Shell CEO announces launch of $25bn share buyback program

Shell CEO announces launch of $25bn share buyback program

/ Financial News / Sunday, 09 September 2018 12:43

British-Dutch multinational oil and gas conglomerate Royal Dutch Shell have formally announced the launch of a $25bn share buyback initiative.

The introduction of the new program was publicly announced after the go-ahead was given the greenlight by shareholders at the company’s AGM. Shell CEO, Ben van Beurden expressed his delight in relation to the share buyback program and described the initiative as another major milestone towards the delivery of a world-class investment case.

The CEO said, “Today we are taking another important step towards the delivery of our world-class investment case, with the launch of a $25 billion share buyback program. Our financial framework remains unchanged. Our free cash flow outlook and the progress we have made to strengthen our balance sheet give us the confidence to start our share buyback program. Our intention remains to buy back at least $25 billion of our shares over the period 2018-2020, subject to further progress with debt reduction and oil price conditions.”

It was further disclosed that the maximum number of ordinary shares which may be purchased by the company under the buyback program is $834m, which is the maximum pursuant to the authority granted by the shareholders at the AGM.

In the first tranche of this buyback program (the ‘initial program’) the company has entered into an irrevocable, non-discretionary arrangement with a broker to enable the purchase of (A) ordinary shares and/or (B) ordinary shares up to and including October 25, 2018.

The aggregate maximum consideration for the purchase of (A) ordinary shares and (B) ordinary shares under the initial program is $2 billion. The shares bought back under the initial program will be whichever of the (A) ordinary shares and/or (B) ordinary shares is economically the least expensive on a given trading day.

The broker will make its trading decisions in relation to the company's securities independently of the company. The initial program will be carried out on the London Stock Exchange and/or on CBOE Europe Equities and will be affected within certain pre-set parameters.

The purpose of the initial program is to reduce the issued share capital of the company to offset the number of shares issued under the Scrip Dividend Program and to significantly reduce the equity issued in connection with the company’s combination with BG Group. All shares repurchased as part of the initial program will be cancelled.

Any further tranches of the buyback program, which may be conducted after completion of the initial program, will be announced in due course.

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