Rolls-Royce instigates £1bn share buy-back programme

Posted on 11 Dec 2014 by The Manufacturer

Rolls-Royce has introduced a new £1bn share buy-back programme following the completion of the sale of its energy gas turbine and compressor business to Siemens.

The subject of the deal supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power generation sectors. The £785m deal was completed with the German manufacturer earlier this month.

Rolls-Royce had said from the start that it intended to apply the buy-back scheme as soon as the deal was completed.

The aim of the buy-back is to reduce the issued share capital of the company, aiding the enhance of returns for shareholders.

The purchases made under the programme will be managed by the global investment banking firm Jefferies, which will make its trading decisions in relation to the company’s securities independently of Rolls-Royce. The first £250m tranche will be a non-discretionary programme and is binding, when the company is in a prohibited period.

In a statement, Rolls-Royce said any share purchases pursuant to the arrangements would be carried out within certain pre-set parameters and in accordance with listing rules.

The shares being purchased on behalf of the company will either be cancelled or held in treasury.