re: Ann: Directors Resolve No Dividend on Cla... I was under the impression that CMI could redeem the class A's at $1.20 at any time. However I cannot find any documentation that proves this. Anyone know?
If this is the case I would have thought offering less than $1.20 would be pointless.
If they offered say $1 - many would take it and run, however quite a few wouldn't. Which means that they would be required to pay a div of 14c full franked (20c grossed up) before being able to pay any div to the ordinaries. They would also be required to continue paying this amount if they wanted to maintain divs to the ordinaries. Costing them alot more in the long run than just paying the face value.
Regarding debt, CMI would have around $20 million in the bank currently. Paying them out at $1.20 would cost around $33.6M. Taking on 13-15M debt for a company with FCF of over $7M and book value of $66M is nothing. If they could get $8.5M off Hoffmeister, the debt burden would be approaching zero.
Ann: Directors Resolve No Dividend on Class A Sha, page-6
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