Property group Overseas Union Enterprise (OUE) yesterday announced it has adopted an annual cash dividend policy.

OUE aims to pay out annually at least 50 per cent of after-tax profits of the company and its subsidiaries after taking into account fair value gains, the group's capital requirements, expansion plans and other funding requirements.

It said the decision is in line with its aim to optimise returns and ensure greater accountability to shareholders, and allow for good balance-sheet management.

However, OUE stressed that dividends would not necessarily be declared in any given year. Any payout made will be subject to factors such as its financial position, expansion plans and other factors considered relevant.

Above all, any payout must be in OUE's best interests.

The dividend policy will be reviewed periodically.

Last week, the group announced that controlling shareholder Lippo Group would be selling an undisclosed portion of its shareholdings in OUE.

As controlling shareholder, Lippo has an indirect interest in 51.19 per cent of OUE. It holds 37.32 per cent of OUE's shares through Golden Concord Asia.

OUE also announced plans to issue up to $200 million inconvertible notes due in 2015, stating that net proceeds from the sale of notes would be used to buy hospitality, retail, commercial and/or residential land sites or properties for development in Singapore.

Last month, the group posted net profits for the quarter ended March 31 of $184.6 million - more than 14 times the $12.6 million a year earlier. The profit surge was due mainly to revaluations and write-backs of impairment losses.

Revenue jumped 46 per cent to $48 million over the same period.

OUE posted a net loss of $92.2 million for the year ended last Dec 31, against a $40.9 million net profit in 2008.

Source: The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.