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Richemont cuts dividend to preserve cash during Covid crisis

Richemont-headquarters-Geneva

Richemont unveiled plans for a shareholders’ loyalty scheme today that gives warrants to investors who can convert them into newly created stock after three years.

The scheme is designed to compensate investors after the group halved its dividend to CHF 1 per share in a measure to preserve cash during the Covid-19 crisis.

“Amid the unprecedented effects of the COVID-19 pandemic and the uncertainty surrounding broader economic conditions, the board of directors has decided that it is appropriate to retain an extra liquidity buffer,” Richemont chairman Johann Rupert says. “Due to the prevailing uncertainty, we have decided to set the maturity of the warrants at three years, to capture the potential future upside in the market price of Richemont shares, once all the challenges of the COVID-19 pandemic will have hopefully been overcome.”

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“We are currently facing an unprecedented global health crisis,” Mr Rupert continues.

“Predicting the likely scope and timing of a recovery in demand remains difficult, if not impossible. A surge in Covid-19 cases has forced countries to reverse reopenings and to reimpose restrictions. Therefore, amid the unprecedented effects of the Covid-19 pandemic and the uncertainty surrounding broader economic conditions, the Board of Directors has decided that it is appropriate to retain an extra liquidity buffer with a reduced dividend level while awarding shareholders a supplementary benefit that will allow them to capture any ultimate improvement in global conditions.”

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Tags : CoronavirusRichemont
Rob Corder

The author Rob Corder