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AAR holds off on TNK-BP dividend payment

AAR holds off on TNK-BP dividend payment
The board of directors of the AAR consortium, BP's Russian partner in TNK-BP, have blocked $1.8 billion dividend payment from TNK-BP, with analysts saying this marks a new stage of conflict.

The AAR board, which includes Mikhail Fridman, Viktor Vekselberg, German Khan and Leonid Blavatnik, has decided not to approve a TNK-BP dividend for the fourth quarter of 2010, according to AAR chief Stan Polovets.

"The decision was made not to approve for now payment of dividends for the fourth quarter,"

According to AAR, the $1.76 billion – $1 billion due at the beginning of February and $760 million in March – could be effectively used on TNK-BP's international operations, or as a cash reserve, if its position on the Russian market weakened

AAR has filed for a London court injunction against the strategic alliance between BP and Rosneft which was unveiled on January 14, with a hearing scheduled for February 1.  The deal, which would see the two energy companies swap shares and jointly develop projects in the Arctic violates the TNK-BP shareholders' agreement according to AAR.

Troika Dialog analysts, Oleg Maximov, Alex Fak and Valery Nesterov, believe the AAR decision to vote again the dividend payment is intended to pressure BP.

“We believe that AAR is seeking to put pressure on BP in connection with the dispute over the latter's recent partnership with Rosneft. This latest public standoff between the two shareholders could generate uncertainty regarding TNK-BP Holding's share price until a resolution is found.”