November 21, 2018
The American office supply company has announced that it is buying back $100 million (€87.7 million) of stock in 2019 to help improve its financial outlook.
According to South Florida Business Journal, the stock repurchase programme will begin on January the 1st, in a move aiming to “increase stock value for shareholders.”
The company has also announced that it has successfully repriced a term loan due in 2022, and that as part of this, it will repay approximately $200 million (€175.4 million), bringing the outstanding balance to $500 million (€438.6 million).
The news follows what has been a difficult few years for the company, following its failed merger with Staples, among other hurdles. Reflecting on the developments, CEO of Office Depot Gerry Smith said: “The strong cash balance that we have built this year also allows us to utilise a portion of our liquidity position to reduce outstanding debt and opportunistically repurchase stock in the future, while still investing in the growth of our business.”
He continued: “I’m very pleased with the transformation that is underway at Office Depot, and we remain committed to our balanced approach to capital allocation and driving total shareholder returns.”
SFBJ reports that the borrowing rate on the term loan was reduced by 175 basis points, with Office Depot stating that the lower applicable interest rate and voluntary repayments are expected to lead to savings of about $21 million (€18.4 million) in 2019 and $79 million (€69.3 million) over the remaining life of the term loan.
Categories : City News