Dividend recapitalisation: cash for shareholders without selling a share
In brief. In a dividend recapitalisation the company borrows and pays the money to its shareholders as a special dividend. Shareholders receive cash without selling shares; the company carries more debt, typically repaid over five to seven years.
A worked example
EBITDA of EUR 10 m and existing debt of EUR 5 m. A bank will lend up to 3 times EBITDA, or EUR 30 m. After repaying the existing debt, EUR 25 m is distributed. The 100 % shareholder receives EUR 25 m before tax and keeps the whole company.
What the market shows
In the United States, USD 70.2 bn of loans funded dividend recaps in the first eleven months of 2025, one of the highest levels since 2008, and average leverage rose from 4.2 to 5.2 times EBITDA after the dividend. In February 2026, CVC-owned Syntegon raised about USD 1.89 bn of loans to pay a EUR 550 m dividend.
Conditions for it to work
- Regular cash flows and low existing debt.
- Sufficient distributable reserves and agreement of other shareholders.
- Covenants compatible with planned investment.
- A stress test: the company must still repay if EBITDA falls by 20 to 30 %.
Tax
The dividend is taxed according to the shareholder's residence: 31.4 % flat rate for an individual in France, participation exemption for a holding, no personal tax in the UAE. Interest on the new debt is deductible within local limits.
Compared with other routes
A recap keeps full control but leaves all the risk with the company. An owner buy-out brings in a partner and can defer tax on part of the price. A sale and leaseback creates rent rather than debt.
Facing a decision like this?
We read every request personally and reply within 72 working hours when we believe we can be useful. The first review is free and without commitment.
Request a reviewSources
This guide is general information. It is not investment, legal or tax advice. The rules quoted must be checked by your advisers before any decision.