OREANDA-NEWS. May 24, 2010. Bashneft’s Board of Directors has proposed a RUB109.65 dividend for 2009 on both common and preferred shares, compared with the RUB48.82 dividend paid out for 2008. The total 2009 dividend payment should amount to RUB22.45bn (~USD730m), reported the press-centre of OTKRITIE Financial Corporation.

Thus, the company looks to more than double its dividend payment YoY. The proposed dividends translate into a common dividend yield of approximately 10% and a preferred yield of about 14% (based on current share price levels). Bashneft’s AGM record date is 21 May, so Bashneft shares should be going ex-dividend on the local market next Monday.

View: In our view, by substantially increasing its dividend payment Bashneft is sending a positive signal to its shareholders. We think this is an indication that the company plans to consolidate cash flows of the group on the Bashneft level and distribute them to all shareholders (including AFK Sistema) in the form of dividends.