{"id":96764,"date":"2025-12-03T11:43:53","date_gmt":"2025-12-03T14:43:53","guid":{"rendered":"https:\/\/murray.adv.br\/?p=96764"},"modified":"2025-12-03T11:43:53","modified_gmt":"2025-12-03T14:43:53","slug":"companies-seek-to-pay-dividends-with-redeemable-preferred-shares","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/","title":{"rendered":"Companies seek to pay dividends with redeemable preferred shares"},"content":{"rendered":"
\n
\n
\n
Novo Mercado firms ask B3 stock exchange to ease rules amid push to preserve tax exemption<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
\n
\n
\n
\n
<\/div>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

12\/03\/2025<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

\n
\n
\n
\n

Major publicly traded companies listed on Brazil\u2019s Novo Mercado, the B3 segment with the highest corporate governance standards, are preparing to ask the Brazilian stock exchange for flexibility that would allow them to distribute dividends using redeemable preferred shares as a form of stock bonus.<\/p>\n<\/div>\n

\n
\n

This mechanism would enable companies to distribute dividends this year without an immediate cash outflow, allowing them to benefit from the income tax exemption on accumulated profits calculated through the end of the year.<\/p>\n<\/div>\n

\n

Although\u00a0the Senate\u2019s Economic Affairs Committee (CAE) approved a bill on Tuesday (2) extending the deadline\u00a0<\/a>for calculating and paying such dividends through April of next year\u2014aligning it with companies\u2019 annual financial reporting\u2014the search for tax-efficient payout strategies remains urgent.<\/p>\n<\/div>\n

\n

The bill also introduced the concept of a \u201cnon-taxable profit reserve,\u201d which would allow companies to distribute these earnings tax-free until 2028. This provision aims to give legal clarity to corporations, whose regulations require dividends to be paid within the same fiscal year in which they are declared.<\/p>\n<\/div>\n

\n

Still, uncertainty remains over whether the Senate-approved text will survive unaltered, as the bill must return to the Lower House and then be signed into law. Tax experts recommend companies proceed with planning as though the original deadlines remain, to maximize the tax-exempt portion of retained earnings.<\/p>\n<\/div>\n

\n

To that end, several companies are evaluating whether to distribute dividends using redeemable preferred shares. Under current rules, companies listed on the Novo Mercado are allowed to issue only common shares, which come with voting rights.<\/p>\n<\/div>\n

\n

Temporary waiver<\/strong><\/p>\n<\/div>\n

\n

As a result, requests have begun arriving at B3 for a temporary waiver that would allow these companies\u2014some of the country\u2019s largest, with billions of reais in retained profits\u2014to issue redeemable preferred shares for this specific purpose, without violating listing rules.<\/p>\n<\/div>\n

\n

The Brazilian Association of Listed Companies (Abrasca) is leading this effort after being approached by member firms. In recent days, the association has surveyed companies to assess demand for such issuances, according to a source. Companies confirmed their interest on Tuesday, the person said.<\/p>\n<\/div>\n

\n

B3 is expected to decide in the coming days whether to grant this flexibility, so companies can hold shareholder meetings before year-end. Brazilian corporate law requires a minimum 21-day notice to call such meetings.<\/p>\n<\/div>\n

\n

Abrasca told its members the timeline is tight, as companies choosing this route must complete corporate approvals before year-end. In a letter reviewed by Valor, the association said B3 has shown a \u201cwillingness\u201d to evaluate an \u201cexceptional treatment with urgency.\u201d<\/p>\n<\/div>\n

\n

A person close to the matter said B3 is currently reviewing the request. Approval would depend on the condition that the \u201cone share, one vote\u201d principle is preserved, meaning the redeemable preferred shares must carry voting rights equivalent to common stock until they are redeemed. A decision is expected soon.<\/p>\n<\/div>\n

\n

Pressure on currency<\/strong><\/p>\n<\/div>\n

\n

\u201cRedeemable preferred shares have already been used by some private companies,\u201d said Conrado Stievani, a capital markets partner at law firm BMA.<\/p>\n<\/div>\n

\n

He noted that this strategy not only helps companies avoid draining cash or increasing debt but could also ease pressure on the exchange rate this month. That\u2019s because a significant share of these companies\u2019 stock is held by foreign investors, who would repatriate the funds if dividends were paid in cash.<\/p>\n<\/div>\n

\n

By paying dividends in redeemable preferred shares, companies can stagger the redemption, essentially converting the shares to cash, over the coming years.<\/p>\n<\/div>\n

\n

This approach has already been taken by Axia (formerly Eletrobras), which announced around R$40 billion in retained earnings this year and opted to pay shareholders in redeemable preferred shares. These can be redeemed in future years, without triggering income tax. Axia, currently listed on B3\u2019s Level 1 governance segment, which allows preferred shares, plans to migrate to Novo Mercado.<\/p>\n<\/div>\n

\n

Stievani added that his firm has seen this structure increasingly adopted by privately held companies. Publicly listed firms are also exploring other options, especially those with large foreign investor bases.<\/p>\n<\/div>\n

\n

One such strategy is to launch follow-on offerings and extend dividend rights to new investors participating in the offering. \u201cIn those cases, the company aligns the right to receive dividends with the new shareholders,\u201d he explained, noting that companies with strong stock performance are particularly interested.<\/p>\n<\/div>\n

\n

He said the more conservative companies are likely to announce the dividend and complete the offering still this year, despite the shortened capital markets calendar in December. Others may announce now but execute the offering next year.<\/p>\n<\/div>\n

