OREANDA-NEWS. On 24 April 2009 was announced, that Far East Telecom (RTS: ESPK, МICEX: DLSV, OTC USA: FEEOY, Frankfurt and Berlin exchanges: D7A), the largest telecommunications operator in the Far East, gave notice of a change in the Company’s dividend policy.

The new version of the company’s dividend policy was approved by the Board of Directors of Far East Telecom on March 31, 2009.

According to the new version of the Statute, the target indicator for net profit which is to be allocated as dividend payouts on common shares is set at 15%, which is in line with Far East Telecom’s policy which aims to raise the financial standing of the Company’s shareholders.

In addition, Far East Telecom’s dividend policy has become more flexible, which is due to the current situation on the financial market.  Thus, the new version of the statute allows for the Board of Directors to lower the level of net profit which is to be allocated as dividend payouts on common shares in the event that the Company’s debt burden rises dramatically (i.e. when the ratio of borrowed funds exceeds shareholder equity by more than 1.3x). [1]

Also, when a decision is adopted to determine the amount of the Company’s net profit which is to be allocated as dividend payouts on common shares, the Board of Directors may take into account the Company’s IFRS financial results and the Company’s requirements for financing its investment program.

In addition, the new policy provides for the possibility of paying out interim dividends on the results of the first quarter, six months and nine months of the reporting year.  Earlier this provision was laid down only in the Company’s Charter.

All costs which are associated with dividend payouts will now be incurred at the Company’s expense, whereas earlier the expenses related to paying out dividends were covered by the shareholders themselves.

Based on the new version of the Statute, dividends which are not claimed by shareholders within the term provided for by the statute of limitations, and which are calculated pursuant to the Civil Code of the Russian Federation, shall be included in the composition of other revenues of Far East Telecom.  As of December 31, 2008 the amount of such dividends amounted to Rub 12 mln.

Nonpayment can be due to the absence of payment details for the recipients of dividends in the Company’s shareholders register.  Payment of dividends is made on an unscheduled basis as and when shareholders provide the missing information.

The Statute on Dividend Payment provides a detailed description of the dividend payment procedure and gives clearer guidelines for investors and shareholders.

”We strive constantly to raise our investment appeal and the optimization of our dividend policy along with improved information transparency playing an important role in allowing us to achieve this goal.  Since its inception, Far East Telecom has unswervingly upheld the rights of its shareholders and remain committed to its dividend policy.  All other things being equal, this makes our company preferable when it comes to earning stable additional income in the form of dividends, aside from capital gains by way of foreign exchange differences”, according to Far East Telecom’s CEO Anton Kolpakov.