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Tim Hortons to buyback 10% shares by raising $1bn debt

RBR Staff Writer Published 09 August 2013

US restaurant chain Tim Hortons plans to repurchase 10% of its publicly floated shares through a bank debt or newly issued bonds.

Announcing the second quarter results, the company said that the board has approved $900m additional debt, to take advantage of a strong balance sheet and cash flows.

Tim Hortons said in its financial statement that it is targeting $1bn in share repurchases over the next one year, including the remaining authorization in the existing program, and the deployment of the $900m in planned debt proceeds.

"We expect our credit metrics to remain investment grade following the recapitalization, thereby preserving our strong balance sheet, cash flows, and access to capital as we pursue our strategic planning work," the company added.

Systemwide sales of the company rose 5% in the second quarter with new restaurant openings in Canada and the US. Tim Hortons opened 233 restaurants in the past year. Operating income increased by 11.2% to $176.6m in the quarter from $158.8m in the same period last year.