SandRidge Energy Inc.’s (NYSE: SD) board of directors has decided to suspend payment of the $3.50 per share semi-annual dividend on shares of its 7.0% convertible perpetual preferred stock.
President and CEO James Bennett said, "Preservation of liquidity and prudent capital allocation are key issues for SandRidge in the current environment. In prior periods, we had chosen to PIK the dividend on our preferred stock, paying in common shares rather than in cash. Given the low recent SD share price, paying the dividend in shares would subject our equity holders to significant dilution. So we have chosen to suspend the dividend as we proactively protect and improve our balance sheet while supporting long term enterprise value."
The company has 3,000,000 shares of 7.0% convertible perpetual preferred stock outstanding and will continue to reevaluate the dividend payment policy on a semi-annual basis.
The suspension of its dividend does not affect the company's business operations and does not cause an event of default under any of its debt agreements.