WASHINGTON (dpa-AFX) - The GEO Group, Inc. (GEO), on Thursday said its Board has authorized the company to initiate necessary steps, which may include the divestiture of certain of its health care assets, in order to position itself to operate as a real estate investment trust from 2013.
The company added that it shall undertake required actions, enabling it to 'operate in compliance' with the real estate investment trust rules of the Internal Revenue Code, starting January 1, 2013.
The decision follows thorough analysis by the company to find ways to maximize shareholder value through alternative financing, said GEO in a statement.
Further, as an REIT, the company expects to generate funds from operations or FFO in a range between $215 million and $225 million, while expecting to report a pre-tax income in a range of $130 million to $140 million in 2013.
GEO revealed it was yet to receive a private letter ruling from the Internal Revenue Service.
George Zoley, GEO's Chairman, CEO and Founder stated, 'The REIT conversion will maximize our company's ability to create shareholder value given the nature of our assets, help lower our cost of capital, draw a larger base of potential shareholders, provide greater flexibility to pursue growth opportunities, and create a more efficient operating structure.'
In addition, the company's Board has declared a special dividend totaling $5.68 per common share, amounting to nearly $350 million of accumulated earnings and profits, which shall be paid on December 31, 2012 to shareholders of record on December 12, 2012.
Each shareholder may elect to receive payment of the special dividend either in cash or in shares of the company's common stock, said GEO.
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