BHP spinoff South32 has announced a $655 million share buyback, to make use of its massive cash reserves.
The diversified mining giant had US$859 million in net cash as of December 31 last year.
It announced its intentions to buy back US$500 million of shares – roughly 4.5% of its current market capitalisation – on March 27.
“The combination of our operating leverage, strong balance sheet and simple capital management framework is designed to maximise returns and reward shareholders as financial performance improves,” chairman David Crawford said.
“Today’s announcement further demonstrates our disciplined approach to capital management and our confidence in the group’s cash generating capacity.”
Chief executive officer Graham Kerr said the miner’s net cash balance had continued to build, “giving us the financial strength and flexibility to invest in our existing operations, pursue opportunities where we can create value and return excess capital to shareholders”.
“This US$500 million capital management program meaningfully increases shareholder returns and follows the recent announcement of our US$192 million interim dividend.”
South32 said the timing and number of shares purchased under the on-market share buy-back “will be contingent upon the prevailing share price and market conditions”.