CVR Energy Inc., a refiner and marketer of petroleum fuels and a majority owner of CVR Partners LP, a nitrogen fertilizer producer, announced today that its board of directors has approved a regular quarterly cash dividend of $0.08 per common share, the first of which will be paid following the end of the company’s first quarter on a date to be set by the board. The board reached its decision to initiate a regular quarterly dividend after an extensive review of the company’s financial performance and confidence in its future prospects and believes it is consistent with its continuing commitment to deliver long-term value for shareholders.
As part of that commitment, the board also intends to sell a portion of the company’s investment in CVR Partners to pay for a special dividend to shareholders and strengthen the company’s balance sheet. The board believes that a sale of a portion of the company’s interest offers the best opportunity to deliver significant value to shareholders in a reasonable time frame with minimal execution risk or structural impediments. The size, time and manner of the sale will be disclosed when the transaction is implemented.
“Given the projected cash generation of our refining business, the distributions we receive from our ownership in CVR Partners and our strong financial position, our board determined after careful review of all its strategic options that it was appropriate to return a meaningful amount of cash to our shareholders. We intend to introduce a regular quarterly cash dividend that is in-line with our refining peers and a special dividend funded from the sale of a portion of our interest in CVR Partners,” said Jack Lipinski, CVR Energy CEO. “We are proud of our performance, confident in our prospects and look forward to continuing our long-term strategy of providing outstanding returns for our shareholders.”
CVR Energy Inc. announced Jan. 13 that its board adopted a Stockholder Rights Plan with a 15 percent threshold and declared, in conjunction with that plan, a dividend of one preferred stock purchase right for each current share of the company’s outstanding common stock, which will be distributed to stockholders of record on Jan. 23, 2012 (GM Jan. 23, 2012). CVR owns a major stake in CVR Partners LP, which owns a nitrogen plant in Coffeyville, Kan.
The news came soon after billionaire investor Carl Icahn increased his stake in CVR to over 10 percent (GM Jan. 16, 2012). Icahn is known for his corporate takeovers.