Capstone Infrastructure Corp T.CSE.PR.A

RE:Bristol Water & Ofwat update

[anon314]

Obviously the market believes that a dividend cut is in the offing. A related question was asked at the 17 June 2015 meeting. From the transcript:

MALE SPEAKER:

Yes. Capstone pays a juicy dividend. What can you tell me that’ll make me feel better about the sustainability of that?

MICHAEL BERNSTEIN:

Well, as Mike covered, we do have a pathway with the building out of the wind projects to get to a payout ratio that is in line with our target of 70 to 80%, and as Mike mentioned—and you can maybe provide a bit more detail—the liquidity to continue to support that dividend.

MICHAEL SMERDON:

So there’s basically three things you need in order to sustain the dividend: a commitment from the Management Team and the Board of Directors, which we have articulated previously we are committed to maintaining the dividend; you need the liquidity in the near term, $63.5 million of liquidity on the balance sheet today which is two times the dollar value of the dividend on an annual basis; and three, a pathway to see that it is sustainable from existing cash flows, and by 2017, with the buildout of the remaining development projects and a reasonable outcome on Bristol, those two factors are all we need in order for dividend sustainability in 2017 and beyond.