- Investment firm, Mosaic Capital (TSXV:M) has announced that it will suspend its dividend distributions until further notice
- The decision comes as the company looks to preserve its liquidity in order to outlast the COVID-19 pandemic
- The company currently has a strong balance sheet with roughly C$25 million in cash
- While its financials have not yet been significantly impacted, the unpredictable nature of the current economic climate may require more drastic measures
- Mosaic Capital (M) is currently up 1.19 per cent to $2.55 per share, with a market cap of $27.08 million
Investment firm, Mosaic Capital (TSXV:M) has announced that it will suspend its dividend distributions until further notice.
Based in Calgary, Alberta, the company owns a portfolio of established businesses spanning a variety of industries and geographies. Many of its assets operate in the infrastructure, construction and oil and gas service sectors, which have been heavily hit by the outbreak of COVID-19.
Strong financial performance and operational momentum over 2019 has put the company in a resilient position. At the start of 2020’s second quarter, Mosaic had a strong balance sheet with approximately C$25 million in cash.
An additional $30 million is available on its credit facility, with a further $15 million available on its subsidiary-level credit facilities.
However, due to the currently volatile economic climate, Mosaic is taking steps to preserve its liquidity.
An announcement dated March 5 this year outlined monthly dividends of 3.5 cents per share, payable on March 31. However, future dividends have now been suspended.
The company says that the decision is expected to save approximately $1.1 million per quarter.
Mark Gardhouse, President and CEO of Mosaic Capital commented on the company’s current standing.
“While precise modelling of potential financial outcomes is difficult in the current environment, we believe it is prudent to be as prepared as possible as we enter what could potentially be a challenging period.
“With Mosaic’s strong 2019 financial results, positive momentum into 2020, active operating approach and an appropriate level of support from our shareholders and financial partners, we are confident that Mosaic will manage the COVID-19 challenge successfully,” he said.
Mosaic also added that it is in discussions with its various financial partners regarding further options to improve near-term liquidity.
Mosaic Capital (M) is currently up 1.19 per cent to $2.55 per share at 1:25pm EST.