MegaFon must reinvest in growth, not pay high dividends - USM
MOSCOW. Oct 26 (Interfax) - MegaFon has paid high dividends over the last several years and the time has come to reinvest profit in company development, said board chairman Ivan Streshinsky, who represents the interests of the controlling shareholder, USM Group.
"Since 2013, MegaFon has paid dividends that exceed market expectations. In parallel, it spent over $3 billion to acquire assets, investing in growth of the network. As a result, the debt burden has grown substantially. The time has come to reinvest in the company's development to maintain its competitiveness and financial stability," Streshinsky said in an interview with the newspaper Kommersant.
"In this connection, excessive sterilization of MegaFon's cash flow, particularly payment of dividends, is at odds with the strategic goals of the company and USM as its controlling shareholder," he said.
At the same time, Streshinsky emphasized that "the board of directors approves the dividend recommendation and a majority of the shareholders approve the dividend payment" and that he was only expressing USM's point of view.