Teladan Group Berhad Seeks Shareholder Approval for Renewal of Share Buy-Back Authority

Key Highlights and Investor Insights

Teladan Group Berhad has issued an important notice to its shareholders concerning the proposed renewal of its authority to buy back up to 10% of its total issued shares. This proposal will be tabled as a Special Business at the Company’s 7th Annual General Meeting (AGM), scheduled for Monday, 25 May 2026, 10:00 a.m. at DoubleTree by Hilton Melaka.

Key Points of the Proposed Share Buy-Back Renewal

• Scope of Authority: The proposal, if approved, will allow Teladan to purchase up to 10% of its issued shares (up to 85,633,770 shares), either to be held as treasury shares or to be cancelled.
• Funding Sources: The buy-back may be funded by internally generated funds and/or bank borrowings but must not exceed the aggregate of the Company’s retained profits at the time of purchase.
  • As of 31 Dec 2025, Company retained profits stood at RM26.32 million (audited); Group retained profits at RM483.03 million.
  • As of 28 Feb 2026, Company retained profits (unaudited) at RM26.79 million; Group retained profits at RM493.19 million.
• Pricing Mechanism: The purchase price must not exceed 15% above the weighted average market price for the five market days before the buy-back. Resale or transfer of treasury shares must not be less than the weighted average market price of the preceding five market days, or at a discount of not more than 5% provided certain conditions are met.
• Public Shareholding Spread: The buy-back will not proceed if it threatens the minimum public shareholding spread requirement of 25% as stipulated by Bursa Securities.
• Treatment of Purchased Shares: Purchased shares may be cancelled, retained as treasury shares (for resale, share dividend, employee share schemes, or as consideration for acquisitions), or dealt with in any other manner allowed by law. While held as treasury shares, these shares lose voting and dividend rights and are not counted for quorum or substantial shareholding calculations.

Strategic Rationale and Potential Impacts

• Support for Share Price: The initiative allows Teladan to support its share price by absorbing excess supply and providing price stability, especially during periods of undervaluation.
• Potential EPS Enhancement: Cancellation of purchased shares will reduce the total share base, leading to higher earnings per share (EPS) if profits are sustained.
• Capital Flexibility: The treasury shares held can be distributed as dividends, resold for capital gains, used for employee share schemes, or as acquisition currency.
• Potential Disadvantages: The buy-back will reduce available cash and could limit Teladan’s ability to pursue alternative investment opportunities. It may also reduce funds for future dividend payments if cash is reallocated to buy-backs.
• Effects on Share Capital:
  • If all purchased shares are cancelled, the issued shares will decrease to 770,703,432 from 856,337,702.
  • If held as treasury shares, the issued capital remains unchanged but the shares lose voting and dividend rights.
• Directors’ and Substantial Shareholders’ Holdings: No substantial change in their percentage holdings unless the buy-back triggers a crossing of thresholds that invoke the Malaysian Code on Take-Overs and Mergers (general offer obligations). Teladan intends to avoid such a scenario.
• Historical Share Price Context: Over the past 12 months (April 2025 – March 2026), Teladan’s share price ranged from a high of RM1.03 to a low of RM0.80. The last traded price before this statement was RM0.825. The company purchased 18,929,900 shares in the past 12 months for a total consideration of approximately RM17.3 million, with buy-back prices closely tracking market prices.

Important Information for Shareholders

• AGM Attendance: Shareholders are strongly encouraged to participate in the 7th AGM or submit their proxy forms by 10:00 a.m., 23 May 2026 if unable to attend.
• Price Sensitivity: Approval and execution of the share buy-back could support Teladan’s share price and improve EPS, making this a potentially price-sensitive corporate action.
• Regulatory Compliance: All buy-backs will be conducted within the framework of the Companies Act 2016 and Bursa Malaysia Securities Berhad Listing Requirements.

Conclusion and Recommendation

The Board of Directors unanimously recommends that shareholders vote in favour of the Proposed Renewal of Share Buy-Back Authority, viewing it as a measure to enhance value, support the share price, and offer strategic flexibility in capital management.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisers before making investment decisions. The information herein is based on disclosures by Teladan Group Berhad and may be subject to change or updates.

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