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If he would have meant 90 working days he would have stated 90 working days!
AGE
I don't think you can put out an rns saying you are paying a divi and then don't as it was the main reason for selling the company .
Personally, the delay suits me, when I can I will keep adding, anything below 1.7pence is a bonus. Yep, still a chance that the div may not be paid out, but the risk is less than what it was.
It wouldn't surprise me if we don't get the money by 12 June, or whatever the cut off is and Robin comes back saying he meant 90 working days......
Don’t worry Geng ……. RY & Co will have that well and truly sorted already.
OTL
I bet the delay is because Robbing is still trying to work out how he can get a bigger chunk of that $35Mil out for himself in some way!
Once the cash is paid out his gravy train will be under much more scrutiny with any new venture.
I did a calculation and assuming we received a net 34.7m USD as AMC’s solicitors will deduct the balance of their fees from the 35m USD then on the basis the USD deposit interest rate is 3.50% then AMC will receive 207,480 Pounds equivalent if the monies were left on deposit the day after they were received.
The interest earned assuming the monies are kept on deposit until the 31 May 2023 equates to just 0.01 pence on the share price.
Sterling has appreciated against the USD and when AMC received the monies the fx rate was 1.2159 and today it is 1.2493 so the USD has depreciated by 2.75% which is a faster annualised rate than the USD deposit interest rate.
AGE
JulianM you make valid comments re the RNS dated the 3 October 2022 as it stated:
“With the key approvals now in hand, we shall complete our assessment of the classification of the dividend regarding shareholder taxation”
It is now the 4 April 2023 so six months have gone by since they issued the RNS.
AMC’s Solicitors will seek an opinion from a tax barrister as to whether the special dividend is income in the hands of shareholders and hence subject to U.K. dividends tax or whether it is a return of capital.
What we have to remember is that if he forms an opinion that it is a return of capital without having a precedent then HMRC are going to challenge it as they will be of the opinion that it is income in the hands of shareholders as it is described as a special dividend and dividends are income receipts in the hands of shareholders.
In the First Nationwide v HMRC, HMRC argued that the payment of dividends out of a share premium account was not income in the hands of shareholders but it was a return of capital because Nationwide had claimed a 51m deduction for expenses of management.
If the Judges found in favour of HMRC that the dividends were a return of capital and not income then HMRC would win the case and Nationwide would end up paying more tax.
The Judges found in favour of Nationwide.
In this case it was favourable to HMRC to contend that it was a return of capital but with AMC’s special dividend it will be in HMRC’s favour to contend that it is income in our hands as they will want us to pay dividends tax on 25.8m pounds worth of dividends.
I can not find any legal cases to use as a precedent where a BVI Company paid a special dividend when it does not have any realised profits to pay the dividend out of.
There are two issues with the payment of the dividend which are is the payment legal and is it a return of capital.
As it is a BVI Company it is legal but if it were an English Company it would be illegal as it does not have sufficient distributable reserves to pay it.
I think the safest solution would be for the Board to structure the 1.80 pence as a return of capital rather than a special dividend if there is no precedent that states it is a return of capital as HMRC will challenge this and state it is income in the hands of shareholders.
If there is no certainty that the special dividend is a return of capital then shareholders would have to pay the costs for a tax tribunal which could take years to resolve.
Let’s see what the Board decide to do.
AGE
Agneiss-I agree that making appropriate arrangements takes a little time but as long ago as the 2nd October RNS when we were advised that The Russian Federation approved the deal they knew that they had the green light and could commence work on the mechanics of the issue of the dividend.So they have had 6 months to prepare and if they had the best interests of their shareholders in mind ,by paying the dividend asap,they would have been geared up to proceed as soon as the funds arrived,which was at least three weeks ago.So I am not impressed
Geng I had a look at the General Meeting paperwork re the sale and there was only one resolution which was to authorise the sale
There was no resolution for shareholders to vote on to approve the payment of the special dividend.
I did a bit of research and I found that for a U.K. Company the shareholders do not have to approve an interim dividend but they do have to approve the payment of a final dividend.
For a BVI Company there is no requirement for the shareholders to approve a final dividend it only needs the Directors to approve by resolution.
