UPDATE: Russia’s MegaFon to work out new dividend policy by June

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MOSCOW, Apr 28 (PRIME) -- Russian mobile operator MegaFon will unveil a new dividend policy by June, Financial Director Gevork Vermishyan told reporters Thursday.

“Our dividend policy adopted in 2012 when we held an initial public offering has aged a bit, in our view, and it needs renovation,” Vermishyan said.

The current policy stipulates the payment of dividends to the tune of 70% of a free cash flow, or 50% of the net profit on condition that the debt/OIBDA ratio is maintained at 1.2–1.5.

“This corridor of 1.2–1.5, which would confirm the credit rating of the company’s investment level, is no longer relevant as rating agencies downgraded the sovereign (credit rating) and then other ratings as well,” the executive said.

“We cannot disclose any parameters of the new dividend policy, but we are going to get involved with the policy in the near future.”

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