Anglo American to return up to $1 billion to shareholders

Morgan Stanley & Co will disburse the first tranche of $500m


Diversified mining outfit Anglo American plc has announced its intention to return up to $1 billion (over P10.6 billion) to its shareholders through an on-market irrevocable and non-discretionary share buyback programme .

According to the company, the programme will begin immediately and will end no later than 31 March 2020. The sole purpose of this programme is to reduce the issued share capital of Anglo American. Mark Cutifani, Chief Executive of Anglo American said “We have a disciplined and value focused approach to capital allocation that is designed to fund the sustainability of our existing business and our base cash dividend for shareholders.

With a strong balance sheet in place, we then consider the appropriate balance of options for any discretionary capital in terms of growth investments and additional returns. Today’s announcement of a share buyback programme demonstrates our applied discipline and the Board’s confidence in the business.”

Stephen Pearce, Finance Director of Anglo American, added: “We have de-leveraged our balance sheet extensively in recent years and are confident in our funding of our portfolio of highly attractive near and medium-term growth opportunities. Given the current levels of cash generated in the business, along with the further value potential we see in Anglo American, we think it appropriate to prioritise returning excess cash to shareholders through a share buyback programme. This additional return of up to $1 billion recognises the resilience of our position and builds upon the $3.4 billion of cash that we will have returned to shareholders since reinstating the dividend in mid-2017.”

The programme will be executed in two tranches of up to $500 million each. Anglo American has given irrevocable and non-discretionary instructions to Morgan Stanley & Co. International plc in relation to the first tranche of $500 million of the programme. Morgan Stanley will act as principal and will purchase shares on the Johannesburg Stock Exchange and UK trading venues1 in line with the proportion of Anglo American’s shareholder register in South Africa and the United Kingdom and will make its trading decisions concerning the timing of the purchases of Anglo American’s ordinary shares independently of Anglo American.

The purchased shares will be cancelled. The number of ordinary shares permitted to be purchased by Anglo American, pursuant to the authority granted by the shareholders at the annual general meeting of Anglo American on 30 April 2019 is 210.6 million ordinary shares. At an illustrative share price of £21.88 per share as at 24 July 2019, this programme will involve the purchase of approximately 36.6 million ordinary shares.

Any purchases of ordinary shares by Anglo American in relation to this announcement will be effected within certain pre-set parameters and in accordance with the authority granted by shareholders at the 2019 AGM, the Market Abuse Regulation 596/2014 and Chapter 12 of the Listing Rules and will be discontinued in the event that Anglo American ceases to have the necessary general authority to repurchase ordinary shares.