Contact Energy to Pay Special Dividend to Shareholders
Published By : 25 May 2015 | Published By : QYRESEARCH
The shares of Contact Energy went up by more than 12% on the news, which stated that the shareholders will be getting a big 50 cents per share as a special dividend in the next month. On Monday morning, the share of Contact Energy in the initial leaped around 80c to $6.34, before closing at $6.23, just after Contact got away from their potential plans to make heavy investments offshore.
The Contact Energy Company has spent some recent months in making decisions if they want to make an investment and spend up to US$1 billion on geothermal generation overseas in the coming five to six years. Later on Monday, the company stated there were no as such material investment opportunities in the present scenario, which would significantly reward the shareholders, so it was just giving some cash back to the investors.
The value of the mentioned special dividend is around US$367 million with the major share that will be going to 53% shareholder Origin Energy of Australia, which in the previous month suffered a downgrade of credit rating by Standard & Poor's.
Andrew Bascand, the managing director of Harbour Asset Management informed that this special dividend was actually a big tick for the company and the size of the 50c per share pay was quite larger than what they would have anticipated earlier in the year.
Andrew Bascand further believed that it was never the intention of the Origin Energy's (parent company) for Contact Energy to grow up to US$1 billion or any amount of money on greenfields geothermal projects overseas.
He further stated that he thinks Origin Energy requires some amount and they have just had a downgrade in their credit ranking. The Origin credit rating went down may have brought forward the special dividend of Contact timings.