FRANKFURT (Reuters) -- Daimler will resume share buybacks after a temporary pause, the German carmaker said, outlining plans to spend up to 6 billion euros ($9.31 billion) to repurchase 10 percent of its stock.

 

Shares bought back by April 8, 2009 -- perhaps via derivatives as well -- will be canceled or used for stock option plans, a company statement said today.

 

"Daimler's capital structure is to be further optimized with the goal of reducing the use of equity capital, which is more expensive than debt capital. This will avoid investment decisions being limited by excessively high capital costs," the statement said.

 

Daimler shares gained as much as 4.8 percent on the news and were up 3.8 percent to 45.33 euros by 11:01 CET, making them the leading gainer among German blue chips. They had traded as high as 78.85 euros last October.

 

Daimler had said last week it would restart buybacks this year after having suspended repurchases temporarily given the turmoil on financial markets.

 

Flush with cash after selling a majority stake in ailing U.S. carmaker Chrysler last year, Daimler bought back just under 10 percent of its shares for nearly 6.2 billion euros by the end of March for an average price of 62.11 euros per share.

 

Shareholders in April authorized the company to buy back another 10 percent of the company's shares. This authorization remains in force until October 9, 2009.

From: Automotive News Europe