Repsol SA (REP), battling to avoid a cut in its credit rating, said about 64 percent of investors accepted dividends in stock as Spain’s largest oil company hoards cash.
Repsol issued 35.3 million shares to offer equity payments, raising its capital 2.9 percent, it said in a statement today. The take-up of stock and a 5.6 percent cut in the final dividend to 54.5 euro cents (67 U.S. cents) a share reduced the payments in cash by about 460 million euros, Bloomberg calculations show.
“This is positive,” said Peter Hutton, an analyst at RBC Capital Markets in London. “It gives them much more room on the dividend and frees up cash.” The acceptance of Repsol’s offer by non-strategic shareholders was probably high, Hutton said.
Moody’s Investors Service, which like Standard & Poor’s and Fitch Ratings rates Repsol at its lowest investment grade, cut the outlook to negative from stable on June 29 on concerns the European sovereign debt crisis will spread to corporate debt.
Repsol, down 49 percent this year in Madrid trading, fell by 5 percent to 12.27 euros today.
“We’re happy that shareholders see the value in Repsol shares,” Kristian Rix, a Madrid-based spokesman, said by phone.
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