Russian oil firm Sibneft, soon to merge with rival Yukos, surprised the market yesterday by announcing a huge $1 billion half-year dividend, sending its shares soaring.
Analysts said Sibneft's core shareholders were pumping liquidity out of the company as the firm's major shareholder, Roman Abramovich, governor of remote eastern region of Chukotka, was diversifying into other sectors, including investment in top English soccer club Chelsea.
They also said the move meant Yukos will now have to spend more money on dividends and borrow heavily from international markets as the cash-rich giant had previously agreed with indebted Sibneft to align their assets to debt ratio.
Sibneft, which already holds the record for the biggest annual dividend in Russia $1.09 billion for 2002 said in a statement it would pay $1.006 billion or $0.21 per share for the first half of 2003, based on first-half operating results.
"The payment of interim dividends is an extension of our philosophy of distributing profits to shareholders," the statement quoted Sibneft's president Eugene Shvidler as saying.
"Sibneft strives to provide maximum returns for shareholders, after setting aside funding for its investment programme and financial obligations."
"It may mean that Sibneft's free cashflow will be much higher this year. On the other hand it could mean that Yukos will have to distribute more cash prior to the merger," he added.
Sibneft offers $1b dividend; shares soar
Sibneft offers $1b dividend; shares soar