Aker ASA: Board of Directors amends dividend proposal to meet effects of current market situation
The board of directors of Aker ASA recommends amending the previously proposed dividend of NOK 23.50 per share, in response to market developments resulting from the COVID-19 pandemic and collapse in oil demand and activity. The board instead proposes that it is authorized to determine the distribution of dividends based on the 2019 annual accounts, with the aim of semi-annual assessments.
Aker ASA’s board of directors is following the crisis in the Norwegian and global economy closely and is taking the necessary measures to protect shareholder value and continued financial strength to pursue opportunities. The significant decrease in oil prices have led to large reductions in investments and, hence, future activity in the oil and gas industry. These cuts are reducing the revenues for the oil service sector directly, as projects are cancelled and/or postponed.
Due to increased uncertainty following the recommendation on February 13, 2020, the board resolved on March 31 to amend the proposal to ask the general meeting not to conclude on a dividend payment of NOK 23.50. Aker will, hence, book no provision for dividend in the 2019 accounts. Instead, the board proposes that it is authorized to resolve the distribution of dividends based on the company’s annual accounts for 2019, with the aim of making this assessment semi-annually. In its assessment, emphasis will be placed on the market situation and prospects, activity level, investment opportunities and needs, as well as other relevant factors.
Aker ASA’s main shareholder, TRG (68.2 percent shareholding), has recommended that the board considers a distribution of half of the originally proposed dividend, i.e. NOK 11.75 per share, in the second quarter this year. TRG has also expressed willingness to reinvest its proportion of such a dividend in an equity or subordinated instrument issued by Aker ASA. Other shareholders will also be invited to reinvest proportionally in the same instrument (structure and terms to be defined). If the market situation and outlook have stabilized, a similar dividend should be considered by the board in the fourth quarter this year.
“Aker has managed through turbulent times before. A lesson learned is the importance of a strong balance sheet and liquidity position. That’s vital both for weathering the storm, and for turning it into opportunities. The value of a main shareholder with a long-term commitment to the success of Aker ASA is once again demonstrated by the proposal from TRG to reinvest a dividend received in an equity, or subordinated instrument. Other shareholders, often trading the Aker share more frequently, will receive cash and thereafter be invited to reinvest together with other investors in the same instrument. The generous proposal from TRG enables Aker ASA to combine further strengthening its financial robustness and flexibility with maintaining a shareholder-friendly dividend policy,” says Øyvind Eriksen, President and CEO in Aker ASA.
For further information, please contact:
Torbjørn Kjus, Chief Economist & Head of Investor Relations
Phone: +47 94 14 77 30
Atle Kigen, Head of Corporate Communications
Phone: +47 90 78 48 78
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.