REG - Rio Tinto - Replacement : Rio Tinto share buy-back programme <Origin Href="QuoteRef">RIO.L</Origin>

Rio TintoAnnouncement

22/09/2017 16:46

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RNS Number : 6215R
Rio Tinto PLC
22 September 2017 
 
FORMATTING AMENDMENT 
 
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 shares4) 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 acquired on the ASX to be eligible to participate in the Buy-Back and, as a consequence, may be eligible for franking credits  26 September 2017  
 Shares quoted on the ASX ex-entitlement to participate in the Buy-Back6                                                                                              27 September 2017  
 Record date for determination of shareholders entitled to participate in the Buy-Back at 7pm (Melbourne time)                                                        28 September 2017  
 Tender Period opens                                                                                                                                                  11 October 2017    
 Tender Period closes - Tenders must be received by 7pm (Melbourne time)                                                                                              10 November 2017   
 Announcement of the Buy-Back Price and scale-back (if any)                                                                                                           13 November 2017   
 Buy-Back proceeds dispatched/credited to participating shareholders                                                                                                  20 November 2017   
 
 
* 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 RelationsIlltud HarriT +44 20 7781 1152M +44 7920 503 600 David OuthwaiteT +44 20 7781 1623M +44 7787 597 493 David LuffT +44 20 7781 1177                                                            Investor Relations, AustraliaNatalie WorleyT +61 3 9283 3063M +61 409 210 462 Rachel StorrsT +61 3 9283 3628M +61 417 401 018  
 M +44 7780 226 422 Investor Relations, United KingdomJohn SmeltT +44 20 7781 1654M +44 7879 642 675 David OvingtonT +44 20 7781 2051M +44 7920 010 978 Nick ParkinsonT +44 20 7781 1552M +44 7810 657 556                                                                                                                                  
                                                                                                                                                                                                                                                                                                                                            
 Rio Tinto plc6 St James's SquareLondon SW1Y 4ADUnited Kingdom T +44 20 7781 2000                                                                                                                            Rio Tinto Limited120 Collins StreetMelbourne 3000Australia  T +61 3 9283 3333Registered in AustraliaABN 96 004 458 404         
 Registered in England No. 719885                                                                                                                                                                                                                                                                                                           
 
 
Rio Tinto plc 
 
6 St James's SquareLondon SW1Y 4ADUnited Kingdom T +44 20 7781 2000
Registered in England No. 719885 
 
Rio Tinto Limited 
 
120 Collins StreetMelbourne 3000Australia  T +61 3 9283 3333Registered in
AustraliaABN 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