Late September, Xerox took a bridge loan to buy back shares from Carl Icahn.
Xerox has secured a new loan for $550 million to replace the short-term bridge loan with a supposedly more manageable long-term one.
So far, so good.
but here is the kicker.
The terms of the new loan agreement change how Xerox can handle dividends and, in particular, limit cash dividend payments.
If you are a shareholder accustomed to receiving regular cash dividends, this will change for now.
Simply put, that means you cannot expect “divvy” like you used to, at least not for a while.
There is also a limit on how much money Xerox can use to buy back its own shares, specially from employees and directors.
The question is: when and how will investors and shareholders be informed?
See for yourself.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1770450/000119312523280007/d588006d8k.htm