GEO - GEO Group suspends quarterly dividend for maximize debt repayment; to evaluate corporate structure

The GEO (GEO) trades 3.5% down premarket after its board immediately suspended the company's quarterly dividend payments for maximizing the use of cash flows to repay debt, deleverage, and internally fund growth.While currently it plans to maintain its corporate tax structure as a REIT, it seeks to undertake an evaluation of the same.The board expects to conclude its evaluation in 4Q21 and if it determines to not change its current intent to maintain GEO's REIT status, an additional dividend payment may be required before year-end in order to meet the minimum REIT distribution requirements.As of Mar. 31, 2021, GEO had $291M in cash on hand and ~$209M in borrowing capacity available under the revolving credit facility, in addition to an accordion feature of $450M under the company's senior credit facility. For 2021, the company has cancelled ~$35M in earlier planned Capex; it targets to repay a minimum of $125-$150M in net debt during 2021.

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GEO Group suspends quarterly dividend for maximize debt repayment; to evaluate corporate structure