I think the proposal to pay hybrid holders two distributions and pay the rest to ordinary holders would violate the Corporations Act.
SECT 254T
Circumstances in which a dividend may be paid
(1) A company must not pay a dividend unless:
(a) the company's assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
(b) the payment of the dividend is fair and reasonable to the company's shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the company's ability to pay its creditors.
The proposal would fail on either or both of (b) and (c)
In addition the under Section 588G it is a Director's duty to prevent insolvent trading by company so it unlikely the board would put their reputations on the line especially since their own virtually no stock
There are probably other areas of Corps Law violated basically guaranteeing this ends up in the courts for years
SRS Price at posting:
3.3¢ Sentiment: Buy Disclosure: Held
