Royal Dutch Shell plc has announced the commencement of trading in the second tranche of its share buyback programme previously announced on July 26, 2018. The company’s intention is to buy back at least $25 billion of its shares by the end of 2020, subject to further progress with debt reduction and oil price conditions.
On October 19, 2018 the company completed the first tranche of its share buyback programme (the ‘initial tranche’). In aggregate between July 26, 2018 and October 19, 2018, the company repurchased 60,844,806 A ordinary shares for an aggregate consideration of $2 billion.
The maximum number of ordinary shares which may be purchased by the company under the second tranche of its share buyback programme (the ‘second tranche’) is 773,155,194, which is the maximum pursuant to the authority granted by shareholders at the company’s 2018 Annual General Meeting minus the number of ordinary shares purchased in the initial tranche.
In the second tranche, the company has entered into an irrevocable, non-discretionary arrangement with a broker to enable the purchase of A ordinary shares and/or B ordinary shares for a period up to and including January 28, 2019. The aggregate maximum consideration for the purchase of A ordinary shares and/or B ordinary shares under the second tranche is $2.5 billion. The shares bought back under the second tranche will be whichever of the A ordinary shares and/or B ordinary shares is economically the least expensive on a given trading day.
The broker will make its trading decisions in relation to the company’s securities independently of the company. The second tranche will be carried out on the London Stock Exchange and/or on CBOE Europe Equities and will be effected within certain pre-set parameters. It will be conducted in accordance with the company’s general authority to repurchase shares granted by its shareholders at the company’s Annual General Meeting held on May 22, 20181, and in line with Chapter 12 of the Listing Rules, Article 5 of the Market Abuse Regulation 596/2014/EU dealing with buyback programmes and the Commission Delegated Regulation (EU) 2016/1052.
The purpose of the second tranche is to reduce the issued share capital of the company to offset the number of shares issued under the Scrip Dividend Programme and to significantly reduce the equity issued in connection with the company’s combination with BG Group. All shares repurchased as part of the second tranche will be cancelled.
Any further tranches of the buyback programme, which may be conducted after completion of the second tranche, will be announced in due course.