Australia's largest stock trading and investment forum Australia's #1 stock forum

AVG

Click for more information

3.13%

15.5¢ australian vintage ltd

So what is the tax treatment for shareholder? Does anyone know?

First 5 Last

Share
Profile

Follow
pjb63

220 Posts.

21

24/05/21

17:09

Post #: 53380302
Share

Originally posted by Transversal: ↑

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

Expand

So what is the tax treatment for shareholder? Does anyone know?

AVG Price at posting: 76.5¢ Sentiment: Hold Disclosure: Held
Upvote

0 Great analysis

Reply

Top Stories

BIO

Biome unveils three year revenue target up to $85M – but are 3Y targets enough to excite?

AZL

Brine and shine: Arizona Lithium wins early stage eco approval to commence wellpad #2 at Prairie

PAM

PAM secures high-grade Chilean copper play in strong territory

BOE

$550 million Jabiluka uranium offer comes unstuck as Government rules lease won't be renewed

IVZ

Invictus banks US$5M from Zimbabwean investment fund in support of Cabora Bassa

There are more pages in this discussion • 6 more messages in this thread...

First 5 Last

Add AVG (ASX) to my watchlist

(20min delay)
Last 15.5¢		Change -0.005(3.13%)		Mkt cap ! $51.06M

Open	High	Low	Value	Volume
16.0¢	16.5¢	15.5¢	$123.7K	776.5K

Buyers (Bids)

No.	Vol.	Price($)
3	117820	15.5¢

Sellers (Offers)

Price($)	Vol.	No.
16.0¢	19189	2

View Market Depth

No.	Vol.	Price($)
3	117820	0.155
8	90600	0.150
1	7634	0.145
1	80000	0.135
1	8338	0.120

Price($)	Vol.	No.
0.160	19189	2
0.165	45606	7
0.170	50756	5
0.175	684162	6
0.180	221920	5

Last trade - 16.10pm 29/07/2024 (20 minute delay)

AVG (ASX) Chart