Universal Entertainment Corp. is going to buy back some of its issued stock. According to a filing with the Jasdaq Securities Exchange last Friday, the gaming company will spend about $17.8 million to purchase the shares in order to convert them into treasure shares. The buyback is scheduled to take place between October 15 and December 28.
Universal will purchase 600,000 common stock shares, or about 0.75% of the outstanding amount. The action will “enable the execution of flexible capital policies that accommodate the reinforcement of the return of profits to shareholders and changes in the company’s operating environment.”
According to the filing, the initial buyback will be followed by “active, ongoing implementation of measures for the return of profits to shareholders based on its financial status and trends in securities markets.” Continued expansion of the company’s treasury stock holdings will take place as executives see fit.
As of September 30, Universal had 79,247,284 common shares still outstanding. Stocks in treasury shares were reportedly 947,716.
Universal was founded by Kazuo Okada, the embattled casino tycoon who was ousted from the company last year. In an interview with GGRAsia this past August, he predicted that the company would go belly up unless he was given back control of the operations.
Okada was ousted after reports began surfacing last year that he had misappropriated company funds. He was removed as the chairman and a member of the board of Universal in June 2017 and subsequently lost possession of Tiger Resort, Leisure and Entertainment, Inc., which is promoting the Okada Manila resort in the Philippines.
Okada has repeatedly said that he did nothing wrong. He accuses the company’s current management of defamation and of smearing his name in order to push him out.
Despite the denials, Okada’s problems persist. He was detained by police in Hong Kong this past August on corruption charges, but was subsequently released. He said at the time, “I have not been charged with any crime. ICAC’s investigation was from one of many, false allegations based on the groundless Universal Entertainment Corp special investigation report…”
As Universal struggles to separate itself from Okada, it is turning to different methods to strengthen its financial position. Offloading a small percentage of shares will hopefully allow it to find its footing without impacting the long-term value of the shares.
