By: E&P Staff
Beleaguered Sun-Times Media Group (STMG) Wednesday said it is suspending its quarterly dividend because of its diminished cash flow and the “ongoing weakness” of its sole Chicago market.
Formerly known as Hollinger International, the company publishes the Chicago Sun-Times and dozens of other dailies and community papers in the greater Chicago market.
STMG said its board of directors had completed a previously announced review of its dividend policy and voted to suspend the quarterly dividend of five cents per share.
STMG said it had “determined that it is not prudent to pay a dividend at this time in light of the significant shortfall in operating performance and cash flow due to ongoing weakness in the Chicago advertising market, as well as the company’s continued exposure to contingent tax liabilities, the final outcome of which remains uncertain.”
The chain has sold off all newspapers outside the Chicago market in the years since ousting Conrad Black as chairman, and accusing him and other key executives of looting the company of as much as $400 million. STMG faces huge tax liabilities as a result of allegedly improper “non-compete” fees pocketed by Black and others from sales of Canadian newspapers. It also has a potential problem relating to the deductibility of advertising run in its Canadian papers if Canadian authorities conclude that the company was not Canadian-owned in the period after Black renounced his Canadian citizenship in order to accept appointment to the British House of Lords.
The dividend announcement was made before trading opened Wednesday on the New York Stock Exchange. STMG stock, traded as “SVN,” closed unchanged at $4.80 a share Tuesday. In the last 52 weeks it has traded in a range of $4.71 to $9.70.