Dividend Clawback (redirected from claw)

Dividend Clawback

An arrangement under which those financing a project agree to contribute, as equity, any prior dividends received from the project to cover any cash shortages.

Notes:

When there is no cash shortfall, those investors who provided funding are able to keep their dividends. A dividend clawback arrangement provides incentive for a project to remain on budget so that investors do not have to return dividends received prior to a cost overrun.

See also: Declaration Date, Dividend, Dividend Yield, Double Taxing, Project Finance

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Dividend clawback

An arrangement under which sponsors of a project agree to contribute as equity any prior dividends received from the project to the extent necessary to cover any cash deficiencies.