Terra to catch ferts wave with buyback plan

08 May 2008 17:25  [Source: ICIS news]

HOUSTON (ICIS news)--Terra Industries will institute a dividend plan for shareholders and extend a share buy-back scheme by two years, to June 2010, the US fertilizer firm said on Thursday.

The moves are typical of US-listed companies that want to try to boost their share prices. Although Terra's stock is up by around 150% from a year ago, it has lagged the spectacular gains in other fertilizer companies in the last few months.

PotashCorp shares are up by around 205% from a year ago, while CF Industries shares are up by around 240%.

"Our view of Terra's core cash generation through future cycles enables us to institute a common stock dividend," Terra president and CEO Michael Bennett said in a statement.

Terra's first-quarter operating income more than doubled from a year earlier to $168m (€109m).

The dividend of 10 cents/share will be payable on 13 June.

The existing repurchase programme commenced in April 2006 and was scheduled to expire on 30 June. The plan allowed the company to buy up to 10% of its own stock to support the share price.

As of 31 March, Terra had repurchased 6.7m shares at an average price of approximately $16.00/share. The extended programme authorises the company to buy back another 12.7m shares, representing 14% of Terra’s outstanding stock.

At around 14:30 GMT, Terra shares were up 67 cents, or 1.6%, at $41.45 on the New York Stock Exchange (NYSE).

($1 = €0.65)

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By: Stephen Burns
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