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Infratil plans $65 mln share buy-back to plump up price, flags more dividend growth

Friday 27th September 2013

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Infratil, the listed infrastructure investment firm which sold down its stake in Z Energy last month, is planning a $65 million share buy-back programme as it looks to boost the price of its stock, and said shareholders can expect to see more dividend growth in coming years.

The Wellington-based firm, managed by investment bank Morrison & Co, plans to buy back up to 24.8 million shares at $2.60 apiece, a 6.6 percent premium to the share price before today's announcement. Based on Infratil's internal valuations of its investment portfolio, it says the shares are worth between $3.08 and $3.69. The shares gained 3.6 percent to $2.53 today.

"A buyback at this level will largely preserve capital capacity for business developments and new investments and leave capacity to increase future dividend payments (assuming future profitability and returns meet target levels)," the company said in a statement.

Earlier this month Infratil chief executive Marko Bogoievski told BusinessDesk it was mulling a share buyback after reaping $398 million from its sell-down and listing of petrol station chain Z Energy.

Infratil's dividend returns have grown 48 percent in the past five years to 9.25 cents per share, and the company expects this rate of growth to continue over the next two to three years due to its outlook and surplus of imputation credits, it said.

The company said it is aware of "adjacent investment opportunities in water and irrigation and it will increasingly look to enter positions in its core sectors in markets where compelling investment cases are evident."

It also said public-private partnership space may offer investment options in the near term, with an initial investment under active investigation.

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