Hi and thank you very much @Cuixot. I am very pleased to learn...

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hopalongpetrovski

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04/01/24

11:06

Post #: 71721664
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Originally posted by Cuixot ↑

Good points . Please see my thoughts (not advice) below :

The opies have same consideration as a regular share wrt capital gain, hence if you have the opies more than 12 months a 50%CGT will be applied by the ATO.

If you don't sell the opies, but convert them to heads, you don't pay CGT on oppies (you have not accrued a Capital Gain), but the new IMU shares you receive will be considered as you bought them at the option execution price ( plus option purchase price if you bought the oppies) on the conversion date. Hence CGT timer is reset to 0.

If everything goes average, within a couple of years IMU will be worth several $ per share. Oppies will tend to be just 11-12c bellow heads ...

In this pricing scenario if you just want the cash, then you would be better off selling the options (if held for longer than 12 months) , as you would pay half of the capital gain.

If you want to maximize exposure to IMU and use the capital somewhere else during the next 2.5 years you sould convert as late as possible, assuming the later the higher the value of IMU and IMUOEs (that's what we assume by investing in IMU).

To maximize return on capital, to convert, you would better off by pouring fresh capital to pay for the conversion price, so you keep all your heads and all oppies are converted to heads.

If no cash is available I guess that selling some heads (higher priced that Options and probably with a higher cost base) would minimize the shares you are going to sacrify for conversion, and hence maximizing you exposure to IMU.

In the other hand if you want to participate in a dividend or cash distribution by IMU, then you would need to convert options to heads.

In a TO, it would depend on how options are treated in the deal. If we are forced to convert them for the TO, then the CGT would be massive if the time between conversion and the implementation of the scheme is less than 12 months. If the TO includes also the acquisition of the oppies then it would be better not to convert to minimize CGT.

Just my thoughts on how I would move based on past experience and some reading. Please feel free to correct me if I'm wrong.

Have a nice and safe day!

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Hi and thank you very much @Cuixot.
I am very pleased to learn that revenue from sale of the oppies also benefit from 50% CGT relief after 12 months from allocation.
I am in no hurry to sell as expect, as you say, for IMU to increase in value over time.
Most likely I will sell some heads to pay for conversion when the time comes but it will be decided at that time by their relevant valuations and my individual circumstance.
Appreciate your mention of other possible scenarios, particularly regarding TO which could potentially be a fly in the ointment regarding options but I guess overall a positive in regards overall valuation.
Cheers and Thank you again for your reply.

IMU Price at posting: 12.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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