Domtar Corporation announced that its Board of Directors approved a 7% increase to its quarterly dividend (from $0.375 per share to $0.40 per share) on its common stock. The Board of Directors declared the dividend payable on April 15, 2015 to stockholders of record as of the close of business on April 2, 2015.
In the context of its regular review of the capital allocation policy, the Board of Directors also authorized an increase of $300 million in Domtar's share buyback program. This is in addition to the Company's prior $1 billion repurchase authorization, under which approximately $83 million remained available as of December 31, 2014.
"Our new share repurchase program and dividend increase reflect our confidence in our continuing ability to generate earnings growth and cash flow in the future," said John D. Williams, President and Chief Executive Officer. "We will continue to pursue a balanced approach to the deployment of our capital, while maintaining the flexibility to execute on our growth strategy."
Under the share buyback program, the Company is authorized to repurchase from time to time shares of its outstanding common stock on the open market, or in privately negotiated transactions in the United States. The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions, as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified or discontinued at any time, and the Company has no obligation to repurchase any amount of its common stock under the program. The Company had common stock issued and outstanding of 63,749,297 shares as of January 31, 2015.
Domtar Corporation designs, manufactures, markets and distributes a wide variety of fiber-based products including communication papers, specialty and packaging papers and absorbent hygiene products. The foundation of its business is a network of world class wood fiber converting assets that produce papergrade, fluff and specialty pulps. The majority of its pulp production is consumed internally to manufacture paper and consumer products. Domtar is the largest integrated marketer of uncoated freesheet paper in North America with recognized brands such as Cougar®, Lynx® Opaque Ultra, Husky® Opaque Offset, First Choice® and Domtar EarthChoice®. Domtar is also a leading marketer and producer of a broad line of absorbent hygiene products marketed primarily under the Attends®, IncoPack and Indasec® brand names. In 2014, Domtar had sales of $5.6 billion from some 50 countries. The Company employs approximately 9,800 people.
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