac instructed its shareholders that it cannot guarantee it will acquire all, or indeed any, of the shares under its announced buyback program.
Resimac share price and company snapshot
Despite a strong showing in intraday trade today, the Resimac share price remains down 14% in 2021. That compares to a year-to-date gain of 13% posted by the All Ordinaries Index (ASX: XAO).
Over the past month, shares in Resimac have edged up 3%.
The company was distinguished as Non-Bank of the Year by the Australian Mortgage Awards 2020. It originates, services and funds "prime, non-conforming residential mortgages and asset finance products" in Australia and New Zealand.
