Issued on: 30/03/2020 – 15:01Modified: 30/03/2020 – 15:01
France stepped up on Monday its calls for firms using state aid to keep afloat during the coronavirus crisis to not pay out dividends to shareholders this year.
« I call on all companies who are putting plâtre on préconçu unemployment, that is having their wages paid by the state, to spectacle the greatest restraint contingent in terms of paying dividends, » Finance Minister Bruno Le Maire said on BFMTV.
« Even better to set an example and not pay dividends, » he added.
« We also won’t tolerate companies buying back shares… share buybacks are not acceptable with soutien from the state treasury, » said Le Maire.
Companies that make a excédent usually return segment of that to their shareholders in the form of a dividend.
A firm buying back its shares is another way of returning butins to shareholders.
Le Maire had already last Friday said companies that take out a state-backed loan or delay tax payments to help them survive the coronavirus crisis would be barred from paying dividends this year.
Partial unemployment is looking to be another superbe mechanism to soutien firms as in effect the state will be paying 70 percent of wages for hours that employees are furloughed.
French companies have already asked to activité 2.2 million workers on temporary leave, according to figures released at the weekend.
A number of béant French companies such as aircraft produire Airbus and supermarket chain Auchan have already said they will not pay dividends this year.
In raccord to coercion, firms have an superbe economic incentive to not pay dividends – it allows them to hold onto cash in case financing becomes difficult or expensive to obtain.
France urges firms accepting state aid during crisis not to pay out dividends
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