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Sims Metal Management has announced it will buy back up to 10 per cent of issued capital, in a move likely to support its share price.
The company said it will spend about $147 million on the buyback over the next 12 months, based on Tuesday''s closing price of $7.19 a share.
Sims shares have tumbled nearly 30 per cent over the past week after the world''s largest scrap-metal recycler issued a profit warning.
Sims last week said it would take a $230 million impairment charge against its assets, on the back of a sharp fall in scrap metal prices since August.
The writedown would likely drive it to a loss in the six months to December, the company said.
"This buyback reflects the confidence the board has in the outlook for the business, and the attractive underlying value of the operations relative to current market prices," chief executive Galdino Claro said on Wednesday.
The company said it had identified around 35 facilities that it may close or sell if return on capital targets can''t be met, in an effort to counter the slump in scrap-metal demand.
Most of these actions will be completed by the end of the current financial year, and would result in savings of around $130 million a year, it said.
Sims had posted a jump in 2014/15 net profit to $109.9 million, although its revenue had slipped 10 per cent over the year. At the time, the group warned of external challenges from a collapse in commodity prices and lower volumes.
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