YBR outlines buyback and share purchase plan ahead of delisting

John Kavanagh

In the lead-up to its removal from the official list of the Australian Securities Exchange in November, Yellow Brick Road plans to buy back unmarketable parcels and offer a share purchase plan for shareholders who want to increase their holdings.
 
On Friday, YBR went into a trading halt, flagging an announcement that it will apply to delist from the ASX. Yesterday it released its plan, which will be put to shareholders at a meeting to be held “on or around” October 24.
 
In addition to the buyback and the share purchase plan, YBR said that for shareholders who retain their shares after the delisting it will consider engaging a third-party private share trading platform service to facilitate periodic off-market share transactions.
 
There are 326.4 million YBR shares on issue, held by 1380 shareholders. The top four shareholders hold around 62 per cent of those shares and the top 20 have held between 78 and 82 per cent over the past decade.
 
Under the ASX listing rules, an unmarketable parcel is one valued at less than A$500. YBR will offer 5.5 cents a share, which is the volume weighted average price of the shares for the five days leading up to Friday’s close.
 
The maximum number of shares the company will acquire under the buyback is 2.1 million. The company said the buyback will go ahead, regardless of whether the delisting occurs.
 
The share purchase plan will include a maximum allocation of $30,000 of new stock per shareholder and $2 million of total capital raised.
 
The documents outlining the delisting show the extent of the YBR share price discount to net tangible assets. NTA at June 30 was 13.9 cents a share, compared with a share price of six cents – a 56.7 per cent discount.
 
The share price to NTA discount has existed for a number of years – a reflection of shareholders’ view of the management’s ability to grow the business.