Diversified miner Glencore plans to spend $1bn (R17.73bn) buying back its shares over the next seven months in an effort to offset the decline of the group's share price.
In a statement on Monday, Glencore said the programme’s purpose was to reduce the company’s capital and that it planned to hold any shares purchased in treasury.
The buyback scheme, which will be managed by UBS, comes after Glencore announced last week that it had concluded the merger of Viterra and Bunge Global SA, providing the miner with a $900m cash injection.
The merger also left Glencore with 32.8-million shares in the NYSE-listed Bunge, a stake that the company said it viewed as surplus capital.
In a statement last week, Glencore said the latest buyback was underpinned by the value of its new shareholding in Bunge, representing less than 40% of the shares’ market value at the time of the merger.
The company has shed more than R500bn in market value over the past year amid concern about lower commodity prices.
In April, the group narrowed its full-year coal production guidance, reflecting concern about the outlook for seaborn thermal coal prices.
The price of coal has slumped by nearly 20% over the past year as trade wars, policy uncertainty and investment in renewable energy weigh on demand.
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