Russian potash producer, Uralkali, has announced a share buyback worth up to $2.5 billion over the coming year.
Uralkali say the program, which covers ordinary shares and GDR’s and will extend until October 6 2012, will boost shareholder value through returning excess capital to shareholders, in balance with net debt and capital structure considerations. It added that shares purchased through the program, which will buy shares at market price in London and Moscow, will be cancelled, subject to corporate approval.Uralkali also announced that it a $2 billion credit facility with Sberbank.
Uralkali CEO, Vladislav Baumgertner, said the company’s confidence in the operating and market outlook for potash was a key factor in its go ahead for the program.
“The Board of Directors is convinced that the fundamentals of the potash industry remain highly attractive and Uralkali’s prospects as one of the leading global potash producers gives the Company a high degree of confidence as to the ability to deliver strong financial performance. That is why we announce a buyback Program which reflects our ongoing commitment to shareholder value while retaining a robust capital structure providing a strong platform for long term growth.”
The announcement had an immediate impact on Uralkali share prices, climbing more than 6.5% in morning trade from the Thursday close.