FAIRFIELD, Conn., Wed May 16, 2012 – General Electric Co.’s finance arm will resume paying a quarterly dividend to the parent company and make a special payout of $4.5 billion, paving the way for the largest U.S. conglomerate to increase its dividends and buybacks.
GE shares rose 3 percent to $18.90 in premarket trading. They closed at $18.40 on the New York Stock Exchange on Tuesday.
Raising its dividend and buying back shares are top priorities for GE this year as it tries to repay shareholders for the $12 billion in common stock that it sold in October 2008 during the financial crisis.
GE historically received a dividend from its finance arm but halted that practice in the fourth quarter of 2008.
The GE Capital dividend was subject to approval from the Federal Reserve, which became its regulator in 2011.
GE said on Wednesday the board of GE Capital declared a quarterly dividend of $475 million payable to GE in the second quarter. The special dividend will be paid this year.
“With this announcement, GE Capital will return cash to GE beginning this quarter,” GE CEO Jeff Immelt said in a statement.
“This action demonstrates the strength of GE Capital and the significant actions taken to strengthen its liquidity, capital, asset quality and profitability.”