PARIS, March 25 (Reuters) - Trade unions have asked the French government to back their proposal that energy group Engie scrap its planned dividend payout for 2019, to enable it to secure cash flow, and help reboot the economy once the coronavirus crisis is over.
In a letter to the state, a shareholder in Engie, the unions urged French economy minister Bruno Le Maire, to vote against Engie’s planned dividend payment of 0.80 euros per share for 2019, up 7% from its previous dividend.
Engie declined to comment.
The French government holds a 23.6% stake in Engie. Forgoing the 2019 dividend would represent a shortfall of approximately 461 million euro ($498.85 million).
The unions, that includes the main hardleft CGT and FO, and the moderates CFDT, CFTC and CFE CGC, said in a joint letter that Engie must do everything in its power to secure its cash flow in order to support its customers and suppliers.
“For the coming years, in order to secure employment and ensure the development of the group in the energy transition, we propose to introduce a dividend policy proportional to the group’s net income,” the unions added in the letter.
The unions want the dividend to be at around 50% of Engie’s net income in future.
The gas and electricity supplier’s dividend was expected to be voted on during a shareholders general assembly meeting on May 14.
Companies are under increased pressure to review their dividend payouts as the coronavirus crisis hits the global economy. European planemaker Airbus on Monday, joined U.S. rival Boeing BA.N in scrapping its 2019 dividend.
French economy minister Le Maire on Tuesday, asked companies, especially the largest, to show the “moderation” in their dividend payment policy.
$1 = 0.9241 euros Reporting by Benjamim Mallet Writing by Bate Felix Editing by Alexandra Hudson