Equinor launches a USD 5 billion share buy-back programme
September 05 2019 - 12:47AM
Equinor (OSE: EQNR, NYSE: EQNR) is launching a share
buy-back programme of up to USD 5 billion over a period until the
end of 2022. The first tranche of the programme of around USD 1.5
billion is commencing today and will end no later than 25 February
2020.
“Equinor is committed to capital distribution to our
shareholders. We have over the last years built a strong financial
position with solid credit ratings and a net debt ratio around 20%.
The upcoming start-up of the world-class Johan Sverdrup field,
combined with several other new fields in production, provides
additional confidence in our outlook for production growth and
increased cash generation capacity. We are therefore in a good
position to increase capital distribution, while continuing to
invest in our high-quality project portfolio”, says Eldar Sætre,
President and CEO of Equinor ASA.
“Following strong operational improvements over recent years, we
increased the quarterly dividends by 13% this year. Utilising share
buy-backs as an additional tool to strengthen capital distribution
is aligned with our dividend policy”, says Equinor’s Chief
Financial Officer, Lars Christian Bacher.
The share buy-back programme of up to USD 5 billion, including
shares to be redeemed from the Norwegian State, is intended to be
executed in the market until the end of 2022. Based on the closing
Equinor share price and the USD/NOK exchange rate on 4 September
2019 the full programme represents around 292 million shares or
around 8.7 % of the share capital. The purpose of the share
buy-back programme is to reduce the issued share capital of the
company. All shares repurchased as part of the programme will be
cancelled.
According to an agreement between Equinor and the Norwegian
State, represented by the Ministry of Petroleum and Energy, the
Norwegian State will participate in share buy-backs on a
proportionate basis, ensuring that its ownership interest in
Equinor remains unchanged at 67%.
The share buy-back programme will be structured into tranches
where Equinor will buy back a certain USD value of shares over a
certain period. For the first tranche, running from 5 September
2019 up to no later than 25 February 2020, Equinor is entering into
a non-discretionary agreement with a third party who will make its
trading decisions independently of the company. In this first
tranche, shares for up to USD 500 million will be purchased in the
market, implying a total first tranche of around USD 1.5 billion
including redemption of shares from the Norwegian State.
The execution of further tranches of the programme will be
notified to the market and is conditional upon future annual
general meetings renewing the authorisation to buy back own shares
and renewal of the agreement with the Norwegian State. Future
tranches are also subject to commodity price conditions and balance
sheet strength.
As described in the dividend policy, it is Equinor’s ambition to
grow its annual cash dividend, measured in USD per share, in line
with long term underlying earnings growth. In addition to cash
dividend, the dividend policy outlines that Equinor might buy back
shares as part of total distribution of capital to
shareholders.
Further information about the share buy-back programme
and the first tranche:
The first tranche of the share buy-back programme is based upon
the authorisation to purchase own shares granted to the Board of
Directors at the annual general meeting on 15 May 2019 and
registered in the Norwegian register for business enterprises on 18
May 2019. According to the authorisation, the maximum number of
shares to be purchased in the market is 75 000 000, the minimum
price that can be paid for shares is NOK 50, and the maximum price
is NOK 500. The authorisation is valid until the earlier of 30 June
2020 and the annual general meeting in 2020.
As further described in the notice to the annual general meeting
in 2019, Equinor has an agreement with the Norwegian State whereby
the State will vote for the cancellation of shares purchased
pursuant to the authorisation, and the redemption of a
proportionate number of its shares in order to maintain its
ownership share in the company. The price to be paid to the State
for redemption of shares shall be the volume-weighted average of
the price paid by Equinor for shares purchased in the market plus
an interest rate compensation, adjusted for any dividends paid, in
the period up until final settlement with the State. In order to
accommodate the redemption of State shares at the annual general
meeting in 2020, no market purchases of shares under the programme
will be made in the period from 25 February 2020 and until after
the annual general meeting in 2020.
In the first tranche, shares will be purchased on the Oslo Stock
Exchange. It will be conducted in accordance within applicable safe
harbour conditions, and as further set out i.a. in the Norwegian
Securities Trading Act of 2007, EU Commission Regulation (EC) No
2273/2003 and the Oslo Stock Exchange's Circular on buy-backs of
own shares and price stabilisation 2/2008. If the first tranche
should be expanded to cover purchases on other European trading
venues than Oslo Stock Exchange, Equinor will inform the market in
advance.
Upon completion of the first tranche of the programme, the Board
of Directors will propose to the annual general meeting in 2020 to
cancel the purchased shares and redeem the proportionate number of
State shares. Any shares purchased in subsequent tranches will
follow a similar process with cancellation and redemption at the
following annual general meeting.
Analyst conference:
CFO Lars Christian Bacher will host an analyst call 5 September
at 08:45 hr CEST. Please see phone numbers to dial below.
Instructions will be given by the operator.
Norway: +47 23500243United Kingdom: +44 3333000804USA: +1
6319131422France: +33170750711
Pincode: 12500895
Please see Equinor.com for webcast link.
Further information:
Investor relationsPeter Hutton, senior vice
president, Investor Relations,+44 7881 918 792 (mobile)
Helge Hove Haldorsen, vice president Investor Relations North
America,+1 281 224 0140 (mobile)
PressBård Glad Pedersen, vice president, Media
Relations,+47 918 01 791 (mobile)
This information is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading Act
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