(Bloomberg) --
Yara International ASA will buy back 5% of its shares, valued at $530 million based on current prices, once it has completed the sale of its stake in Qatar Fertiliser Co., the Norwegian fertilizer maker said.
The purchases are expected to start within two to three weeks, following the completion of its $1 billion transaction with Qatar Petroleum, Yara said in its second-quarter report on Friday. The Oslo-based company had said in March it would consider extraordinary dividends and/or buybacks following the deal.
“Yara's financial situation is robust, with strong cash flow from operations and declining capital expenditure due to strong capital discipline,” the company said. “The board will consider further cash returns in connection with Q3 and Q4 results, in line with its capital allocation policy.”
Yara will buy 3.2% of its outstanding shares in the market by the end of the first quarter, with the Norwegian government -- which owns 36% of the company -- selling a proportionate stake separately.
“With an expected 10 billion kroner in gross proceeds from the Qafco sale and some 5 billion kroner coming out of the buy-back program, we believe the potential extraordinary dividend payments in Q3 and Q4 could also be in the magnitude of about 5 billion kroner,” DNB analyst Niclas Gehin said in a note after the results.
Yara rose as much as 3.4% in Oslo and was trading 3.3% higher at 361.60 kroner as of 9:45 a.m. local time.
Read more: Yara to Start Buyback of 5% of Shares After $1b Qafco Sale
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