Statoil Saves $292 Million Cash as Investors Take Scrip Dividend

  • Investors took 43 percent of their net dividend in shares
  • Analysts predicted a majority if investors would choose shares

Statoil ASA, Norway’s largest oil producer, saved $292 million in cash as investors chose to take 43 percent of their total net dividend payout in shares.

Subscriptions were made for a total of 18,298,942 dividend shares, the company said in a statement Thursday. Analysts had predicted that a majority of shareholders would opt for the so-called scrip dividend, given the 5 percent price discount on the shares.

Statoil has cut investments by 35 percent from a peak of $20 billion in 2014 after oil prices sank. Following peers including Royal Dutch Shell Plc and BP Plc, the Norwegian company introduced the scrip dividend in a bid to further bolster cash flow, while avoiding cutting shareholder payouts outright. The company’s board intends to give 22 cents a share for all dividends payable in 2016.

Payment of the cash dividend will occur on or around 24 June 2015, the company said.

The Norwegian government has committed to keeping its 67 percent stake in Statoil intact, meaning it will have to accept shares in the same proportion as other owners. This would reduce the amount of cash the nation’s $860 billion sovereign wealth fund receives from the company. Europe’s biggest oil producer has already been forced to dip into its piggy bank for the first since it was set up in the 1990s.

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