North American paper giant Domtar Corp. has increased its share buyback program by $400-million (U.S.), raising the total potential repurchases to $1-billion since 2010.
The Montreal-based producer of uncoated free sheet and specialty papers has already bought about 6.6 million common shares for $536-million since May 2010.
The company has spent more than $600-million to repurchase 15 per cent of its shares and pay dividends over the past 19 months.
Domtar CEO John Williams said the expanded share buyback program will give the company the flexibility to continue its "disciplined capital allocation strategy."
"Our commitment remains to return a majority of future free cash flow to shareholders," he stated.
The timing of the share repurchases will depend on market conditions, as well as corporate and regulatory considerations.
As of Nov. 30, Domtar has 36.8 million outstanding common shares traded on the Toronto and New York stock markets.
Domtar is the largest integrated manufacturer and marketer of uncoated free sheet paper in North America and the second largest in the world based on production capacity. It also manufactures paper grade, fluff and specialty pulp, and employs about 8,800 people.
On the TSX, Domtar shares gained more than 3 per cent, rising $2.47 to $80.05 in midday trading.