Euronav has made its first share buyback move after winning permission from investors in May.
The New York and Brussels-listed tanker giant said it had acquired its own stock on both exchanges in deals worth $28.1m for 3.38m shares.
The company now owns 8.32m — nearly 4% — of its own shares.
"Euronav remains committed to its guidance ... to target a return of at least 80% of net income to shareholders per quarter," the tanker owner said.
This will mainly be through dividends.
But Euronav added that it will always look at stock repurchase as an alternative if it believes more value can be created that way.
The company said it made the move this week "as the share price is currently trading well below the company’s own evaluation of intrinsic value".
"Indeed, a Euronav share price of $9 translates into a newbuild VLCC valuation of just $68m compared to a current valuation of $89m," Euronav said.
The stock closed down 2.9% in New York on Thursday at $8.40, giving a market cap of $1.85bn. This figure was $2.16bn when the approval was given for the buyback in May.
Euronav said it will monitor market conditions to decide whether to continue buying back shares.
The shipowner has now brought in Clarksons Platou Securities to act as an independent broker on the deals.
Strength in the balance sheet
The shipowner said the buybacks "reflect the strength of Euronav’s balance sheet and the confidence of the supervisory board and the management board in the long-term value in the company’s shares".
Euronav stressed that it is using net profit for the deals and its liquidity will not be affected. It is retaining 20% of earnings.
At the end of the second quarter, the company had liquidity of $1.09bn.
Euronav needed three shareholder votes to gain permission for the repurchases. It can now buy up to 10% of the shares over five years.
Investors had first rejected a plan to buy back up to 20% of its stock in March.
This prompted Euronav to reduce the capital return scheme to 10% to address shareholder concerns ahead of an April vote, which it again lost.
The tanker owner has said the scheme will not be used by the supervisory board as an "anti-takeover defence".
