SURABAYA, October 31, 2023 – PT Avia Avian Tbk. (“AVIA”) announced its plan to repurchase the company's shares (“Share Buyback”) with a maximum of 1.425 billion shares to be repurchased, or approximately 2.3% of the Company's issued and paid-up capital. Based on the information disclosure submitted to the Indonesia Stock Exchange (IDX), AVIA has prepared a fund of Rp1 trillion for the share repurchase. The buyback will be carried out within 18 months from the approval of the corporate action by AVIA shareholders, or between December 08, 2023, and June 07, 2025.
AVIA's main consideration for conducting the Share Buyback is to create flexibility that allows AVIA to have a mechanism to maintain the fairness and stability of AVIA's share price if, according to AVIA's management, AVIA's share price does not reflect AVIA's true value, performance, and fundamentals. AVIA's management believes that currently, AVIA's share price does not reflect the true value, performance, and fundamentals of AVIA as a market leader in Indonesia's decorative paint industry, which boasts strong financial performance and fundamentals, by considering, among other things, AVIA's Price Earning Ratio (PER). Currently, with AVIA's market share price hovering around Rp500, reflecting a PER below 20X, it has experienced a significant decline compared to AVIA's historical PER over the last 1.5 years, which once reached over 35X. Furthermore, in our observation, when compared to the average PER of similar industries in the Asia regional area, which ranges from 30X - 50X.
The implementation of this Share Buyback is also expected to further increase investor confidence and provide a better return for AVIA shareholders through an increase in AVIA's Earnings Per Share.
AVIA will use internal funds to finance this corporate action, and the execution of this Share Buyback will not disrupt AVIA's business activities and operations, as AVIA possesses strong financial fundamentals and adequate working capital to fund its future business operations and growth.
A General Meeting of Shareholders to seek approval for this corporate plan will be held on December 07, 2023, and the meeting notice will be issued on November 15, 2023.
***
About PT Avia Avian Tbk
PT Avia Avian Tbk. was established in 1978 as an integrated paint manufacturing company. It is known as Avian Brands. For over 4 decades, Avian Brands has brought color to the lives of millions of Indonesian families through a variety of products, including Sunguard All in One, Supersilk Anti Stain, and Avitex wall paints, No Drop waterproof coating, and Avian wood & iron paints.
Listed on the Indonesia Stock Exchange (IDX) on December 8, 2021, with stock code (IDX: AVIA), AVIA is the largest decorative paint manufacturer and a market leader in the decorative paint and coating industry in Indonesia, based on a survey conducted by Frost & Sullivan. Currently, AVIA controls approximately 23% of the market share in the decorative paint and coating industry in Indonesia. AVIA boasts strong manufacturing capacity and capabilities through its manufacturing facilities in Sidoarjo and Serang, supported by vertical integration capabilities that allow AVIA to produce raw materials internally. AVIA also has the widest distribution network in Indonesia, comprising 116 self-owned distribution centers, 14 self-owned mini distribution centers, and 40 third-party distribution centers as of the end of the first semester of 2023. All these distribution centers serve over 56,000 building material stores across Indonesia. Since 2020, Avian Brands has owned the first research, development, and innovation center in Indonesia called the Avian Innovation Center (AIC), spanning 5,000 square meters. As a testament to Avian Brands' commitment to environmental management, occupational health and safety, and GCG (Good Corporate Governance) in accordance with international standards, Avian Brands has successfully obtained and implemented ISO 14001:2015 (Environmental Management), ISO 45001:2018 (Occupational Health and Safety Management System), ISO 50001:2018 (Energy Management System), as well as 26000:2010 (Guidelines on GCG, social responsibility, Social Harassment, and Gender Equality). The presence of Avian Brands aims to provide leading benefits and contribute to coloring Indonesia.
