Infinity Capital Investments has repurchased 9.8% of its capital

Infinity Capital Investments has repurchased almost 42 million of its own shares, equivalent to about 9.8% of the share capital, through an offer that was oversubscribed, according to a report by the issuer published yesterday on the Bucharest Stock Exchange (BVB) website.

The former SIF Oltenia launched the offer on August 6, the market operation being composed of two repurchase programs approved in Infinity's shareholders' meeting this spring. One program aimed to repurchase 40 million of its own shares, equivalent to 8.4% of the share capital, the securities will be canceled to reduce the capital of the alternative investment fund. The other program intended to purchase two million of the company's own shares for free distribution to the company's administrators, directors and employees in order to build their loyalty, according to performance criteria established by the Board of Directors of Infinity Capital Investments.

Shareholders launched sales orders for almost 48.6 million shares, equivalent to 116% of the offer that ended on August 20. Thus, for every 1,000 shares placed in the offer, one shareholder sold 864 shares at a price of 2.6 lei.

The amount of shares placed in the offer suggests sales by institutional investors, given that Infinity Capital Investments has few active retail shareholders.

Buybacks are, in theory, beneficial for the share price and the reward of investors, because, depending on the price at which they are made, they can lead to an increase in the quotation, and, by canceling the redeemed securities, the issuer's profit per share and the potential dividend yield are increased. However, after the hostile takeover of the company by Lion Capital, Longshield Investment Group and a gallery of interposed funds, Infinity no longer granted dividends.

At the end of July, the company's net asset value amounted to about 3.84 billion lei, which compared to the current stock market valuation of the fund, of 1.21 billion lei, is equivalent to a trading discount of 68%.