South32 to buy back shares for half a billion poundsStaff Writer | March 27, 2017
Mining and metals company South32 has announced plans to return an additional $500 million to shareholders, or around 4.5% of its current market capitalisation.
Miner The capital management programme
Chief executive officer Graham Kerr said: "Our net cash balance continues to build giving us the financial strength and flexibility to invest in our existing operations, pursue opportunities where we can create value and return excess capital to shareholders.
"This $500m capital management programme meaningfully increases shareholder returns and follows the recent announcement of our $192m interim dividend."
The timing and number of shares purchased under the on-market share buyback - which is not subject to shareholder approval and will be funded from existing cash reserves - will be contingent upon the prevailing share price and market conditions.
The capital management programme is expected to be completed over a 12-month period and the group said "all alternatives will continue to be assessed to ensure this capital is returned in an efficient manner".
Shore Capital said it likes the idea of such a return "very much", but is less keen on the method of execution on principle, as it believes buybacks inequitably tend to favour some holders over others. ■