Equinor ASA (NYSE:EQNR) surges over 6.52% to $31.19 in pre session on Wednesday as the firm announced in the Capital Market Update on February 8, 2023, the firm will begin the first tranche of around USD 1 billion of the 2023 share buy-back program on February 9, 2023.
The first tranche of the share buy-back program for 2023 is expected to be around USD 1 billion; including shares redeemed from the Norwegian State, and will end no later than March 24, 2023. Equinor announces a USD 6 billion share buyback program for 2023, including shares redeemed from the Norwegian State.
The share repurchase program is expected to be implemented when the Brent Blend oil price is in or above the 50-60 USD/bbl range, Equinor’s net debt ratio (excluding IFRS 16 leases) remains within the communicated ambition of 15-30%, and commodity prices support this. Following the first tranche in 2023, subsequent share buy-back tranches are subject to Board of Directors resolution for each new tranche, renewal of the share buy-back authorization at the annual general meeting on May 10, 2023, and renewal of a separate agreement with the Norwegian State described below.
The share buy-back program’s goal is to reduce the company’s issued share capital. All repurchased shares under the program will be cancelled.
According to the existing agreement between Equinor and the Norwegian State, at the annual general meeting in 2023, a proportionate share of the Norwegian State’s shares in the first tranche will be redeemed and annulled. Following the renewal of this agreement, subsequent tranches of the 2023 share buy-back program will be redeemed and cancelled at the 2024 annual general meeting, ensuring that the State’s ownership interest in Equinor remains at 67%.
In this first tranche, approximately USD 330 million in market shares will be purchased, implying a total first tranche of approximately USD 1 billion, including redemption of shares from the Norwegian State. Equinor is entering into a non-discretionary agreement with a third party for the first tranche in 2023, which will make trading decisions independently of the company.
Equinor has an agreement with the Norwegian State under which the State will vote to cancel shares purchased under the authorization and redeem a proportionate number of its shares in order to maintain its ownership percentage in the company. The price paid to the State for share redemption shall be the volume-weighted average of the price paid by Equinor for shares purchased in the market plus interest rate compensation, adjusted for any dividends paid, in the period up until final settlement with the State.
