Aug 7, 2020
Richemont to ask shareholders permission for conditional share capital increase
Aug 7, 2020
Richemont, the owner of Cartier and Chloé, gave details of its proposed shareholders' loyalty scheme on Friday, where it will give warrants to investors which later can be converted into newly created stock.
The luxury goods maker said it would ask shareholders at its annual general meeting on September 9 to authorise the creation of new shares which can be exchanged for the warrants after three years.
Richemont proposed the scheme to preserve cash during the COVID-19 pandemic after halving its dividend to 1 Swiss franc (£0.8373) per share.
"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," Chairman Johann Rupert said. "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."
Richemont said in May it was examining a warrant scheme when it announced its full-year results.
The company said last month it had seen "unprecedented levels of disruption" from the pandemic with its sales almost halving in the three months to June 30.
Also on Friday Richemont said it was nominating Wendy Luhabe, former chairwoman of its South African subsidiary Vendome South Africa, to its board of directors.
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