WebTech Wireless Inc. (TSX:WEW) is planning to buy up to 1.2 million of its shares.
The Burnaby company, which plans to spend up to $3.9 million on the buyback over the next 12 months, will reduce its number of outstanding shares by just over 2%.
The buyback program is aimed at reducing the company's cost of capital and improving the company's equity returns. As of April 30, the company had more than $25 million in cash, no net debt and a customer base generating a positive cashflow.
WebTech had been struggling in the past few months after one of its master distributors in its main market, Brazil, defaulted on its payments for the company's GPS-based locator units. WebTech's shares dropped 30% shortly after the default back in May.
WebTech's share price range during the past week: between $2.25 and $2.30; 52-week high: $7.39; 52-week low: $1.04.