Hopefully if the Board receive advice that the special dividend is income in the hands of shareholders so subject to U.K. dividends tax that they will structure the payment of 1.80 pence via a different method than a special dividend so we do not have to pay U.K. dividends tax.
All of the above takes a considerable amount of time to organise so I think we will not hear anything from the Board until this is all organised!
AGE
Now 1.675 it's increasing by around 0.01P per day was 1.665 Friday and so on.
Slowly wring out the impatient!
As a UK Company can only pay a dividend if it has sufficient distributable reserves then it would be debited to retained profits however AMC is a BVI Company so I think it is going to be debited to accumulated losses as it cannot be debited to share capital as we will still own our share capital once the dividend is paid but the market value of that share capital will reduce by the value of the special dividend of 1.80 pence per share.
Going back to the Corpus principle i.e. "The main body or mass of a structure" which is used to determine if a payment is a return of capital or income in the hands of shareholders then even though the special dividend is very large the Corpus must stay intact as we still own the same number and class of shares.
I certainly do not envy the person who is going to give advice to the Board as to whether the special dividend is a return of capital or income in the hands of shareholders as it is an extremely difficult task.
AGE
People have made comments as to why we the Board have not issued an RNS re the dates for the record date, XD date and payment date.
Having looked at a great deal of information over the week end I have found it very difficult to come to a conclusion as to whether the special dividend is income in the hands of shareholders or whether it is a return of capital.
The Law Commission issued a document called Capital and Income in trusts: Classification and Apportionment and it is dated 6 May 2009 and it included the following statement:
The Hill approach was itself restated with
approval by Lord Reid in Rae (HM Inspector of Taxes) v Lazard Investment Co
Ltd:
There is no doubt that every distribution of money or money’s worth by an English company must be treated as income in the hands of the shareholders unless it is either a distribution in a liquidation, a repayment in respect of reduction of capital (or a payment out of a special premium account) or an issue of bonus shares (or it may be bonus debentures.
The problem is that AMC is a BVI Company and not an English Company.
It goes on to say the following:
The potential for the current law to give rise to inappropriate results can be
demonstrated by the example of the declaration of an abnormally large special
dividend, representing a significant proportion of the market value of the
company.
2.39 Normally, of course, the tendency of particular shares to yield a healthy dividend will enhance their market value. But if a company makes an unexpected and abnormal distribution of its profits in this way, the payment of such a dividend will result in a sharp fall in the market value of the company and so in the value of the trust’s shareholding. Yet the payment will be received by shareholders as income and, if a shareholder is a trustee, will be paid to the life tenant.
If you look at AMC's last set of interim accounts you will see it includes Non current assets classified as held for sale in the sum of USD 33.08m so now that the sale has completed and the proceeds this is going to be removed and replaced the bank account in Cash and other equivalents is going to increase by USD35m less legal fees etc.
When the special dividend is paid to shareholders the cash and other equivalents is going to reduce by circa USD 31.8m but the question is which account in the share capital and reserves section of the balance sheet will the dividend be debited to.
RNS dated 24 August 2022
We shall also assess various alternatives and considerations with regard to the impact on shareholder taxation of the dividend on completion of the Disposal upon payment of the funds.
Now that both completion and receipt of funds has take place then we should hear further from the Board!
AGE
AGE
Yet more useful information in the notice of General Meeting:
Key words are:
Cash balances of approximately US$39m
However the document is dated 8 August 2022 so 9 months ago so presumably cash must be less than the US$39m stated.
Future Strategy and Special Dividend
If the Disposal is approved by shareholders and completes in accordance with its terms, the Company will move forward as a cash shell in accordance with Rule 15 of the AIM Rules and retain cash balances of approximately US$39m after paying certain expenses and any taxes relating to the Disposal
AGE
Some more interesting information in the notice of General Meeting:
Key words are:
Should an acceptable reverse takeover opportunity not be identified and approved by the Shareholders, the remaining funds from the transaction less costs shall be distributed as a second special dividend.
