Dynegy Suspends Dividends
Aug. 12, 2002
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HOUSTON (AP) _ Dynegy Inc. announced Monday that it will not pay dividends in the third quarter and has no plans to reinstate them ``in the near term.''
The Houston-based energy marketer said in a filing with the Securities and Exchange Commission that its board of directors elected to suspend dividends to focus on the company's plan to raise $2 billion to strengthen finances and improve its image on Wall Street.
Dynegy said when the plan was unveiled in June that dividends would be cut in half.
The board subsequently decided that ``in an effort to further support our ongoing capital and liquidity plan, Dynegy would not pay a dividend on its common stock in the third quarter,'' said spokesman John Sousa. ``Payment of the dividend for future periods will be determined by our board of directors.''
Dynegy expects the sale of its 16,600-mile Northern Natural Gas pipeline to MidAmerican Energy Holdings Co. to close this month. Dynegy announced last month that MidAmerican, owned in part by billionaire Warren Buffett's Berkshire Hathaway Inc., would buy the pipeline for $928 million in cash and assume its $950 million in debt.
Dynegy acquired the pipeline from bankrupt Enron Corp. in January in exchange for a $1.5 billion investment in the failed energy giant before a merger of the two collapsed in late November.
Dynegy shares dropped 20 cents, or 11 percent, to $1.56 in afternoon trading Monday on the New York Stock Exchange.