GM to pay first quarterly dividend in almost six years
General Motors Co will pay the first quarterly dividend on its common stock in almost six years, marking another step in the U.S. automaker's recovery from its bankruptcy in 2009 and sending shares up 3.2 percent in after-hours trading.
The No. 1 U.S. automaker, which last paid a dividend in June 2008 before it moved to save money during the U.S. recession, said it will pay shareholders a quarterly dividend of 30 cents a share, payable on March 28 to shareholders of record on March 18. In 2008, its quarterly dividend was 25 cents a share.
"This return to shareholders is consistent with our capital priorities and is an important signal of confidence in our plans for a continuing profitable future," Chief Financial Officer Dan Ammann said in a statement.
Ammann, who said on Sunday that GM was closer than ever to paying a dividend, will become GM's president on Wednesday.
GM also named Chuck Stevens as the company's new CFO, effective on Wednesday. He had been CFO of GM North America.
Investors have been pushing GM to return cash to them in the form of a dividend or a stock buyback, especially since the U.S. Treasury sold the last of its stake in the company last month.
The dividend reintroduction by GM, which is showing new cars and trucks this week at the Detroit auto show [ID:nL2N0KJ1OI], is likely to attract investors who buy stocks that generate income.
Weak industry demand drove GM to seek bankruptcy protection in 2009 and it emerged as a leaner operation with more cash on hand with the help of a $49.5 billion U.S. taxpayer bailout.
GM already pays a dividend on preferred stock. Rival U.S. automaker Ford Motor Co resumed paying a common dividend in March 2012 after suspending it for more than 5-1/2 years. Last week, Ford boosted its quarterly dividend by 25 percent to 12-1/2 cents per share.
GM ended the third quarter last year with total automotive liquidity of $37.3 billion.
GM stock rose to $41.29 in after-hours trading on Tuesday, compared with the closing price of $40.02 on the New York Stock Exchange.
(Editing by Matthew Lewis)