Federal-Mogul pays dividend to preferred stockholders

SOUTHFIELD, Mich. (Aug. 31)—Federal-Mogul Corp. said Aug. 30 its board of directors Sept. 4 will pay a quarterly cash dividend of $0.875 per share on the company's outstanding 7 percent trust convertible preferred stock to shareholders of record at the start of business Aug. 31. The dividend is a positive sign for Federal-Mogul's debtholders, who may have been concerned about the seal maker's ability to pay interest to them, said analyst Richard Hilgert. "If the preferred (stockholders) are getting their interest, that means the company has plenty enough money to pay interest to debtholders plus run the business," said Hilgert, an automotive analyst with the Detroit-based First of Michigan Division of Fahnstock & Co.