from what I read - the deal is: say you have 10,000 shares - value is $1.52 x 10 000 = $15200 fully franked dividend of 0.2027$/share - $2027. Expect share price to drop to $1.30. so value is $13,000. returned capital - $2027 also (as the dividend is 40m and the equity reduction is 40m) but you get reduced holding to 8476 shares (guess you pay CGT on this so newer holders may be disadvantaged 50% on tax component) - as number of shares reduced with the equity pay out the share price should be maintained on this payout - but you're paying tax on the gains.
market cap drops from 300m to 220m. but future dividends higher by 15% as number of shares reduced.
let's see if the market like the reduced equity and reduced number of shares on offer - or if they would have preferred to see an investment made with the capital and the business allocating more capital to growth and transformation of the business for the future. an announcement on the next strategic investment or business area would be great - but I guess you can only make the announcement when you have locked away a deal. the shareholders - mainly board and employees will be cashed up this Christmas - that's a good thing! once they get over the hangovers - they can work on next years revenue.
EZL Price at posting:
$1.52 Sentiment: Hold Disclosure: Held
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