Molopo Energy (ASX:MPO) has revealed that it plans to return a third of its $61 million cash holding to shareholders by way of a special dividend.
Molopo is currently capitalised at $41 million and has no debt.
The planned capital return of around $20 million, or $0.08 per share, equates to a 50% dividend payment based on Molopo's current share price of $0.16.
The remaining $40 million or so will be divided equally between investments in the Western Canada sedimentary basin, and passive investments in Australian oil and gas companies.
In June this year, a substantial holder in Molopo, Bentley Capital (ASX:BEL), received an offer of $0.25 per MPO share for its entire 13.66% holding, however the parties did not reach a binding agreement.
The capital return is subject to legal advice as to what extent current litigation involving Molopo allows it to reduce its capital.
The company has commenced working with legal counsel to obtain confirmation of its ability to execute the proposed return of capital.
In March 2011, a subsidiary of Molopo was served with a statement of claim by a joint venture partner in the Spearfish project in Canada, seeking $36 million in damages.
Molopo's subsidiary filed a counterclaim for $3.2 million, plus interest and costs, which it believes is owing to it by the claimant.
No date for trial has been set.
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