NEW YORK (AFX) - Alcoa Inc. has authorized a share repurchase program, an increase to its annual dividend and steps to manage its debt maturity schedule and modify and strengthen its capital structure, including extending maturities.
The company said it will buy back up to 10 pct of the company's outstanding common stock, or approximately 87 mln shares and a more than 13 pct increase in the company's dividend on its common stock from 0.60 usd per share to 0.68 usd annually.
Alcoa also approved steps to manage its debt maturity schedule and modify and strengthen its capital structure and involve: a proposed public offering under Alcoa's shelf registration statement of up to 2.0 bln usd of new Alcoa senior notes; a proposed cash tender offer for any or all of Alcoa's outstanding 4.25 pct Notes due Aug. 15, 2007 (approximately 790 mln usd outstanding) and a proposed liability management transaction extending a portion of Alcoa's notes into discrete longer term maturities.
The net proceeds from the proposed public offering will be used by Alcoa to reduce its outstanding balance of commercial paper, to fund amounts payable in connection with its cash tender offer for its outstanding 4.25 pct Notes due Aug. 15, 2007, and for general corporate purposes.
The share repurchase program and the increased common stock dividend --
along with the company's numerous growth project programs -- will be funded through Alcoa's strong cash generation and the company's commitment to maintaining its previous stated target of a conservative debt-to-capital ratio of between 30 to 35 pct.
In 2006, Alcoa's cash from operations was 2.6 bln usd, a more than 50 pct increase in cash from operations from 2005. That includes the impact of discretionary pension contributions of 200 mln usd.
The company's debt-to-capital ratio at the end of the year stood at 30.6 pct. newsdesk@afxnews.com joy COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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