Orange franchisee Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) today announced that it has cancelled its dividend policy for 2012. The move comes after Hutchison Whampoa Ltd. (HKSE: 0018) cancelled its planned acquisition of 75% of Partner's parent company Scailex Corporation (TASE: SCIX; Pink Sheets:SCIXF) from Ilan Ben-Dov. In addition, Standard & Poor's Maalot Ltd. placed Partner's bonds on its watch list with an AA minus rating and "Negative" outlook.
Partner said, "Further to the board of directors' previous resolutions regarding a buy-back plan of notes, an early repayment of bank loans and the reduction of unused credit facilities, the board of directors resolved on September 19, 2012 to cancel the existing dividend policy for 2012, and to assess dividend distributions (and their scope) from time to time, by reference to, inter alia, the company's cash flow, profitability, debt level, debt coverage ratios and the business environment in general."
Maalot said that it was worried by Partner's liquidity, saying that it was "inadequate", partly because of its planned large dividends. Maalot said that the cancellation of the Scailex acquisition puts high pressure on Partner's liquidity, and is liable to affect its financial situation more severely than expected. The challenging market conditions will also worsen Partner's financial ratios, due to concerns about the large dividend.
Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012