Globaltrans Faces Investor Backlash Over Dividend Suspension Amid Ongoing Russian War

Globaltrans Investment PLC recently made headlines with decisions that have left investors frustrated and concerned about the company's future.

This decision comes after months of uncertainty, despite earlier hopes that the company's re-domiciliation from Cyprus to Abu Dhabi would resolve issues that had halted dividend payments since 2021.

The company’s April shareholders' meeting confirmed that dividends for 2023 would not be paid, citing ongoing technical difficulties. Although Globaltrans had moved its registration to Abu Dhabi, this change hasn’t resolved the financial hurdles needed to resume dividend payments. The lack of dividends has led to a 44% drop in Globaltrans' stock price since mid-April.

Globaltrans’ situation is made worse by its operations in Russia, a country that has been waging a full-scale war against Ukraine for over two and a half years, destroying civilian infrastructure, including railways and stations in Ukraine.

The company’s decision to suspend dividends indefinitely has also drawn criticism from the Bank of Russia, which warned that this could damage the company’s transparency and attractiveness to investors. Despite the move to Abu Dhabi, the technical and legal obstacles to paying dividends remain unresolved, leaving investors frustrated.

Adding to the uncertainty, Globaltrans has seen a shift in its ownership structure, with Kazakh businessman Kairat Itemgenov now holding a 32% stake in the company. While this might suggest new opportunities, it has done little to calm fears among minority shareholders who worry that Globaltrans could delist from the Moscow Exchange, leaving them with limited protections.

Source: Interfax; Forbes; Kapital.kz