Vimpelcom Ltd slashing dividends to $0.035 from $0.8 in from 2014 to reduce debt
MOSCOW. Jan 28 (Interfax) - Vimpelcom Ltd has decided to slash dividends in order to reduce debt.
The telecom holding said in a statement that its board had approved a new dividend policy pursuant to which from 2014 the company aims to pay annual dividends of $0.035 per share until it reaches a group net debt to EBITDA ratio of under 2x.
The board also decided that the company will not make a final 2013 dividend payment.
"In taking its decision to adjust the dividend policy the supervisory board considered various factors, such as the company's desired leverage and investment levels, consistent with the conditions set forth in the company's prior dividend policy. The precise timing of dividends for a particular year will be determined by the Supervisory Board in the future," Vimpelcom said.
Vimpelcom paid the first tranche of dividends for 2013 - $0.45 per share ($791 million in all) - at the end of last year. It planned to pay the final dividend tranche of $0.35 per share following the announcement of results for 2013.
Vimpelcom's previous dividend policy for 2011-2014 called for paying shareholders no less than 50% of the annual free cash flow in Russia and Ukraine (a minimum of $0.8 per share). Vimpelcom paid $0.8 per share for 2011 and 2012. The dividend payout totaled $1.2 billion in 2011, $1.3 billion in 2012, and $1.4 billion in 2013 (following conversion of Vimpelcom preferred shares held by Altimo into ordinary shares). The company also paid to shareholders $1.4 billion received from Altimo during the share conversion.
Under the new dividend policy, Vimpelcom will pay just $61.5 million in dividends a year.