---------------------------------------------------------------------------------------------------------------------------------------------------------------
The Disposal addresses Shareholder concerns about the initial transaction, including a more substantial initial consideration which is all delivered at Completion, and a commitment to the payment of a special dividend of 1.8 pence per share to be paid to Shareholders within 90 days of Completion. After Completion of the Disposal, the Company will become a cash shell and will seek to complete a reverse takeover which will require Shareholder approval within 12 months.
Should an acceptable reverse takeover opportunity not be identified and approved by the Shareholders, the remaining funds from the transaction less costs shall be distributed as a second special dividend.
The notice for the General Meeting included the following statement and various people have discussed the contents below months ago.
There are two separate things happening with one being the sale of the Irosta shares and the tax advice relates to this transaction and the other thing that is happening is the payment of the special dividend.
When you ask solicitors for advice they send you an engagement letter and it provides a detailed description of the work that they are going to carry out your behalf and you then sign two copies and you post them back to the solicitors and they then sign both copies and they retain one copy and then they post one signed copy back to you for your own records.
If the AMC Board would have asked for advice about the UK tax consequences of the payment of the special dividend then surely it would have been mentioned in the notice for the General Meeting?
I will wait to hear what the Board have to say but it is likely that they did not ask their solicitors for advice about the UK tax consequences of the payment of a special dividend.
If they did then why is that information not included in the General Meeting notice as it is very information that shareholders needed to be made aware of.
AGE
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Following receipt of the consideration of US$ 35 million, the Company intends to pay a special dividend of
1.8 pence per share to be paid to Shareholders within 90 days of Completion. The Company has
received tax advice that the Disposal is unlikely to attract capital gains or withholding tax. The Board
proposes that the record date and payment date for the distribution of the post-Completion dividend shall
be no later than 90 days following receipt of the consideration payment.
There are some interesting questions and answers on the AMC website but unfortunately nothing about whether the dividend is subject to UK dividends tax
“How big are the bonuses for the Directors for selling Kun-Manie”
Answer Team: There are no bonuses being paid to any of the Directors or staff. Dividends equal to that paid to the shareholders will be paid to the Directors and staff.
“Can’t Bering buy shares in the market to control the approval of the sale?”
Answer Team: No, as part of our agreements, the buyer is not allowed to buy shares in the market.
AGE
If you hold your shares via your brokers nominee account then the dividend will be paid into your share account.
If you have a share certificate then they will send you a cheque.
AGE
How will the dividend be paid?
It has been called a special dividend rather than a return capital but based upon the information contained in the postings I did today I think it is a return of capital so not taxed as income in the hands of shareholders and so not subject to U.K. dividends tax.
I think the dividend dates means the record date, XD date and payment date rather then 1.80 pence paid via a number of dividends all within 90 days.
AGE
When a listing makes a dividend payment it’s very common for the SP fall by a similar amount. But is this a dividend or a return of capital ? Return of capital will be deducted from the Market Cap & again the SP should reduce to reflect this. I note from the RNS, ‘dividend dates’ which may imply that the amount involved will be divided into multiple payments. I’m surprised that the Market Cap did not increase more upon receipt of the payment. It will be interesting to see how this transpires.
You seem to think you are teaching us all something ………You aren’t.It will be what it will be.Sit and wait.You’ll just wear yourself and your keyboard out for nowt.
I’m done
MD
MD we need shareholders who own just 5% of AMC’s share capital can requisition a General Meeting.
This failure of the Board to communicate with shareholders is the reason I would vote against any RTO.
Members of the Board have not provided any emails addresses to allow shareholders to contact them if they have concerns and they fail to respond to messages sent to them via the AMC website!
When you ring the PR Company using the telephone line on the AMC website no one answers and there is no answer phone system!
AGE
The biggest single thing that I have learned after 13 plus years of being an AMCshareholder is that we are always kept in the dark as much as the bod possibly can.Also NOTHING is ever clear and concise and EVERYTHING IS ALWAYS late.The notion that we will be party to any detail of legal advise given would be a completely new concept if it were to happen.They will do whatever is best for themselves and use any means to create a cloak over the proceedings.
We’ll get whatever we get when it suits them.That is who they are and what they do.
MD