Ann: Capital restructure and EGM, page-4

Why announce a distribution to buyback shares @ 85c when they could just buy directly off shareholders without a distribution at a lower price?

@Chao88

My understanding is that not a single share is going to be bought back by the Company at 85c (or at any other price, for that matter).

The share consolidation here is merely cosmetic, it does not have any economic value; in other words, all that matters from an economic perspective is the 8.5c capital return, which is essentially the same thing as a tax-free special dividend.

Unlike in a buyback, a shareholder’s fractional ownership of the Company will not be increased as a consequence of this restructuring, unless one chooses to use their cash distribution to purchase more shares at their prevailing market price.

The reason why Management have chosen to structure things this way, as opposed to just declaring a special dividend, is probably that a capital return plus consolidation does not affect their franking credit balance (which is admittedly small, at just over 2m$, but not zero) and is therefore more tax-efficient.

Cheers