Cermaco To Return $16.1 Million Of Surplus Capital
Cermaco To Return $16.1 Million Of Surplus Capital In A 1 In 4 Share Cancellation
The Ceramco Board today advised the New Zealand Stock Exchange that subject to the consent of the High Court and Shareholder approval it would return $16.1 million of surplus capital to shareholders through a 1 for 4 share cancellation.
The funds for this return of surplus capital will come from the proceeds of the sale of New Zealand China Clays as announced by the Board on 6 April 2000.
In considering the application of funds from the sale, the directors have determined that this $16.1 million is in excess of the company's current and anticipated needs. The directors have resolved that the return of capital should be effected by way of a court-approved arrangement under Part XV of the Companies Act 1993.
Based on the closing price on Monday 17th April of $1.59, 1 in every 4 shares in the company held by each shareholder will be cancelled and each shareholder will receive $1.59 for each share cancelled.
Currently there are 40,443,809 shares on issue and this pro-rata share cancellation will reduce the number of shares on issue to 30,332,856.
The share cancellation and return of surplus capital will occur in late July conditional upon settlement of the sale of New Zealand China Clays.
The Board believes that this share cancellation and return of capital is fair to all shareholders as it is a pro-rata distribution.
The amounts to be distributed to shareholders in accordance with the arrangement will be treated as a return of capital, not as a dividend for New Zealand income tax purposes. Accordingly, imputation credits will not be attached to such amounts.
The Directors note that this is the first step in the rationalisation of the Ceramco Group subsequent to the proposed sale of New Zealand China Clays.
There will be costs involved in the rationalisation and funds may also be required for the future development of Bendon. However it is the intention of Directors to return additional funds to shareholders when possible.
Full details of this proposal, together with details on the future of the Ceramco Group will be contained in the Notice of Meeting and other documentation to be sent to Shareholders in mid May.