The Board of Directors of Pantaloon Retail India Limited (PRIL) have approved a proposal to provide shareholders with one bonus share with different voting and dividend rights for every 10 shares held.
The new shares, called Class B shares, will get five per cent more dividend than ordinary shares and will be entitled to one vote for every 10 held.
According to the company, the record date will be fixed after the necessary approvals are obtained by the company.
Citing reasons for taking the initiative, Kishore Biyani, MD, PRIL, said that differential voting rights (DVRs) have become a widely-used innovative instrument in global markets, and by coupling a bonus issue with a DVR, the company is offering another alternative to its shareholders. “DVRs meet the different requirements of different shareholder groups, and with this issuance, we will be introducing a new financial instrument for the new economy,” he said.
Pantaloon will be among the first companies to offer such a financial instrument in India. Some of the global companies that have issued shares with differential voting rights include Berkshire Hathaway, Google and News Corp.