CBL Properties Announces Suspension of Common and Preferred Stock Dividends
Company Release - 12/2/2019 4:15 PM ET
CHATTANOOGA,
Tenn.--(BUSINESS WIRE)--
CBL Properties (NYSE:CBL) today announced that it is suspending all
future dividends on its common stock, 7.375% Series D Cumulative
Redeemable Preferred Stock and 6.625% Series E Cumulative Redeemable
Preferred Stock.
“Suspending dividends is a significant and difficult decision, one that
was carefully considered by Management and the Board. However,
preserving free cash flow is a paramount objective for CBL at this
time,” said Stephen D. Lebovitz, CBL’s Chief Executive Officer. “We
anticipate a decline in net operating income in 2020 as a result of
heightened retailer bankruptcies, restructurings and store closings in
2019. Offsetting these declines by retaining available cash is necessary
to maintain the market dominant position of our properties and to
reduce debt. CBL has also made significant efforts over the past 18
months to reduce operating costs, including executive compensation and
overall corporate G&A expense, as well as execution of a strategy to
utilize joint venture and other structures to reduce capital
expenditures. Ultimately, we believe these actions will allow the
Company to return greater value to its shareholders.”
The dividend suspension will be reviewed quarterly by the Board of
Directors, but is expected to remain in place until year-end 2020. The
Company made this determination following a review of current taxable
income projections for 2019 and 2020. The Company will review taxable
income on a regular basis and take measures, if necessary, to ensure
that it meets the minimum distribution requirements to maintain its
status as a Real Estate Investment Trust (REIT).
Unpaid dividends on CBL’s preferred stock shall accrue without interest.
No dividends may be paid on shares of CBL’s common stock unless all
accrued but unpaid dividends on its preferred stock, and any current
dividend then due, have been (or contemporaneously are) paid in cash, or
a cash sum sufficient for such payment has been set apart for payment.