Listed companies may be allowed to distribute interim dividends
The financial regulator (the Financial Supervisory Commission) is proposing to Parliament to amend the law that regulates listed companies (the Public Offering of Securities Act). One of the proposed amendments will allow listed companies to distribute interim dividends, i.e. dividends out of profits generated in the year in which the dividend is declared.
At the moment companies in Bulgaria, including listed ones, can only declare and distribute dividends from profits generated in a given year after the shareholders meeting of the company approves the company’s annual financial statements for that year (and provided they indicate that the company has sufficient distributable profits). This means that companies cannot distribute dividends from profits generated within a given year before that year has ended and before the annual financial statements for that year had been prepared and audited.
If the proposal is approved by Parliament listed companies will be allowed to declare and pay dividends out of profits generated in the first 6 months of the year. This will require the approval by the shareholders meeting of the listed company of 6-months financial statements of the company. The financial statements must also be audited.
The proposal is aimed to make investments in shares of listed companies more attractive by allowing more frequent dividend distribution by them.
In addition, the FSC has proposed to exclude from the rule requiring a prior shareholder approval reinsurance deals made by insurers or reinsurers whose shares are listed.
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