Portugal Telecom is planning to pay an exceptional dividend of E1.65 a share on the back of its E7.5bn divestment in Brazilian mobile operator Vivo.
Announcing 3Q 2010 results yesterday, PT said the stake sale to Spanish incumbent Telefonica helped boost…
Portugal Telecom is planning to pay an exceptional dividend of E1.65 a share on the back of its E7.5bn divestment in Brazilian mobile operator Vivo.
Announcing 3Q 2010 results yesterday, PT said the stake sale to Spanish incumbent Telefonica helped boost its net income for the quarter to E5.3bn, compared with E116m for the corresponding period last year.
The company said it will pay E1 per share in December, providing it receives board approval, and the remaining E0.65 per share in May 2011, which is subject to Annual Shareholders’ Meeting approval.
In addition, an ordinary cash dividend of E0.65 per share has been proposed for the fiscal years ending December 31, 2010 and 2011. This represents a 13% rise to an initial commitment of E0.575 for the same period.
According to PT, its remuneration proposal reflects the sale of its shareholding in Vivo and also its proposed E3.8bn investment in Oi, another Brazilian telecoms company.
The two companies are still thrashing out the finer points of this deal, which will see PT acquire a 22.4% stake in Oi. In turn, Oi will take a 10% stake in PT.
Fitch analyst Stuart Reid said: “Combined with a potential restructuring of pension liabilities and the completion of the proposed Telemar investment, Fitch expects Net Debt to EBITDA to increase to around 2.5x – 2.6x in 2011, before trending down moderately in the following two years, levels that are in line with the existing ratings.”
