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UBS cuts dividend by a third |
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UBS announced a cut its dividend by a third, based on current stock prices, as it moved to a stock dividend from cash to shore up its capital.
UBS said that it would pay shareholders one new share for every 20 shares they owned. The stock dividend represents a cash equivalent of roughly CHF 1.69 per share, based on the bank’s closing share price of April 15, which is about 32% below the total CHF 2.50 per share paid out in 2006. If the shares rise between now and May 15, when an automatic exchange of entitlements for shares takes place, the value of the stock dividend will rise. It is seeking to raise CHF 39 billion in new capital and had previously stated that it would try to keep the value of the stock dividend on par with the 2006 cash dividend. But UBS shares have fallen about 36% since the start of 2008 as its write-down problems mounted, making it increasingly difficult for the bank to offer enough stock to match previous cash dividends. The dividend entitlements would be traded on the SWX exchange starting April 28 and through to May 9, UBS said. Entitlements held after that will be automatically exchanged into shares. (Source – Reuters)
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