EUROPE PAYS $8 BLN
In a record downturn for the oil industry, cash is everything to companies and dividends are everything to their investors. One tool is helping Europe's three biggest producers preserve both, but there's a long-term price to pay.
Royal Dutch Shell Plc, Total SA and BP Plc will retain $8 billion a year in cash by giving investors the option of receiving payouts in shares instead, according to Jean-Pierre Dmirdjian, an analyst at Liberum Capital Ltd. That's equivalent to about 8.5 percent of total cash and equivalents currently on their books, making the so-called scrip dividend a vital tool as companies curb spending to ride out the slump in oil prices.
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