Vodafone Expects Dividend Payments from Verizon Next Year

Vodafone says that it expects to start earning dividend payments from its shareholding in US based Verizon Wireless from next year. Vodafone has not earnt anything from its holding in Verizon Wireless since 2005 - when it received a payment of £923 million (US$1.84 billion) from the company. Since then the majority shareholder, Verizon has decided to focus on repaying debt and not paying out dividends to the shareholders.

Verizon owns 55% of the wireless company - and Vodafone holds the remaining 45% of the company.

In a statement, the Verizon Board told the Financial Times newspaper "The cash distribution policy for 2009 and beyond will be made by the Verizon Wireless board, which will assess a whole range of factors in making its decisions on timing."

Vodafone has indicated that it was sticking by its statement last year that it should receive dividends sometime next year. "We have not changed our expectations for when dividends will resume," it said.

Vodafone has come under pressure several times over the past few years to sell its holding in Verizon Wireless due in part to the lack of management control and the lack of dividend payments. Vodafone has always refused to consider a sale, saying that the investment is a long term proposition.

On the web: Financial Times

Posted to the site on 26th March 2008