Sioux City, Iowa-Terra Industries Inc. on Oct. 29 announced that its board of directors has declared the previously announced special cash dividend of $7.50 per share. The record date and the payment date for the special cash dividend will be the same as those for Terra’s previously announced regular quarterly dividend ?Çô Nov. 23, 2009, and Dec. 11, 2009, respectively. “Terra’s Board is committed to enhancing value for all shareholders, and over the past three years 35 percent of Terra’s net income has been delivered to shareholders in the form of share repurchases and dividends,” said Terra President and CEO Michael Bennett. “Through the special cash dividend, Terra will return an aggregate of approximately $750 million to shareholders. In addition to this special cash dividend, we recently announced an agreement to purchase a 50 percent interest in Agrium Inc.’s Carseland, Alberta, Canada nitrogen production assets and certain U.S. assets. These actions are further examples of the Board’s commitment to providing shareholders with significant additional value for their investment in Terra.” Terra’s common stock will begin trading without the special cash dividend and the regular dividend, on an ex-dividend basis, on Dec. 14, 2009 (i.e., the first business day following the payment date). Shareholders of record on the record date who sell their shares on or before the payment date will lose their right to the special cash dividend and the regular dividend. Based on its current estimates, Terra expects that approximately $1.00 to $1.50 of the special cash dividend will, for tax purposes, be classified as a return of capital. The tax character of the special cash dividend will be determined by the amount of earnings and profits for 2009, which will not be known until after the company’s books are closed effective Dec. 31, 2009.
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