Topeka Westar Energy Inc. said Thursday that it wants to sell off assets and cut its stock dividend by more than a third as part of a plan to reduce its massive debt and return to its roots as a utility.
"We expect to be a stand-alone, Kansas, public electric utility company -- nothing more, nothing less," Jim Haines, Westar's president and chief executive officer, told state legislators during a joint meeting of the House and Senate Utilities committees.
Westar filed the plan with the Kansas Corporation Commission, which regulates the state's utilities and in December ordered the company to reduce its $3.6 billion in debt by at least $100 million a year while also exploring the sale of nonutility assets.
As part of the plan, Westar said it would cut its stock dividend for this year by 37 percent, to 76 cents per share from $1.20. In trading on the New York Stock Exchange, shares of Westar rose 57 cents, or 5.3 percent, to close Thursday at $11.42.
Haines said he hoped the company's actions would increase its stock price, offsetting any decrease in dividends for shareholders.
"I hope they look longer-term and at not just what's happening to the dividend and what happens to the price of the stock," Haines said.
Haines told legislators if the company had not decided to cut its dividend, every other part of its plan would have to be executed perfectly.
"We didn't want to propose a plan that's dependent on every step being a home run because that's not realistic," Haines said.
The KCC had given Westar until Thursday to submit the plan, which Haines outlined for legislators Thursday during a meeting of the House and Senate utilities committees.