CIRI shareholders to get windfall

ANCHORAGE (AP) -- Shareholders of Cook Inlet Region Inc. will be getting a major dose of Christmas cheer.

A typical shareholder will get $50,000 from the Anchorage regional Native corporation, CIRI President Carl Marrs announced Friday. For most, the money will be tax-free.

CIRI's 15-member board voted unanimously Friday to make the distribution of more than $314 million, Marrs said. A second, probably smaller, payment will come next year.

''The board spent a lot of time on this issue of how much we could and should distribute to our shareholders,'' Marrs said. ''It will make a substantial difference in a lot of our shareholders' lives.''

A big distribution to CIRI's nearly 7,000 shareholders had been widely expected after the corporation agreed to exchange its interest in several wireless telephone partnerships for 7.5 million share of stock in VoiceStream Wireless Corp., worth more than $860 million at Friday's closing price.

''This (the $314 million payout) is the first installment for about half the shares of VoiceStream,'' Marrs said. He said CIRI would sell nearly 4.1 million VoiceStream shares in the next year and distribute the proceeds to CIRI's owners.

At Friday's price, that would mean an additional payout of $156 million, or about $22,300 for the average shareholder, on top of the $314 million being paid out Dec. 28.

But VoiceStream stock, like that of many new technology companies, has been extremely volatile, reaching as high as $161 a share and as low as $77.63 a share over the last year. So it will be tricky for CIRI managers to decide how to unload that stake, which amounts to about 1.8 percent of VoiceStream's stock.

The issue is complicated by the planned takeover of VoiceStream by the German telecommunications giant, Deutsche Telekom. That merger still must clear regulatory hurdles.

The Dec. 28 payout to stockholders will be tax-free because it's structured as a return of capital, not a dividend, and because CIRI was able to use tax losses in prior years to make 2000 a losing year, at least for tax purposes, Marrs said.

''That was the big impetus for making the payment now,'' he said. Next year's distribution will be taxable, Marrs said, because CIRI's tax losses are being used up. ''We will become a taxpaying corporation,'' he said.

CIRI will make the December payment out of cash on hand and some borrowing, Marrs said, so that VoiceStream shares can be sold when managers feel they can obtain the best price.

In recent years, Marrs said, CIRI's board has held fast to a policy of paying out annual dividends amounting to 35 percent of average income over the previous five years. A typical shareholder with 100 shares got $2,947 already this year, and has collected more than $48,000 in distributions since CIRI began issuing dividends in 1980.

Some stockholders have grumbled and demonstrated over the CIRI management's decision to hold onto much of its investment horde instead of giving it to shareholders, some of whom live in poverty.

With the investing ''home run'' in VoiceStream, Marrs said, ''We can afford to make a significant distribution to our shareholders and also continue to invest to grow the company for the future.''

Receiving such a big check could complicate matters for some shareholders who live in public housing or receive benefits that are limited to those with few assets, Marrs acknowledged.

''We will have people who are experts in those fields available to talk with our shareholders,'' he said, and CIRI will hold seminars in Anchorage, Kenai and Seattle to provide guidance on those issues and on how to invest the money.

CIRI invested about $125 million in partnerships with VoiceStream in 1997. The partnerships, with CIRI holding a 50.1 percent interest and VoiceStream 49.9 percent, obtained wireless licenses in major cities across the country. Native control of the partnerships provided a bidding advantage under the rules of the Federal Communications Commission, according to Marrs.

Those partnerships gained licenses to provide service in Los Angeles, Chicago, San Francisco, Dallas, Cincinnati, Cleveland, St. Louis, Milwaukee and other cities, according to VoiceStream.