SandRidge suspends dividend on 7% convertible perpetual preferreds

By Susanna Moon

Chicago, Sept. 28 – SandRidge Energy, Inc. said its board of directors decided to suspend dividend payouts on shares of its 7% convertible perpetual preferred stock.

The suspension of the $3.50 per share semiannual dividend does not affect the company’s business operations nor does it cause an event of default under any of its debt agreements, according to a company press release.

“Preservation of liquidity and prudent capital allocation are key issues for SandRidge in the current environment,” James Bennett, the company’s president and chief executive officer, said in the press release.

“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 said it has 3 million shares of the convertible perpetual preferreds outstanding and will continue to reevaluate the dividend payment policy on a semiannual basis.

SandRidge is an oil and natural gas company based in Oklahoma City.

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