Clariant is scrapping a regular dividend as it hunkers down to survive the COVID-19 crisis, the Swiss specialty chemicals maker said on Thursday, while still planning a special $1 billion payout from asset-sale proceeds, if they go through.
"Our society is confronted with an uncertain and unprecedented economic environment," Clariant's executive chairman, Hariolf Kottmann, said. "The Board of Directors believes in taking a balanced approach towards distributions to shareholders. In this way, the board intends to secure additional liquidity...while still fulfilling its commitment to shareholders."
Analysts at Baaderbank Helvea said there had been previous speculation Clariant would ditch the special dividend while sticking to the regular one, concluding "the market might be positively surprised" with the move to do the opposite. Clariant's dividend yield stands at 17.6%, after the shares have fallen nearly a third since February.
If circumstances allow, Clariant said it would wrap the 0.55 Swiss francs dividend it had planned for 2020 into a larger dividend in 2021, to compensate.
The special dividend, amounting to $3 per share, hinges on the Swiss company completing the $1.6 billion sale of its masterbatches unit to PolyOne Corp, since the proceeds have been designated toward rewarding shareholders including Clariant's largest, 31.5% owner Saudi Basic Industries (SABIC).
Clariant said weeks ago the PolyOne transaction was still due to be completed by September, though a separate transaction -- the planned disposal of its pigments unit that sources have said may fetch 900 million Swiss francs ($925.16 million) -- has been delayed as the pandemic hinders talks with buyers.
(Reporting by John Miller; Editing by Riham Alkousaa and Brenna Hughes Neghaiwi)