Rio Tinto announced this morning the company has completed the buyback of $560 million worth of shares, an increase on the $500 million slated in February.
The buyback price of $48.44 per share represented a 14 per cent discount to the market price, with around 11.6 million shares retrieved representing 2.65 per cent of Rio Tinto Limited’s issued capital, or 0.63 per cent of the Rio Tinto Group.
The buyback is part of Rio Tinto’s $2 billion capital return program, a strategy which was designed to increase the underlying share dividends by around 10 per cent.
The global mining giant (ASX:RIO) was trading at $55.78, showing a marked fall since the peak of $65.60 in early March, showing the strong link to the free-falling iron ore price which has gone from US$60 down to US$46.70 at the end of the first week of April.
Rio initially invited shareholders to tender discounts between eight and 14 per cent, however shares which were tendered at less than or equal to discounts of 13 per cent were not bought back.
The on-market buyback of RioTinto plc shares will continue until the end of the year, but is not available to shareholders located in the United States.