KeyTech Temporarily Suspends Dividends
In a letter to shareholders, KeyTech Limited announced that they decided to temporarily suspend the dividend for the quarters ended September 2014 and December 2014.
“Over the years, KeyTech has maintained payment of a healthy dividend to our shareholders. The Board assures you that this decision was not taken lightly and therefore very much appreciates your understanding,” the letter said.
The Company cited their recent adjustments such as the sale of the Bermuda Telephone Company and the acquisition of WestStar TV in Cayman, saying that “unlocking the full value of these transactions is the primary focus of the Group for the remainder of the fiscal year.”
The full letter to shareholders follows below:
Dear KeyTech Limited Shareholder,
At the September 24th, 2014 KeyTech Limited Board meeting, the Board of Directors decided to temporarily suspend the dividend for the quarters ended September 2014 and December 2014.
As you are aware, KeyTech recently executed a transformational strategy, the sale of the Bermuda Telephone Company (BTC), the acquisition of WestStar TV in Cayman and a controlling interest in Bermuda Cablevision (BCV). A letter was mailed to shareholders earlier this month outlining the details of and reasons for these transactions.
Over the years, KeyTech has maintained payment of a healthy dividend to our shareholders. The Board assures you that this decision was not taken lightly and therefore very much appreciates your understanding.
Unlocking the full value of these transactions is the primary focus of the Group for the remainder of the fiscal year, and we expect this transformation will position us well for the future. The Board recognized the need for Management to be given the necessary time to align and integrate the various business strategies.
This includes maximizing synergies in networks, infrastructure, systems, and workforces. The Board concluded that it is imperative that the businesses have access to any required funding necessary to achieve these synergies for the initial six month period, post transactions.
These transactions reflect our commitment and the importance to improving the service offerings of all subsidiaries, and ensuring that we have access to the right technology and infrastructure for continued sustainability and future growth.
After months of tireless and challenging work from both management and the Board that spanned two jurisdictions, which included seeking approval from and negotiating with governments and regulators, we have achieved the desired outcome.
The issuance of the annual report for March 31, 2014 will be delayed due to the complexities around the financial reporting requirement for these transactions. KeyTech was given an extension from the Bermuda Stock Exchange and as such the annual report will be mailed to shareholders on October 31, 2014.
The 2014 Annual General Meeting is intended to be held during the week commencing November 17, 2014. Further details and a formal notice will follow in due course.
The domestic corporations one after the other, their shareholders and the shareholders who depend on the dividends are being destroyed. How can we have a healthy economy if our corporations are being decimated?
One more decline in incomes. This time a behind the scenes decline that hits below the belt and more subtly than outright job losses such as at the Bermuda Sun. But this below the belt hit still has a major impact.