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$10.91 pacific current group limited

GQG Partners, page-72

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saintex

4,442 Posts.

474

22/09/21

15:22

Post #: 56268842
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Originally posted by MikesLM: ↑

I believe the relevant CGT relief of interest is likely to be demerger rollover relief.

However, where PAC simply transfers the GQG shares to PAC shareholders, I suspect this would not qualify for demerger rollover relief. This is because GQG is not part of the PAC group, that is, it is not a 'demerger subsidiary' of PAC to be separated (it only holds a 5% stake, but the requirements for relief is 20%). Therefore, this will likely have CGT implications for PAC (due to change of beneficial ownership), and tax implications for PAC shareholders as either a dividend and/or return of capital would generally be declared, satisfied by the transfer of the GQG shares (ie non-cash).

The alternative could probably be what another ASX stock is presently contemplating. I refer you to CDM. They have an asset in TMC which just listed on the NASDAQ and has now represent a disproportionately high % of the NTA (they updated the NTA only after TMC listed - to more than 5x the cost price). One option they are looking at is to firstly transfer this TMC asset into a new LIC or Fund, and doing a demerger of the new entity to CDM shareholders (demerger relief may be available but it's not clear until ATO class ruling is provided). This new entity would also aim to start to invest in other assets with day 1 seed money from CDM. Some shareholders are not a fan of this option.

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Thanks MikesLM for this detailed answer.
I think I saw another example of in-specie distribution announced today : African Energy (AFR).

PAC Price at posting: $7.07 Sentiment: Buy Disclosure: Held
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0 Great analysis

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