Gordon McPhie, finance director, said the proposed buyback would enhance earnings per share by about 2 per cent at the current share price. He said the move, which followed a purchase by the company of 10 per cent of its shares in July, was unrelated to the plunge in the share price, which at one point sent the shares as low as 372.5p, compared with a high for the year of 625p and yesterday's close of 439p.
The sharp fall is, however, understood to have driven a wedge between BZW and a number of institutions who invested in RJB in 1994 when it acquired most of British Coal's assets. Two weeks ago, however, BZW reduced its forecast for 1997 from pounds 196m to pounds 185m and for 1998 from pounds 232m to pounds 192m, bringing it into line with other brokers who had taken a less sanguine view of the impact of a stronger pound on RJB's competitiveness relative to foreign coal producers.
Meanwhile, shares in heavily indebted coal miner NSM were suspended at 8p yesterday pending details of the proposed sale of its Clee Hill plant hire subsidiary, other planned disposals and further information on its ongoing discussions with its banks.
NSM said it had completed the disposal of Clee Hill Plant in a deal which would reduce its debts by about pounds 5m.
Having traded as high as 80p earlier in the year, NSM's shares fell by a third last week after the company revealed details of a pounds 72m first-half loss and said the future of its south Wales deep coal mine was dependent on the outcome of talks with its bankers.