Zurich, Switzerland – Richemont, the owner of Cartier, provided details on the proposed shareholder loyalty program on Friday, where it will issue warrants to investors who can later be converted into newly created shares.
The luxury goods maker said it would ask shareholders at its annual general meeting on September 9 to authorize the creation of new shares that could be exchanged for warrants after three years.
Richemont proposed the plan to keep cash during the Covid-19 pandemic after cutting its dividend in half to 1 Swiss franc per share.
“In the midst of the unprecedented effects of the Covid-19 pandemic and uncertainty about broader economic conditions, the board of directors has decided that it is appropriate to maintain an additional liquidity buffer,” said the 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 increase in the market price of Richemont shares, once all the challenges of the Covid-19 pandemic are hopefully overcome.”
Richemont said in May that it was investigating a warrant arrangement when it released its annual results.
The company said last month that it had seen an “unprecedented disruption” of the pandemic, with sales nearly halving in the three months to June 30.
On Friday, Richemont also said it will nominate Wendy Luhabe, former chairman of the South African subsidiary Vendome South Africa, to the board of directors.
By John Revill; editorial: Kim Coghill and Jason Neely.