FastWeb's board of directors approved on Friday March 23 a total dividend payment of 300 million euros to its stock holders in the face of a consolidated net loss of 123.6 million euros for 2006. FastWeb has the cash for the dividend because it spent less on its network expansion than was originally budgeted.
This dividend will be 3.77 euros per share and will take place on October 25, 200. More than 50 million euros of this dividend will go to Silvio Scaglia, FastWeb's founder and largest share holder.
This dividend is being made because FastWeb could not find a buyer during a search in 2005. It gives Scaglia a way of pulling a significant amount of cash from his FastWeb holdings. Other than to satisfy Scaglia, it was never clear why this was a good idea for FastWeb.
Of course, the Swisscom will make this moot. Scaglia should wind up with more than 500 million euros of cash from that deal when it closes.
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