TIDMRIO
RNS Number : 6215R
Rio Tinto PLC
22 September 2017
FORMATTING AMMENT
The 'Rio Tinto share buy-back programme' announcement released
on 21 September 2017 at 17:03 under RNS No 4894R has been
reformatted to include footnotes.
All material details remain unchanged.
The full text is shown below.
Notice to LSE
Rio Tinto unveils new $2.5 billion share buy-back to return Coal
& Allied Industries Ltd sale proceeds to shareholders
21 September 2017
Rio Tinto has today committed an additional $2.5 billion to its
ongoing share buy-back programme, returning the proceeds of the
sale of Coal & Allied to its shareholders.
The capital return programme 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 "Programme").
Today's announcement brings the total of Rio Tinto share
buy-backs announced during 2017 to $4 billion, comprising the $2.5
billion committed today and the $500 million and $1 billion
on-market share buy-back programmes of Rio Tinto plc shares,
announced on 8 February 2017 and 2 August 2017.
Rio Tinto chief executive J-S Jacques said "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."
Rio Tinto Limited will target the completion of the off-market
purchase of A$700 million of its shares in 2017. The balance of
approximately $1.9 billion of new on-market purchases by Rio Tinto
plc will commence on 27 December 2017 and will be completed no
later than 31 December 2018. The previously announced $1.5 billion
Rio Tinto plc programmes will be completed by the end of 2017. As
of 20 September, Rio Tinto had purchased $718 million of the $1.5
billion. The Programme is subject to market conditions and
compliance with all applicable laws and regulations.
All shares purchased will be cancelled.
Rio Tinto Ltd off-market buy-back (the "Buy-Back")
Rio Tinto Limited will target the off-market purchase of A$700
million of its shares, although it reserves the right to increase
or decrease the size of the Buy-Back or not buy back any
shares.
Rio Tinto Limited will invite eligible shareholders in Australia
or New Zealand to tender Rio Tinto Limited shares at discounts of
between 8 and 14 per cent (inclusive, and in one per cent
intervals) to the Market Price1, or as a Final Price Tender2. The
Buy-Back Price will be the price as determined by Rio Tinto Limited
that equates to the largest of these discounts ("Buy-Back
Discount") to the Market Price that enables Rio Tinto Limited,
based on the Tenders received, to repurchase the amount of capital
it determines to buy back.
Eligible shareholders will also have the ability to select a
Minimum Price3 below which shares tendered by them will not be
bought.
Rio Tinto Limited intends to buy back all shares tendered by
eligible shareholders who tender their shares as a Final Price
Tender or who tender their shares at a discount greater than or
equal to the Buy-Back Discount, subject to any scale back or
Minimum Price condition. A shareholder whose Tender is accepted
will be paid the Buy-Back Price for each share that is bought back.
This will be the case even if they tender their shares at a
discount greater than the Buy-Back Discount adopted by Rio Tinto
Limited.
Rio Tinto Limited will not buy back any shares tendered by
shareholders at a discount smaller than the Buy-Back Discount, or
any shares that are tendered specifying a Minimum Price that is
greater than the Buy-Back Price.
If the total number of shares tendered as Final Price Tenders or
at a discount greater than or equal to the Buy-Back Discount is
greater than the number of shares Rio Tinto Limited determines to
repurchase, successful Tenders may be scaled back. However, if
there is a scale back, Rio Tinto Limited will buy back a Priority
Allocation (expected to be the first 75 shares(4) ) successfully
tendered by each shareholder.
In addition, those who tender all of their shares as a Final
Price Tender or at a discount greater than or equal to the Buy-Back
Discount and who would be left with a Small Holding (being 30 or
less shares) as a result of a scale back, will not have their
Tender scaled back and their Tender will be accepted in full.
In the draft class ruling, the Australian Taxation Office has
indicated that, for Australian tax purposes, the Buy-Back Price
will comprise:
-- a capital component of A$9.44; and
-- a fully franked dividend component equal to the difference
between the Buy-Back Price and A$9.44.
