BP Plans to Defer Dividend Until Spill Can Be Better Assessed

BP (BP) plans to place in escrow money it would have paid out as shareholder dividends until there's a greater understanding of the scale of the disaster caused by the Gulf of Mexico oil spill. Under the plan, the expected $1.7 billion second-quarter payment, which was to be announced July 27, would be delayed until the crisis can be brought under control, The Times of London reported.

Additionally, all future dividend payments would be treated in the same manner until the company has regained footing, and the scope of the oil giant's liabilities from the disaster can be determined, the newspaper reported, citing unnamed sources.

While final approval for the plan to defer dividends would need to be given by BP's board next month, a growing number of BP directors now recognize that the move may be essential to placate American public opinion.

"We are considering all options on the dividend. But no decision has been made," Tony Hayward, BP's chief executive said in an interview with The Wall Street Journal on Friday.

As one of Britain's biggest companies, BP is a mainstay of nearly every U.K. pension fund. The National Association of Pension Funds estimates that U.K. pension funds' exposure to BP is about 1.5% of their total assets, which are worth more than £800 billion, BBC News reported.

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