Bezeq seeks NIS 3b. dividend

Half of the dividend will reportedly be used to buy back shares in the company.

By GAD PEREZ/GLOBES
The board of directors of Bezeq Israeli Telecommunication Co. Ltd., controlled by Shaul Elovitch, on Sunday approved an unprecedented dividend of NIS 3 billion and a reduction in shareholders’ equity.
Half of the dividend will reportedly be used to buy back shares in the company. In 2007, under Bezeq’s previous controlling shareholders, Ap- Sab-Ar Holdings Ltd. (the Apax Partners-Saban Capital Group Inc.-Arkin consortium), the company distributed a NIS 1.8b. dividend, which also resulted in a reduction in shareholders’ equity.
Bezeq employees are deeply concerned about the reduction in shareholders’ equity, according to information obtained by Globes. The distribution will require prior approval of the two investment banks, which will have to state that they are unconcerned about Bezeq’s financial soundness and that its credit rating will not fall below AA2.
Paralleling the reduction in shareholders’ equity, Bezeq management, its workers committee and the Histadrut Labor Federation are expected to sign an extension to the company’s collective labor contract. The new contract will include linkage to public sector salaries through 2015, an option to extend for two more years, and extend the current retirement agreements and retirement with increased benefits agreements.
Bezeq employees will also receive options for 70 million shares at a discount or benefit of more than NIS 250 million, and a NIS 50m. bonus, to be paid in two equal installments in January 2011 and January 2012. Bezeq’s management also agreed to give tenure to more than 600 employees over the next two years.