(BP dividend suspension story updated for reports of BP plan to sell debt)NEW YORK ( TheStreet) -- BP ( BP) chairman Carl-Henric Svanberg announced from outside the White House that the British oil giant will suspend its dividend at least through the third quarter of 2010, but the task fell to CFO Byron Grote to sell the dividend plan and other major financial concessions to investors on a Wednesday afternoon conference call. Grote tried to spin all the concessions made by BP as the "prudent" move to increase confidence in the embattled company, which has seen its market value cut in half and its bond ratings knocked down to two notches above junk status, with bond and swaps yields also widening.
|BP Chairman Carl-Henric Svanberg|
GS) and Morgan Stanley ( MS), CNBC reported, though the banks had no immediate comment. As a result of the decisions made on Wednesday and the slowdown in the Gulf of Mexico due to the federal ban on drilling, BP said its capital expenditures will decline by as much as 10% in 2010, and 10% or more in 2011. Cuts in organic capex of 10%, or slightly higher in 2011, are based on the company's previous guidance of $18 billion in capital expenditures, Grote said. If it seemed BP had walked into the White House not being legally bound to suspend its dividend or create an escrow fund, it seemed to some analysts that BP walked out of White House with the legal nature of the government's demands not being a very big issue anymore -- or one on which BP thought it wise to take much of a stand. John Rigby, analyst at UBS, said to Grote on the call, "It seems to me that BP agreed to pay $20 billion into escrow and suspended the dividend for three quarters, yet the BP chairman described the meeting as being constructive. So what did you get out of the meeting, from what appears to not be a legal requirement and something people thought was an aggressive stance taken by the U.S. government?"
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