17LIVE’s Strategic Moves: Share Buybacks and ESOP Amendments Aim to Boost Shareholder Value

17LIVE Group Limited has released a detailed response to questions posed by the Securities Investors Association (Singapore) regarding its recent strategic initiatives, including a proposed share buyback mandate and significant amendments to the employee share option plan (ESOP). These initiatives are set to be discussed at the upcoming Extraordinary General Meeting (EGM) on November 28, 2024.

Key Highlights

The proposed share buyback mandate allows for repurchasing up to 17.74 million shares, representing 10% of the total issued shares. The company has outlined several strategic objectives for this move, including enhancing return on equity, efficient capital management, and mitigating market volatility. The buyback plan adheres to the listing rules of the Singapore Exchange Securities Trading Limited and will only proceed when deemed in the best interest of shareholders.

In the context of liquidity and volatility, the company assures that it will monitor market conditions closely to prevent disruptions, with the CEO and the Board overseeing the execution of buybacks.

ESOP Amendments

The company seeks shareholder approval to amend the 17LIVE ESOP, significantly increasing the number of shares authorized for issuance from 2.1 million to 7.3 million. This move is intended to attract and retain talent critical to the company’s growth. Additionally, the amendments would allow unvested shares to fully vest in the event of a company winding-up. This aspect has been carefully evaluated to minimize dilution effects, with new shares being issued gradually over seven years.

Financial Performance and Strategy

For the first half of 2024, 17LIVE reported a decline in operating revenue, attributed to shifts in consumer behavior post-pandemic and strategic recalibrations prioritizing profitability. Despite this, the company maintained a healthy gross profit margin and is focusing on its Forward Strategy to enhance core offerings and user engagement.

The combination of the 17LIVE ESOP and the executive incentive scheme is positioned as a dual approach to align executive performance with shareholder value creation across short and long-term horizons.

Shareholder Concerns and Board Assurances

Shareholders have expressed concerns regarding the amendments’ potential self-serving nature. The Board has assured that the changes are designed to motivate key personnel and align their incentives with long-term company success. Performance-based vesting criteria and gradual issuance of shares are among the safeguards to protect shareholder interests.

Conclusion

17LIVE’s strategic initiatives, if executed as planned, could significantly impact shareholder value by enhancing operational efficiency and sustaining growth. Investors will keenly observe the outcomes of the upcoming EGM and the company’s continued efforts to align management incentives with shareholder interests.

Disclaimer: This article is based on the company’s responses dated 22 November 2024, and any forward-looking statements are subject to risks and uncertainties that could cause actual results to differ.