British Telecom said today it was confident it would not need to cut its dividend and did not expect to encounter the conditions its group treasurer said might trigger a reduced payout.
Treasurer Mr Andy Longden told the Financial Timesthat if it has to delay the flotation of its mobile phone business it may be forced to cut its dividend and slash investment spending.
"If there is a sustained recession which means the equity markets are severely depressed all year, then we can cut back on the £5 billion sterling worth of expenditure we have planned," he told the paper.
"We also hand out 1.5 billion pounds in dividend payments each year. If equity markets were seriously distressed we would also look at our dividend payments," Mr Longden said.
A BT spokesman said it did not expect to delay the float nor encounter a year-long recession.
"We're confident conditions won't change, but like any company, we do have contingency plans. BT is committed to cutting a third off its £30 billion of debt and plans to float its wireless arm in the second half of the year."
BT shares were 1.7 per cent higher at 716 pence in early trade.
Reuters