US auto retailer Sonic Automotive is suspending its quarterly dividend after previously paying US$0.12 a share.
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In a statement, Sonic said it had retained Moelis & Company as financial advisor to assist it in evaluating alternatives to enhance liquidity and to address the company’s 2009 and 2010 debt maturities.
President Scott Smith said: “While this is the most challenging business environment in recent years, Sonic has responded by reducing costs and managing liquidity for our ongoing operational needs.
“In addition, we remain in compliance with the financial covenants under our revolving credit facility. However, given the continued upheaval in the credit markets and our upcoming debt maturities in 2009 and 2010, we believe the suspension of the dividend and the engagement of Moelis & Company represent a prudent course of action as we evaluate the alternatives available… to address our debt maturities.”
Sonic operates 169 franchised dealers in the US.
