Imperial Oil Limited today announced it has received final acceptance
from the Toronto Stock Exchange (TSX) for a normal course issuer bid
(NCIB) to repurchase up to five percent of its 807,823,922 outstanding
common shares as of June 13, 2018, or a maximum of 40,391,196 shares
during the next 12 months. This maximum will be reduced by the number of
shares purchased from Exxon Mobil Corporation (ExxonMobil), Imperial’s
majority shareholder, as described below.
The new one year program will begin on June 27, 2018, and will end
should the company purchase the maximum allowable number of shares, or
on June 26, 2019.
Imperial has established an automatic share purchase plan with its
designated broker to facilitate the purchase of common shares, both
under the NCIB and concurrently from ExxonMobil, during times when
Imperial would ordinarily not be permitted to purchase due to regulatory
restrictions or self-imposed black-out periods. Before entering a
black-out period, Imperial may, but is not required to, instruct the
broker to make purchases under the NCIB based on parameters set by
Imperial in accordance with the share purchase plan, TSX rules and
applicable securities laws. The plan has been pre-cleared by the TSX and
will be implemented effective June 27, 2018.
Imperial periodically has excess cash beyond its day-to-day operating
and capital investment needs. After considering alternative means of
distributing excess cash to shareholders, Imperial’s board of directors
concluded it is in the best interest of the company and its shareholders
to have the flexibility to purchase shares under the NCIB. The NCIB is a
flexible way of rebalancing Imperial’s capital structure while
distributing a portion of cash reserves to shareholders who choose to
participate by selling their shares. In addition, the NCIB will be used
to eliminate dilution from shares issued in conjunction with Imperial’s
restricted stock unit plan.
ExxonMobil will be permitted to sell its shares to Imperial outside of,
but concurrent with, the NCIB in order to maintain its proportionate
share ownership at approximately 69.6 percent. ExxonMobil advised
Imperial that it intends to participate, as it has in prior years, and
has established an automatic share disposition plan to facilitate the
sale of its shares concurrent with the NCIB.
All share purchases will be made through the Toronto Stock Exchange and
through other designated exchanges and published markets in Canada.
Shares purchased under the NCIB are restored to the status of authorized
but unissued shares.
As of June 13, 2018, Imperial has 807,823,922 issued and outstanding
common shares. The average daily trading volume of Imperial’s common
shares over the six calendar months prior to the date of this
announcement was 826,353 shares per day. Imperial’s daily trading limit
under the new program will be 206,588 shares, which represents 25
percent of the average daily trading volume.
The acceptance marks the continuation of Imperial’s existing share
repurchase program that will expire on June 26, 2018. Under the existing
program, a maximum number of 42,326,545 shares are available for
purchase, reduced by the number purchased from ExxonMobil. As of June
20, 2018, Imperial has purchased 11,881,688 shares on the open market
and a corresponding 27,198,704 shares from ExxonMobil to maintain its
proportionate share ownership at 69.6 percent, representing a total cost
of about $1.53 billion and an average cost of $39.22 per share.
After more than a century, Imperial continues to be an industry
leader in applying technology and innovation to responsibly develop
Canada’s energy resources. As Canada’s largest petroleum refiner, a
major producer of crude oil, a key petrochemical producer and a leading
fuels marketer from coast to coast, our company remains committed to
high standards across all areas of our business.
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