October 29, 2019 / 12:25 PM / 22 days ago

Russian steel pipemaker TMK may review dividend policy, speeds up buyback

MOSCOW (Reuters) - Russian steel pipemaker TMK (TRMK.MM) plans to review its dividend policy in early 2020 and may return to the idea of its European business holding a secondary public offering (SPO) in the first half of 2020, its head of strategy told Reuters.

TMK’s European business is consolidated on the basis of its Romanian subsidiary Artrom ROART.BX. TMK, controlled by businessman Dmitry Pumpyansky, postponed the sale of 60% in TMK-Artrom via an SPO in May, citing weak market conditions.

“But we continue to look at the market and we can return to these plans. I think it will be no sooner than in the first half of next year,” Vladimir Shmatovich said.

The new dividend policy will be created soon after TMK completes the sale of its U.S. subsidiary IPSCO Tubulars late this year, he said, adding that TMK could untie the policy from net income and was considering “best practices” for the change.

In March, TMK agreed to sell IPSCO to pipe producer Tenaris (TENR.MI), which has production facilities in the United States and several other countries, for $1.2 billion. [nL8N21946P]

TMK currently returns no less than 25% of its annual net income to shareholders.

The company is also speeding up its buyback program, which it approved a year ago for up to $30 million, Shmatovich said. So far, the company has spent $500,000 buying its own shares as part of the program and plans to extend it through 2020.

The shares, which TMK is going to buy back, are likely to be canceled then, he added.

Reporting by Anastasia Lyrchikova; writing by Polina Devitt; editing by Tom Balmforth and Bernadette Baum

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