\n

Erickson Oliveira, a partner at law firm Levy Salom\u00e3o, said the pace of dividend announcements reflects a split between more conservative companies, with available cash, and others. \u201cOur advice is that companies stick to their plans and act as if the law hasn\u2019t changed, given the tight deadlines,\u201d he said.<\/p>\n<\/div>\n

\n

Thiago Jos\u00e9 da Silva, a corporate law partner at Pinheiro Neto Advogados, agreed. He recommends companies declare dividends on profits accumulated through the end of September, based on their third-quarter results, and pay them if cash is available. \u201cThat way, they protect as much of the retained earnings as possible,\u201d he said.<\/p>\n<\/div>\n

\n
\n

For profits from the last quarter of the year, companies must wait until their annual financial statements are released next year. Silva said companies are exploring alternative solutions in cases where the profit reserve doesn\u2019t match available cash<\/p>\n

*By\u00a0Fernanda Guimar\u00e3es\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n

\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Novo Mercado firms ask B3 stock exchange to ease rules amid push to preserve tax exemption       12\/03\/2025 Major publicly traded companies listed on Brazil\u2019s Novo Mercado, the B3 segment with the highest corporate governance standards, are preparing to ask the Brazilian stock exchange for flexibility that would allow them to distribute dividends […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[26619],"class_list":["post-96764","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-companies-seek-to-pay-dividends-with-redeemable-preferred-shares"],"yoast_head":"\nCompanies seek to pay dividends with redeemable preferred shares - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Companies seek to pay dividends with redeemable preferred shares - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Novo Mercado firms ask B3 stock exchange to ease rules amid push to preserve tax exemption       12\/03\/2025 Major publicly traded companies listed on Brazil\u2019s Novo Mercado, the B3 segment with the highest corporate governance standards, are preparing to ask the Brazilian stock exchange for flexibility that would allow them to distribute dividends […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\" \/>\n<meta property=\"og:site_name\" content=\"Murray Advogados\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-03T14:43:53+00:00\" \/>\n<meta name=\"author\" content=\"Gelcy Bueno\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gelcy Bueno\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\"},\"author\":{\"name\":\"Gelcy Bueno\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"headline\":\"Companies seek to pay dividends with redeemable preferred shares\",\"datePublished\":\"2025-12-03T14:43:53+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\"},\"wordCount\":922,\"keywords\":[\"Companies seek to pay dividends with redeemable preferred shares\"],\"articleSection\":[\"Murray News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\",\"url\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\",\"name\":\"Companies seek to pay dividends with redeemable preferred shares - Murray Advogados\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#website\"},\"datePublished\":\"2025-12-03T14:43:53+00:00\",\"author\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"breadcrumb\":{\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"In\u00edcio\",\"item\":\"https:\/\/murray.adv.br\/en\/home\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Companies seek to pay dividends with redeemable preferred shares\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/murray.adv.br\/en\/#website\",\"url\":\"https:\/\/murray.adv.br\/en\/\",\"name\":\"Murray Advogados\",\"description\":\"PLG International Lawyers\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/murray.adv.br\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\",\"name\":\"Gelcy Bueno\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"caption\":\"Gelcy Bueno\"},\"url\":\"https:\/\/murray.adv.br\/en\/author\/news\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Companies seek to pay dividends with redeemable preferred shares - Murray Advogados","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/","og_locale":"en_US","og_type":"article","og_title":"Companies seek to pay dividends with redeemable preferred shares - Murray Advogados","og_description":"Novo Mercado firms ask B3 stock exchange to ease rules amid push to preserve tax exemption       12\/03\/2025 Major publicly traded companies listed on Brazil\u2019s Novo Mercado, the B3 segment with the highest corporate governance standards, are preparing to ask the Brazilian stock exchange for flexibility that would allow them to distribute dividends […]","og_url":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/","og_site_name":"Murray Advogados","article_published_time":"2025-12-03T14:43:53+00:00","author":"Gelcy Bueno","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Gelcy Bueno","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#article","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/"},"author":{"name":"Gelcy Bueno","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"headline":"Companies seek to pay dividends with redeemable preferred shares","datePublished":"2025-12-03T14:43:53+00:00","mainEntityOfPage":{"@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/"},"wordCount":922,"keywords":["Companies seek to pay dividends with redeemable preferred shares"],"articleSection":["Murray News"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/","url":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/","name":"Companies seek to pay dividends with redeemable preferred shares - Murray Advogados","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/#website"},"datePublished":"2025-12-03T14:43:53+00:00","author":{"@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"breadcrumb":{"@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/murray.adv.br\/en\/companies-seek-to-pay-dividends-with-redeemable-preferred-shares\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"In\u00edcio","item":"https:\/\/murray.adv.br\/en\/home\/"},{"@type":"ListItem","position":2,"name":"Companies seek to pay dividends with redeemable preferred shares"}]},{"@type":"WebSite","@id":"https:\/\/murray.adv.br\/en\/#website","url":"https:\/\/murray.adv.br\/en\/","name":"Murray Advogados","description":"PLG International Lawyers","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/murray.adv.br\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e","name":"Gelcy Bueno","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","caption":"Gelcy Bueno"},"url":"https:\/\/murray.adv.br\/en\/author\/news\/"}]}},"_links":{"self":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/96764","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/comments?post=96764"}],"version-history":[{"count":2,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/96764\/revisions"}],"predecessor-version":[{"id":96766,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/96764\/revisions\/96766"}],"wp:attachment":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/media?parent=96764"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/categories?post=96764"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/tags?post=96764"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}