Billion-dollar buyback begins

Danish shipping and oil giant AP Moller-Maersk is preparing to launch the first phase of a share buy-back that will eventually see up to $1bn of its capital cancelled.

The DKK 5.6bn ($1bn) programme was announced earlier this month and will be carried out over 12 months.

The first phase begins on 1 September and runs to 30 November.

The owner will spend up to $400m on a maximum of 50,000 A shares and 200,000 B shares.

Lead manager Nordea will act independently to the company in acquiring the stock.

The company currently holds just 108,865 B shares, equal to 0.5% of the share capital.

But the idea is to adjust the capital structure and be able to offer share-based incentives to staff.

A and B shares will be acquired in a 20/80 split that reflects the current trading volumes.

The shares will be cancelled after an annual general meeting in 2015.

Major shareholder AP Moller Holding will sell shares, but intends to maintain its ownership of 51.2% of A shares and 41.5% of the total share capital of the company.

CEO Nils Andersen said earlier this month the move fitted a strategy to return capital to shareholders.

“When we look at our five-year investment plans we do have room for this buyback having in mind we now have equity above $40bn and debt below $10bn,” Andersen said. “We feel well equipped to do this and it will not in any way impair our ability to grow.”