31 July 2013 23:51 [Source: ICIS news]
HOUSTON (ICIS)--The Toronto Stock Exchange has approved PotashCorp's share purchase programme by which up to Canadian dollars (CAD) $2bn ($1.9bn, €1.4bn) of outstanding shares will be returned to the company, the fertilizer producer announced on Wednesday.
The amount of repurchases represents 5% of PotashCorp’s outstanding common shares and will be conducted over a one-year period. Company officials said these shares will be acquired at the market price at the time of purchase, and the repurchased shares will be effectively cancelled.
At this time, there is the potential for over 43m common shares to be returned to the fertilizer producer.
“The actual number of common shares that may be repurchased under the programme, and the timing of any such repurchases will be determined at the discretion of PotashCorp,” said the company in a statement.
“PotashCorp believes that from time to time, the purchase of common shares at the prevailing market price is in the best interests of the corporation.”
The approval by the Canadian stock regulators comes on the heels of potash stocks plunging with the announcement that Russian producer Uralkali is withdrawing from its own exports sales group and will now direct all its export business through its own Uralkali Trading.
Uralkali also added more shock to the market when the producer further predicted a steep decline, by as much as 25%, in pricing for the crop nutrient.
The action and commentary from Uralkali caused a strong reaction from traders, who quickly tried to backpedal away from the stocks of fertilizer producers involved in potash.
On Wednesday, shares of PotashCorp fell 8.5% to close at CAD $29.88, which is a three-year low for the producer.
($1 = €0.75, $1 = CAD $1.03)
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