Finnlines owner may endorse share issue -report

HELSINKI, May 18 (Reuters) - Finnlines' (FLG1S.HE: Quote, Profile, Research, Stock Buzz) majority owner, Italy's Grimaldi Group, was on Sunday quoted as saying that if Finnlines ends up paying dividends for 2007, as demanded by another owner, the next step would be a directed share issue.

The Finnish shipper's board had proposed no dividend would be paid for 2007, but in the company's annual investor meeting in April Finnlines' second-largest owner, pension insurer Ilmarinen, would not accept the proposal.

The decision was postponed and a follow-up investor meeting to resolve the matter is scheduled for May 20.

But in comments published on Sunday in daily Helsingin Sanomat, Grimaldi's head said the proposal for no dividends holds and that if Ilmarinen goes to court for the dividends and succeeds, Grimaldi is to respond with a share issue.

"If I am forced to pay out dividends, I will on the following day carry out a directed share issue of the equal amount. This would obviously be ridiculous -- I hope Ilmarinen understands this," Grimaldi Group's Emanuele Grimaldi was quoted as saying in Helsingin Sanomat.

This could mean Ilmarinen would have to buy more shares to maintain its holding above 10 percent in Finnlines. It currently has a 10.21 percent holding, while Grimaldi owns 58.76 percent.

Grimaldi said this was no time to pay back cash.

"We have just carried out investments worth nearly 1 billion euros ($1.6 billion) in Finnlines. Fuel costs are seen rising, also interest rates. General trends of the global economy are unstable. Now is the time for investments, not for taking home profits," Grimaldi told the paper. (Reporting by Sami Torma; Editing by Jason Neely)