One of Australia’s iron ore majors, Fortescue Metals (ASX:FMG) announced a $500 million buy-back program to focus on operating performance and new investment.
The buyback will kick off after the 25 October for up to 12 months and be funded by its operating cash flows.
FMG’s CEO says buying back shares is a natural extension of its capital allocation, which has now shifted from debt reduction (with its gross debt at US$4 billion), after the company de-geared its balance sheet, taking its net gearing to 24 per cent.
Turning to what brokers say about the company, UBS has the miner as a buy with a price target of $5.75.
All this comes as the iron ore price is at a three-month high US$70.39.
Shares in Fortescue Metals (ASX:FMG) are trading 0.54 per cent lower to $3.65