America Movil Plans to Split Stock 2 for 1, Pay Out DividendCrayton Harrison
America Movil SAB, the largest wireless carrier in the Americas, proposed a 2-for-1 stock split and a dividend of 36 centavos a share, returning cash to stockholders after completing a $23 billion acquisition in 2010.
The proposals will be submitted for shareholder approval at a meeting by April 30, Mexico City-based America Movil said today in an e-mailed statement. The wireless carrier also plans to increase its share repurchase fund by 50 billion pesos ($4.18 billion), adding to the 35 billion pesos currently in the fund, according to company filings.
America Movil is spending cash on dividends and buybacks after deciding to forgo acquisitions of telecommunications carriers in Serbia and Poland. The company’s liquidity, measured as a ratio of net debt to earnings before interest, taxes, depreciation and amortization, stood at 0.84 at the end of year, below the company’s goal of 1, giving it room to relinquish cash.
The dividend will be paid in two installments and adjusted for the effects of the split, America Movil said. The split is the company’s second in its decade as a public company, after a 3-for-1 division in 2005, according to data compiled by Bloomberg.
Last year, the company acquired Telmex Internacional SAB, the South American phone carrier that, like America Movil, was controlled by billionaire Carlos Slim. The move, part of a $23 billion transaction, gave America Movil land-line networks in Brazil, Colombia, Argentina, Chile, Uruguay, Ecuador and Peru.
America Movil rose 20 centavos to 32.95 pesos in Mexico City trading at 4 p.m. New York time. The shares have dropped 7.1 percent this year.
Largest in Americas
The company has 225 million wireless customers, compared with 95.5 million for AT&T Inc. and 94.1 million for Verizon Wireless, which is co-owned by Verizon Communications Inc. and Vodafone Group Plc.
America Movil sold $8.6 billion in long-term debt, including bonds issued in Mexico and internationally, last year to help fund the acquisition of Telmex Internacional and its holding company Carso Global Telecom SAB, which also gave it control of Mexican carrier Telefonos de Mexico SAB.
The company is in discussions with banks for two loans of about $2 billion apiece, an America Movil official who can’t be identified under company policy said yesterday. Bank of Tokyo-Mitsubishi UFJ Ltd., Mizuho Financial Group Inc., Banco Bilbao Vizcaya Argentaria SA, JPMorgan Chase & Co., Intesa Sanpaolo SpA, Citigroup Inc. and Societe Generale are involved in the discussions for the loans, one of which would be denominated in euros, the official said. Reuters reported the discussions earlier.
Slim and his family own about 43 percent of America Movil’s shares, including voting shares that give them control of the company. Dallas-based AT&T also holds a 9 percent stake and a minority of the voting shares.
America Movil represents about two-thirds of Slim’s $72 billion in publicly disclosed holdings, according to data compiled by Bloomberg.
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