Royal Dutch Shell Plc (RDSA and RDSB) two different classes of publicly traded shares are designed to represent two classes of stock ownership in the company’s capital structure, which is consistent with most other major oil companies. The A Shares trade on the Amsterdam and London Stock Exchanges.
The B Shares trade on the London Stock Exchange (LSE) and represent limited liability stock that carries no voting rights. The A Shares are the only shares that entitle their holders to receive dividends paid every quarter. The B Shares are the only shares that entitle their holders to receive cash instead of dividends paid every quarter. The conversion of the A Shares into B shares has only been made possible through a series of transactions whereby Shell transferred large quantities of its debt.
As a result, the additional capital raised by such transactions effectively funded the equity investment in existing fuel supply agreements taken from the cash flow generated from those fuels and assets to be held (in equal amounts) on behalf of shareholders to cover future cash flow.
RDSA Vs. RDSB
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in the Netherlands, a top global oil and gas producer. It operates in over 90 countries worldwide.
A Dutch Royal Charter founded the company in 1889 as a joint venture to exploit the mineral resources of the African continent. Headquartered in The Hague, the Netherlands, Royal Dutch Shell has numerous corporate acquisitions. It is currently ranked 22nd on the Fortune Global 500 list of companies and 30th on the Forbes Global 2000 list of companies.
Royal Dutch Shell is a firm that operates in the oil and gas industry. The company has two classes of shares – A shares and B shares. Both types have equal voting rights, meaning any shareholder can vote on important issues such as electing directors and passing resolutions.
However, the A shares have 10 votes per share while the B shares have one. The equity capital of the company is divided into two parts. One part is invested in existing fuel supply agreements taken from cash flow generated from those fuels and investments to be held (in equal amounts) on behalf of shareholders to cover future cash flow. Another portion today forms an additional investment made via further acquisitions under vast petrochemical, metals, natural gas, and ethanol business sectors globally.
What is RDSA?
The Shell Group is the world’s second-largest integrated oil company by production. In Amsterdam, the Royal Dutch Petroleum Company (RDP) was founded on July 31, 1890. It was incorporated as a holding company for various companies that invested in the overseas exploration of petroleum. Still, it had no subsidiary companies until 1891 when new subsidiaries started active operation: “Shell Transport & Trading NV” and “Royal Netherland Petrochemical Company NL”.
Shell is an integrated company in the global oil and gas industry. It has over forty primary activities operating through separate business entities divided into three segments: Exploration & Production, Marketing & Trade, and Chemicals.
The Royal Dutch Shell A shares are a type of equity security issued by the Dutch oil and gas company Royal Dutch Shell. It is the Dutch equivalent of a US public company. The term “A Share” derives from the fact that they are listed on both the Amsterdam and London Stock Exchanges, where shareholders have to accept either one A share or zero B shares to gain access to ordinary voting rights in general meetings of Shell’s shareholders.
What is RDSB?
The Royal Dutch Shell B shares are an investment product offered by The Royal Dutch Petroleum Company (RDP) to allow investors to profit from the substantial cash flow generated each year via dividends paid out of its massive oil and gas production. These are “B Shares,” which means that they give their owners one vote per share at General Meetings but do not provide for financial participation in decisions about RDSC’s general management or composition.
A section of the Society’s Website on Royal Dutch Shell and its subsidiaries – providing details about transactions, associations as well as discussions among other oil companies The Royal Dutch Group is a company that focuses mainly on petroleum refining processes.
The core business of the Royal Netherlands Shell B shares (RDSB) was transportation, to which were added ExxonMobil assets in Venezuela and Aruba. Oilfield supply logistics have also been incorporated within these activities by using many of the assets acquired by ExxonMobil. The RDSB contributed to expanded capabilities in this area.
Difference Between RDSA VS RDSB
- The debt-to-equity ratio for RDSA is 56 %, while it stands at just 9 % for RDSB.
- The total market value of RDSA is £ 188.4 billion, compared to RDSB’s £ 163.8 billion.
- The dividend yield offered by RDSA is currently 2.5%. However, RDSB pays out a dividend of 3.3%.
- RDSA was introduced in 1973 and is traded on both the Amsterdam and London Stock Exchanges, while RDSB is only listed on the London Stock Exchange.
- A Share in RDSA entitles the owner to one vote at General Meetings. In contrast, a holder of RDSB shares has one vote per share but does not have any rights to participate in decisions about Shell’s general management or composition.
Conclusion
The main differences between these two shares are found in share ownership and participation. However, there is no substantial difference between these companies’ operations or other essential characteristics. Either of them also offers very little liquidity for investors. Both companies do not offer a derivative product such as futures contracts, which can hedge against price movement. But currently, maintain low trading volume across many competing exchanges for each company’s securities due to the lack of significant excess demand for either share to prevent price manipulation.