The buy-back is expected to double gearing to around 60 per cent, but it should result in a 7 per cent enhancement to earnings in a full year.
Gordon McPhie, finance director, said it was a reward for shareholders who backed the pounds 815m acquisition of the English assets of British Coal at the end of 1994.
"It's a good buy-back and I think very few people thought we could do this when we bought English Coal 18 months ago." He said it would not affect management share options, which became exercisable from the beginning of June.
The purchase, handled by the company's brokers Barclays de Zoete Wedd, lowered RJB's shares 13p to 540p yesterday. It coincided with a statement revealing that coal sales had slipped by 1 million tonnes to 20 million tonnes in the first half of 1996.
Comment, page 23
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