MMJ Group Holdings Limited (ASX: MMJ) (MMJ or the Company) is pleased to announce an on-market buy-back of up to 10m MMJ ordinary shares over the next 12 months (‘buy-back’) as part of its active approach to capital management.
In managing its investment portfolio and asset allocation, the Company is continually monitoring its investments and new investment opportunities in the Cannabis sector. Understanding the portfolio and noting the discount that the Company’s shares are trading to the net asset value per share of its investment portfolio, the Board have determined that an on-market buyback of MMJ shares is a meaningfully value accretive use of its funds.
The buy-back is from existing cash reserves and is expected to enhance shareholder returns.
Please refer to the attached Appendix 3C for further information relating to the buy-back.
MMJ has decided to distribute 20% of its annual profit after tax after excluding unrealised gains and losses on investments in respect of financial years commencing after 30 June 2019.
The dividend would be payable within three months of each half year after the completion of the half year and annual financial statements. It would be MMJ’s intention that the dividend would benefit from available franking credits held by the Company.
On 15 April 2019 MMJ announced the proposed appointment of Embark Ventures (EBV) as manager of MMJ’s investments. Today MMJ advises that MMJ has executed an investment management agreement (IMA) with EBV. The IMA will become effective following MMJ shareholders approval of:
MMJ shareholders will shortly be receiving a notice of meeting for a MMJ shareholders meeting to be held in July 2019. The notice of meeting will include material details of the IMA together with the key terms of the performance rights.
MMJ confirms the following in respect of the appointment of EBV:
Peter Wall, MMJ Chairman, said: “The Board considers that the implementation of the buy-back and the dividend policy together with confirmation of the appointment of Embark Ventures, are important steps in addressing the 39% discount to the fair value of MMJ’s net asset value per share1. The Board looks forward to MMJ shareholders confirming the appointment of Embark Ventures in order to provide investors with certainty over MMJ’s operating structure and allow MMJ to ramp up its investment operations”.
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