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

Rio TintoAnnouncement

21/09/2017 17:06

RNS Number : 4894R
Rio Tinto PLC
21 September 2017
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."
RioTintoLimited 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")
RioTintoLimited will target the off-market purchase of A$700 millionof its shares, although it reserves the right to increase or decrease the size of the Buy-Back or not buy back any shares. 
RioTintoLimitedwillinvite eligible shareholders in Australia or New Zealand totenderRioTintoLimitedsharesatdiscountsofbetween 8 and14percent (inclusive, and in one per cent intervals) totheMarketPrice,orasaFinalPriceTender. TheBuy-Back Pricewillbe the price as determined by Rio Tinto Limited that equates to thelargest of these discounts("Buy-BackDiscount")totheMarketPricethatenablesRioTintoLimited, based on the Tenders received,torepurchasetheamountofcapital it determines to buy back.
Eligible shareholders will also have the ability to select a Minimum Price below which shares tendered by them will not be bought. 
RioTintoLimitedintendstobuybackallsharestenderedbyeligibleshareholderswhotendertheirsharesasaFinalPrice
TenderorwhotendertheirsharesatadiscountgreaterthanorequaltotheBuy-BackDiscount,subjecttoanyscaleback 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. 
RioTintoLimitedwillnotbuybackanysharestenderedbyshareholdersatadiscountsmallerthantheBuy-BackDiscount,oranysharesthataretenderedspecifyingaMinimumPricethatisgreaterthantheBuy-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) successfully tendered by each shareholder. 
In addition, thosewhotender all of theirsharesasaFinalPriceTenderoratadiscount greater than or equal to theBuy-BackDiscount and who would beleftwitha Small Holding (being 30orlessshares) 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, theAustralianTaxationOffice has indicated that, for Australiantaxpurposes,the Buy-Back Price willcomprise:
 acapitalcomponentofA$9.44;and
 afullyfrankeddividendcomponentequaltothedifferencebetweenthe Buy-BackPriceandA$9.44.
Forthepurposesof Australian capitalgainstaxcalculations,thedeemedcapitalproceedsthatshareholders (other than companies) will generally be taken to have receivedondisposaloftheirsharesundertheBuy-BackwillbeA$9.44plus anamountequaltotheexcessoftheTaxValueoverthe Buy-Back Price.RioTintoLimiteddoesnotintendtobuybacksharesatapricethatexceedstheTaxValue.
The expected Buy-Backtimetableisoutlinedbelow.
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 exentitlement to participate in the BuyBack
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.
ParticipationintheBuy-Backisvoluntary.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. Shareholdersshouldseektheirownprofessionaladvice(includingtaxadvice)abouttheimplicationsofparticipatingintheBuy-Backinlightoftheirparticularcircumstances.
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
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M +44 7780 226 422
Investor Relations, United Kingdom
John Smelt
T +44 20 7781 1654
M +44 7879 642 675
David Ovington
T +44 20 7781 2051
M +44 7920 010 978
Nick Parkinson
T +44 20 7781 1552
M +44 7810 657 556
Investor Relations, Australia
Natalie Worley
T +61 3 9283 3063
M +61 409 210 462
Rachel Storrs
T +61 3 9283 3628
M +61 417 401 018



Rio Tinto plc
6 St James's Square
London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England 
No. 719885
Rio Tinto Limited
120 Collins Street
Melbourne 3000
Australia 
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404

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