Ispat Iscor has plenty to give to investors
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Trade and Industry Editor
AFRICA`s largest steel maker, Ispat Iscor, may release eagerly awaited details of its new policy of distribution to shareholders after a board meeting on December 10.
Analysts estimate that dividends worth at least R2,2bn may be paid to shareholder s, followed by more dividends later.
The steel maker, whose profits have surged of late, held back on interim and final dividends in lieu of the distribution policy review, which will be submitted to the board by the end of the year .
The group would not confirm whether the board would decide on a new distribution policy at the December 10 meeting , however.
Several analysts indicated that a minimum initial dividend of R5 a share could be paid. At 445-million shares in issue, this would equate to about R2,2bn.
An analyst at a large fund management company said Ispat Iscor might be able to distribute between R15 and R20 a share. He speculated, however, that the group would follow PPC`s example of distributing special dividends in two or three tranches.
Following the first-half results, Ispat Iscor said its excess capital amounted to about R13 a share. But this would not necessarily be the amount for distribution, said Steve Meintjes, of Imara SP Reid.
The figure being bandied about after the release of half-year results in August was R5 a share. Ispat Iscor`s cash flow has strengthened substantially since then.
Anglo-Dutch group LNM will be the major beneficiary, with its stake in the South African company at about 51%.
Ispat Iscor`s share price has risen from about R40 in August to R60 now.
Yesterday alone, the share gained about 5%.
Ispat Iscor also earlier said it would divulge details of the mooted renewal of the controversial business assistance agreement and expansion projects before year-end.
Analysts believed the initial business assistance agreement was justified when LNM helped Ispat Iscor achieve significant savings. Ispat Iscor paid LNM handsome sums in return.
LNM has since become Ispat Iscor`s largest shareholder, however, which means that it would enjoy the rewards of improved operations at Ispat Iscor regardless of whether or not there is a business assistance agreement.
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