Qantas said it would accelerate A$650 million (US$675 million) in debt repayments and buy back shares worth A$100 million in a bid to shore up its ailing stock and boost confidence.
The Australian airline’s chairman Leigh Clifford said the on-market buyback, which represents about four percent of total Qantas stock, and early debt repayment reflected the board’s confidence in the carrier’s improving fortunes.
“Our continued progress towards the turnaround strategy for Qantas International, plus cash inflows from recent transactions, gives the board confidence to approve these capital management measures,” Clifford said.
“The share buy-back and accelerated debt reduction reflect the board’s goal of returning value to shareholders and maintaining a strong balance sheet, as well as retaining the flexibility to pursue current growth initiatives.”
The A$650 million debt repayment five months ahead of schedule was part of a A$1 billion debt reduction drive for the 2012-13 financial year, Qantas added in a statement to the Australian stock exchange.
Both it and the share buyback would be funded by the recent sale of Qantas’s stake in freight company StarTrack and settlement from Boeing on its B787 order, which had brought $750 million into the company’s coffers, it said.