Rubicon rewards with buyback plans

By Phil Boeyen, ShareChat Business News Editor

Monday 11th June 2001

Bio-tech stock Rubicon (NZSE: RBC) has announced a $40 million buyback plan at the same time as selling its Brisbane fuels business for $23 million.

Rubicon says the Brisbane investment - part of the assets it received in the Fletcher restructuring - will be sold to Neumann Petroleum and should be settled by the end of the month.

CEO, Luke Moriarty, says the sale represents excellent value for shareholders, with the price received for Brisbane alone, exceeding Rubicon's NZ$20 million total acquisition cost for both the Challenge service station network in New Zealand and the Brisbane businesses combined.

The Brisbane sale follows the disposal of Rubicon's shareholding in the New Zealand Refinery and the sale of its Capstone Turbine shares.

Oil company Caltex is currently seeking Commerce Commission approval to acquire the Challenge fuels business from the company.

Mr Moriarty says the decision to fund a share buyback reflects a desire to quickly close the gap between the current net asset backing of the company's share price.

"We see the best use of Rubicon's cash today, and the best investment we can make for shareholders, is to buy-back our own shares.

"In addition, we stated clearly in our Prospectus and Investment Statement that where significant success is achieved we would look to return value to our shareholders in cash."

Mr Moriarty says the decision to buy back $40 million dollars of shares equates to a cash return of around 11.25 cents per share.

Details of the buyback are due within a month.

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