General Electric Co.’s finance unit plans to pay a special dividend of $4.5 billion to the parent company after suspending the cash transfers in 2009 amid the financial crisis.
Payments to the parent company will begin with a $475 million quarterly dividend for the three months through June, according to a statement today. For the year, the dividend is targeted to be 30 percent of GE Capital’s earnings, excluding the special payment, Fairfield, Connecticut-based GE said.
“This action demonstrates the strength of GE Capital and the significant actions taken to strengthen its liquidity, capital, asset quality and profitability,” Chief Executive Officer Jeffrey Immelt said in the statement.
Chief Financial Officer Keith Sherin told investors on a Jan. 20 conference call that GE was targeting a payment of 45 percent of GE Capital profits. Annual payments from the unit reached as much as $8.6 billion before the dividend was suspended after the crisis that followed Lehman Brothers Holdings Inc.’s 2008 bankruptcy.
GE also said today it will accelerate buying back common stock this quarter, depending on “market conditions.”
GE rose 1.4 percent to $18.66 at 7:08 a.m. before regular New York trading. The shares had advanced 2.7 percent this year before today.
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