Smiths City's proposed $5.7m share buyback delayed by red tape

It had planned to put forward a planned share buyback to investors at the August 21 annual meeting.

Smiths City Group shareholders won't vote on a $5.7 million capital return at this month's annual meeting as the retail chain operator works through outstanding regulatory matters.

The Christchurch-based company had planned to put forward a planned share buyback to investors at the Aug. 21 annual meeting, but will now have to hold a special meeting later this year as it irons out the details of the deal. Smiths City plans to pay 72 cents a share in a compulsory acquisition and cancellation of three shares in every 20, provided it gets approval from the High Court, Inland Revenue, lender ASB Bank and shareholders.

"The return of capital was not referred to in the notice of meeting as the company is still attending to some regulatory matters that need to be dealt with prior to putting the return of capital to the shareholders of the company for their approval," chairman Craig Boyce said in a statement. "The company's intention is to put the matter to shareholders for approval at an extraordinary general meeting later in the year."

The retailer is partway through a five-year transformation programme where it wants to quit low margin businesses and expand its Auckland presence. In June it reported a 54 percent jump in underlying earnings to $2 million on largely flat revenue $227.5 million on a smaller restructuring bill.

The shares recently traded at 71 cents and have increased 2.9 percent so far this year.