For the purposes of Australian capital gains tax calculations,
the deemed capital proceeds that shareholders (other than
companies) will generally be taken to have received on disposal of
their shares under the Buy-Back will be A$9.44 plus an amount equal
to the excess of the Tax Value5 over the Buy-Back Price. Rio Tinto
Limited does not intend to buy back shares at a price that exceeds
the Tax Value.
The expected Buy-Back timetable is outlined below.
It is expected that eligible shareholders will be sent a
buy-back tender booklet ("Buy-Back Booklet") containing the terms
and conditions of the Buy-Back in early October 2017.
Buy-Back timetable*
Event Date
--------------------------------------------- ----------------
Last day that shares can generally be 26 September
acquired on the ASX to be eligible to 2017
participate in the Buy-Back and, as
a consequence, may be eligible for franking
credits
--------------------------------------------- ----------------
Shares quoted on the ASX ex--entitlement 27 September
to participate in the Buy--Back6 2017
--------------------------------------------- ----------------
Record date for determination of shareholders 28 September
entitled to participate in the Buy-Back 2017
at 7pm (Melbourne time)
--------------------------------------------- ----------------
Tender Period opens 11 October 2017
--------------------------------------------- ----------------
Tender Period closes - Tenders must 10 November 2017
be received by 7pm (Melbourne time)
--------------------------------------------- ----------------
Announcement of the Buy-Back Price and 13 November 2017
scale-back (if any)
--------------------------------------------- ----------------
Buy-Back proceeds dispatched/credited 20 November 2017
to participating shareholders
--------------------------------------------- ----------------
* While Rio Tinto Limited does not anticipate any changes to
these dates and times, it reserves the right to vary them by
announcement to the ASX. Dates are based upon a Melbourne
timeline.
Participation in the Buy-Back is voluntary. For some
shareholders, depending on their tax status, the after-tax return
of participating in the Buy-Back may be greater than a sale of
their shares on-market. The Buy-Back will have different tax
consequences for different shareholders. Shareholders should seek
their own professional advice (including tax advice) about the
implications of participating in the Buy-Back in light of their
particular circumstances.
Further information about the Buy-Back will be set out in the
Buy-Back Booklet, which is expected to be dispatched to
shareholders in early October 2017.
The maximum number of shares that may be repurchased by Rio
Tinto Limited under the Buy-Back is 42.4 million shares. This is in
accordance with the terms of the shareholder approval granted at
Rio Tinto Limited's 2017 annual general meeting.
Rio Tinto plc on-market buy-back
The aggregate maximum consideration available for the on-market
Rio Tinto plc share buy-back portion of the Programme will be
announced following the completion of the off-market buy-back
tender for Rio Tinto Limited shares, which is expected to be on 13
November 2017.
The maximum number of shares that may be purchased by Rio Tinto
plc under the Programme is 100 million.
Any purchases of Rio Tinto plc shares will be effected within
certain pre-set parameters, and in accordance with its general
authority to repurchase shares granted by its shareholders at the
annual general meeting of Rio Tinto plc on 12 April 2017, Chapter
12 of the UK Listing Authority Listing Rules and the provisions of
the Market Abuse Regulation 596/2014/EU dealing with buy-back
programmes. The purpose of the Rio Tinto plc share buy-back is to
reduce the share capital of Rio Tinto plc.
The purchase of any Rio Tinto plc shares following the expiry of
the authority granted at the 2017 Rio Tinto plc annual general
meeting is conditional on the requisite shareholder authority being
granted at the 2018 annual general meeting.
Important Notices
Capitalised terms in this announcement have the same meaning as
will be contained within the Buy-Back Booklet.
The Buy-Back is not available to ineligible foreign
shareholders. This includes shareholders outside of Australia and
New Zealand, shareholders to whom Rio Tinto Limited would be
prohibited from paying money, shareholders to whom the invitation
may not be lawfully made or shareholders whose participation in the
Buy-Back is not permitted. Further details on shareholder
eligibility will be set out in the Buy-Back Booklet.
