State companies have no shortage of cash, and they have wasted cash for years, so there’s no reason why not paying dividends of up to 90%, told energynomycs.ro Fondul Proprietatea’s local manager, Greg Konieczny.
”One way to look at this is that you have to look at the capital structure of those companies. A lot of companies in our portfolio, and also some others that are no longer in our portfolio – have a lot of cash on their balance sheet that hasn’t been used for years,” says Konieczny.
“And that’s a total waste. A lot of companies, especially in markets that are regulated, should be leveraged to maximize their revenues and their returns. So there is no shortage of capital, and if companies do not have a plan or strategy – how to invest this with positive returns- there’s no point to keep cash on the balance sheet”.
Government mandated state representatives in general shareholders’ meetings (GSMs) to national companies and companies owned entirely or with majority state, and the utilities, to take necessary measures to allocate a quota of 90% of net profit in 2016 as dividends/ payments, to the state budget.
According to a release of the Government, the distribution of net profit is to be approved by the General Shareholders’ Meeting, for the companies, and by the Board of Directors, for the Utilities.
Meanwhile, Bulgaria asks state companies that just 50% of dividends to be piad to the state budget.
