Friday, June 11, 2010

BP plans to defer dividend after pressure from Obama :) $BP

BP is preparing to defer payment of its next dividend to shareholders by placing the money in an escrow account until the full scale of the company’s liabilities from the Gulf of Mexico disaster can be determined, The Times has learnt.
BP board members are discussing a plan that would see the expected £1.7 billion second quarter payout, due to be announced on July 27, delayed until the crisis can be brought under control, relieving some of the political pressure on the oil giant, formerly Britain’s biggest company.
Further quarterly payments could also be treated in the same way until the company is on a firmer footing, according to people familiar with the situation.
While final approval for the plan is likely to be given by BP’s board next month, a growing number of BP directors now recognise that the move may be essential in order to placate US public opinion.
“We are considering all options on the dividend. But no decision has been made,” BP Chief Executive Tony Hayward said today in an interview with The Wall Street Journal.

As one of Britain’s biggest companies, BP is a mainstay of almost every UK pension fund. The company’s dividend payments amount to more than £7 billion a year - or £1 in every £6 paid out in dividends to British pension funds.
But BP, which has not cut its dividend in 18 years, has come under fierce pressure from President Obama and his administration to suspend its payouts, a key reason for the sharp decline in the group’s share price in recent days.
Shares in BP plummeted to 14-year lows in US trading on Wednesday and the company has lost over one third of its market value.
The company’s first quarter dividend payment will be made as planned on June 22 and remains unaffected.
The plan to suspend the dividend comes as BP seeks to repair relations with Washington DC which have become increasingly fraught in recent days.
Carl-Henric Svanberg, BP’s Swedish chairman, is set to travel to the US next week for a meeting with Mr Obama and in a clear change to the company’s public handling of the spill, it is also understood that Bob Dudley, an American BP executive, is now set to take a leading role in handling the crisis in the US.
The company has acknowledged internally that its public relations operation after the spill, which has been fronted by British chief executive Tony Hayward, has been a failure.
Mr Hayward has become the target of fierce personal attacks including a call from President Obama that he should be fired over his handling of the spill.
BP declined to comment.

No comments:

Post a Comment