The share buy-back plans come months after the company had fought a running battle with the industry regulator, Clare Spottiswoode, over pipeline charges. Mr Giordano insisted the money would come by raising BG's debts to pounds 5bn. "We don't have the money in the till to buy back the shares. We have to borrow," he said.
The anticipated flak over the move largely failed to materialise, with the Gas Consumers Council suggesting the buy-back, which would replace expensive equity with cheaper debt, could be good for customers. Unison, one of the main gas unions, called for a meeting with the company to explain why it could afford a buy-back when cutting 2,500 jobs.
Shares in BG fell 10p to 258.5p yesterday as investors digested the company's announcement of a big cut in its dividend. The payout to 1.4 million investors will fall this year from 14.5p to 8p, slashing the company's dividend bill from pounds 640m to pounds 320m. The reduction follows the Monopolies and Mergers Commission's call for big cuts in BG's pipeline charges, which will reduce annual revenues by some pounds 650m.
The company refused to be drawn yesterday on continued haggling over the price formula with Clare Spottiswoode, the regulator. She is proposing to cap BG's pipeline revenues, a move that the company claims would go beyond the MMC's findings.
The news came as BG announced half-yearly losses of pounds 28m, after including a pounds 514m charge to cover the windfall utility tax. Earnings were pounds 486m before the windfall tax bill, though warmer winter weather knocked pounds 104m off profits.
BG's Exploration and Production business announced profits of pounds 57m, a strong improvement from losses of pounds 26m the year before.
Separately yesterday Ms Spottiswoode revealed that 500,000 domestic customers had switched from British Gas to new suppliers in competition trials covering 2 million homes in the south of England.Reuse content