Rio Ups Buyback After Coal & Allied Sale
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Rio Tinto has boosted its current share buyback to $4 billion with adding an additional $US2.5 billion to its program from the proceeds of the sale of Coal & Allied to Yan Coal of China.
$A700 million will be allocated to the Australian-listed shares, the rest to the UK-listed shares.
The company already had buybacks totalling $US1.5 billion in the market ($US500 million originally and $1 billion announced in August with the half year results.
Rio said in a statement released overnight that the capital return "will be executed through a combination of an off-market buy-back tender, targeting A$700 million (approximately $560 million) of Rio Tinto Limited shares, with the balance of approximately $1.9 billion of additional funds being allocated to Rio Tinto’s existing on-market purchases of Rio Tinto plc shares.
The move was approved at board meeting in Singapore this week. After a last-minute bid battle, Rio sold Coal & Allied in June to Yancoal, a state-backed Chinese mining company for a total of $US2.69bn, including future royalty payments. Yancoal subsequently sold a 49% stake in the business to Glencore, the losing bidder.
Rio Tinto CEO J-S Jacques said in a statement “Returning the $2.5 billion proceeds from our Coal & Allied divestment shows our continued commitment to delivering superior value and returning cash to our shareholders. This year we have announced cash returns to shareholders of $8.2 billion, comprising $4.2 billion of dividends and $4 billion of share buy-backs. Shareholder returns of this scale are made possible by maintaining the strongest balance sheet in the sector and a disciplined capital allocation process.”
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.