In particular, the Buy-Back is not available to any person who
is (or who is acting on behalf of or for the account of a person
who is) in the United States, a US Person (as defined in Regulation
S of the United States Securities Act of 1933) or a resident of
Canada. This announcement, and any other documents related to the
Buy-Back, are not for distribution, directly or indirectly, in or
into the United States (including its territories and possessions,
any State of the United States and the District of Columbia) or
Canada.
Certain statements contained in this announcement, including
statements regarding the implementation of our capital management
programme and its effect on our business, may constitute "forward
looking statements" for the purposes of applicable securities laws.
Rio Tinto undertakes no obligation to revise the forward looking
statements included in this announcement to reflect any future
events or circumstances. Rio Tinto's actual results, performance or
achievements could differ materially from the results expressed in,
or implied by, these forward looking statements. Factors that could
cause or contribute to such differences include, for example, the
general trading and economic conditions affecting Rio Tinto.
This document does not provide financial product advice or
investment advice and Rio Tinto is not making any recommendation or
giving any advice on the value of its shares, or whether (or how)
you should sell your shares. This document has been prepared
without taking into account your particular objectives, financial
situation, taxation circumstances or needs. You should consider the
appropriateness of the Buy-Back having regard to these factors. Rio
Tinto strongly recommends that you consult your financial, taxation
or other professional adviser.
Contacts
media.enquiries@riotinto.com
riotinto.com
Follow @RioTinto on Twitter
Media Relations
Illtud Harri
T +44 20 7781 1152
M +44 7920 503 600
David Outhwaite
T +44 20 7781 1623
M +44 7787 597 493
David Luff
T +44 20 7781 1177
M +44 7780 226 422
Investor Relations, United Investor Relations, Australia
Kingdom Natalie Worley
John Smelt T +61 3 9283 3063
T +44 20 7781 1654 M +61 409 210 462
M +44 7879 642 675
Rachel Storrs
David Ovington T +61 3 9283 3628
T +44 20 7781 2051 M +61 417 401 018
M +44 7920 010 978
Nick Parkinson
T +44 20 7781 1552
M +44 7810 657 556
Rio Tinto plc Rio Tinto Limited
6 St James's Square 120 Collins Street
London SW1Y 4AD Melbourne 3000
United Kingdom Australia
T +44 20 7781 2000 T +61 3 9283 3333
Registered in England Registered in Australia
No. 719885 ABN 96 004 458 404
[1] 'Market Price' means the volume weighted average price (as
defined, which will exclude certain trades not considered to be 'at
market') of Rio Tinto Limited ordinary shares sold on the ASX over
the five trading days up to and including the closing date of the
Buy-Back tender period, calculated to four decimal places, as
determined by Rio Tinto Limited.
[2] A 'Final Price Tender' means a Tender in which the
shareholder elects to receive the final Buy-Back Price determined
through the tender process.
[3] It is expected that there will be four minimum prices that
shareholders will be able to select from, if they wish to make
their Tender conditional on a minimum price.
[4] Rio Tinto Limited reserves the right to change this to a
lesser number of shares, to ensure that it is able to buy back only
the number of shares it determines to buy back.
[5] The Tax Value is calculated by adjusting the volume weighted
average price of Rio Tinto Limited shares over the last five
trading days up to and including 21 September 2017 by the
percentage movement in the Rio Tinto plc share price from the close
of trading on the London Stock Exchange on 21 September 2017 to the
opening of trading on the London Stock Exchange on the closing day
of the Buy-Back Tender Period (currently expected to be 10 November
2017). If the movement in the Rio Tinto plc share price is
significantly different from the movement in the Rio Tinto Limited
share price over the relevant period, Rio Tinto Limited may
approach the ATO to seek to vary the methodology used to determine
the Tax Value.
[6] Shares acquired on the ASX on an ex-entitlement basis on or
after this date will not confer an entitlement to participate in
the Buy-Back.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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