Telecom cans Q1 dividend payout over UFB uncertainty

Telecom has canned its Q1 dividend reinvestment plan following delays and uncertainty surrounding the government's ultra-fast broadband project.

Shareholders who participate in the plan will receive a cash dividend at the same time as dividends are paid to shareholders who do not participate in the dividend reinvestment plan, “ensuring that all shareholders are treated equitably”.

When Telecom announced its Q1 FY11 dividend on November 5th, it had “anticipated an imminent announcement” over suppliers for the ultra fast broadband initiative.

In a statement released today, Telecom said, “Due to delays in an announcement, Telecom considers it is not prudent to proceed with the issue of shares under its dividend reinvestment plan for the upcoming quarterly dividend, or undertake the associated on-market buyback of Telecom ordinary shares. Telecom considers this approach to be in line with best practice corporate governance.”

Telecom says it’s not aware of the current timing for the next CFH announcement or the likely outcome of the UFB process.