Vale Plans To Cut Dividends

(RTTNews) - Vale S.A. (VALE) said that it plans to cut dividends to the lowest level in eight years in an attempt to shore up cash amid spiraling commodity prices.

The company has proposed to its board a $2 billion minimum dividend payment for 2015, down from $4.2 billion last year.

The dividend, equivalent to $ 0.388095186 per share for both common and preferred shares outstanding, will be distributed in two equal tranches, on April 30 and October 30, 2015.

The Board of Directors will evaluate the proposal for each tranche in the meetings scheduled for April 14 and October 15, 2015.

"The dividend proposed preserves Vale's sound capital structure and is consistent with the current scenario, in which we will invest to complete our key growth projects such as S11D while facing an environment of lower and volatile commodities prices. Vale reassures with this proposal its commitment to maintain its investment grade," the company said.

"At the same time, we are intensifying the cost and capex reduction targets announced last December and developing partnerships and divestments to reinforce our free cash flow generation," the company said.