LG Electronics completes W100b buyback ahead of schedule, cancellation due within a year

LG Electronics has completed a 100 billion won ($67.8 million) share buyback ahead of its original schedule.

The company wrapped up the buyback program — launched this year to enhance shareholder value — more than two months before its planned deadline, industry sources said Thursday.

Earlier this year, LG Electronics passed a board resolution and signed a share buyback trust agreement with NH Investment to purchase 100 billion won worth of its own shares on the open market by the end of September.

A sharp rally in LG Electronics' share price accelerated the completion of the buyback. When the board approved the buyback on Jan. 28, the company's common shares closed at 99,900 won and preferred shares at 50,600 won.

From Feb. 2, when the trust agreement was signed, through mid-July, the average closing price surged to 163,870 won for common shares and 64,605 won for preferred shares — gains of 64 percent and 28 percent, respectively.

LG Electronics announced a two-year, 200 billion won shareholder return program late last year as part of its corporate value enhancement plan. The first year's buyback wrapped up ahead of schedule, bolstering confidence in the predictability of the company's shareholder return policy, analysts said. An additional 100 billion won buyback is expected next year.

Under a revised Commercial Act that took effect earlier this year, the repurchased shares are set to be canceled within one year. Share buybacks and cancellations typically reduce the number of shares in circulation, improving per-share metrics such as earnings per share and book value per share.