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Richemont Announces Shareholder Loyalty Scheme, Plans Conditional Share Capital Increase

Swiss luxury goods group Compagnie Financiere Richemont AG (CFRUY.PK) Friday announced shareholder loyalty scheme, under which tradable warrants will be issued to shareholders.

This will allow them either to trade the warrant or, subject to the terms and conditions of the warrants, acquire new Richemont A shares in three years at a potentially beneficial exercise price.

The company on May 15 had said that its Board of Directors would propose a dividend of CHF 1.00 per A share / CHF 0.10 per B share at the upcoming AGM and that it was considering an equity-based shareholder loyalty scheme. The 2020 Annual General Meeting will be held on September 9.

The exercise price will be set on the basis of the volume-weighted average market price of the Richemont A shares before the 2020 AGM. The maturity of the warrants will be set at three years.

This will allow shareholders who hold the warrants until maturity to benefit from any potential upside in the market price of the Richemont A shares during the lifetime of the warrants.

Further, in connection with the issuance of the warrants, the company will ask shareholders at the upcoming 2020 Annual General Meeting to approve conditional share capital increase.

The company would also ask them to authorise the issuance of a corresponding number of new shares upon exercise of the warrants.

Johann Rupert, Chairman of Richemont, said, "We are currently facing an unprecedented global health crisis. Predicting the likely scope and timing of a recovery in demand remains difficult, if not impossible. ... 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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