Occidental to Pay $200 Million Berkshire Dividend in Cash - TheStreet

Occidental to Pay $200 Million Berkshire Dividend in Cash

Occidental Petroleum will pay a $200 million dividend due to Berkshire Hathaway in cash instead of common stock.
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Occidental Petroleum OXY said it would pay about $200 million of dividends on preferred stock held by Berkshire Hathaway  (BRK.B) - Get Report in cash instead of common stock. 

The move is a signal to investors that the company is more confident of its ability to manage its debt, Bloomberg reported.

Occidental will pay $2,000 a share on its Series A cumulative perpetual preferred stock held by Berkshire, which is controlled by the investor Warren Buffett. 

Occidental had borrowed to finance the August 2019 purchase of Anadarko. It had been paying the dividends in stock to conserve cash, Bloomberg reported. Oil demand and prices collapsed in the wake of the coronavirus pandemic when travel largely ceased and much business activity disappeared.

Berkshire had purchased $10 billion of Occidental preferred stock in August 2019, which helped the energy company close the Anadarko deal.

Oil has shown signs of rebounding as lockdown restrictions ease and the coming cold weather increases demand. 

In March, Occidental said it cut capital spending, slashed its common-stock dividend by almost 99%, and would pursue asset sales. 

Shares of the Houston oil major at last check were off 4% at $11.19 on a severely down day on Wall Street. They earlier in the session had traded down more than 6%. The stock traded above $47 in January and at $9 in March.