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AGE, how did you know the solicitors were working on the deal for 2 years? I cannot understand that it is possible to buy AMC shares at 1.71 when we are going to receive a tax free dividend of 1.8 pence and still have remaining cash left together with a cash shell company.
Plus remaining cash shell of 0.50 pence. That must total 2.3 pence. Minimum. More on a good RTO and future prospects.
Yes, I confirm this has to be a return of Capital.
There are a few typo errors in my last post as I did it via my iPhone but the principles have included are correct!
Does any one have any comments?
AGE
Search on Google for share purchases and redemptions under the BVI business companies and you will find the following:
There is no concept of share capital under the Act. Instead the Act refers to the consideration paid for the issue with f a share. Where the nature of the payment is important to the shareholder for tax or other reasons, it would be necessary to look to the accounting principles under which the company’s financial statements are prepared or the tax laws of the place the shareholder is resident for tax purposes.
U.K. dividends tax is a tax on dividends that is income in the hands of shareholders.
The payment paperwork of a dividend out of a share premium account is prohibited by the U.K. Companies Act but prior to that prohibition the payment is of a dividend would be income.
The payment out of share capital in the U.K. is a return of capital and not income in the hands of AMC shareholders!
AMC’s lawyers have been working on the Irosta disposal for two years so they would have considered the U.K. tax implications of the payment of a special dividend.
I doubt very much that the Board would have got shareholders to vote to approve the payment of a special dividend if shareholders would then have to pay U.K. dividends tax on the 1.8 pence shares dividend.
I would imagine that the majority of AMC shareholders average share purchase price is above 1.8 pence so they would not want to pay tax on the special dividend.
Paying tax on a dividend when the dividend plus the cash retained in the Company after the payment of the dividend is less than shareholders average purchase price would be adding insult to injury!
AGE
What is c
Expect an announcement shortly by the board on the structure of the return and payment date. Should be a lot of buying when that is announced and movement over 2.0p
Hi BB,
A GM was held to approve the sale of Irosta and the payment of the 1.8 pence special dividend so there is no need to have another GM to classify the special dividend as a return of capital.
Have a look on Google and do some research the rules re U.K. Companies paying dividends and then look at the rules for BVI Companies and you will see that they are different.
A U.K. Company must have made sufficient after tax profits and have retained them in other words not paid the after tax profits out via previous dividends to be able to pay the next dividend.
But these rules do not apply to a BVI Company!
AGE
Agneissearner
The dividend has been called a special dividend. However it will most certainly be structured as a return of capital. No tax to pay.
So value increases from 1.8 to 2.33 p
Hi,
I assume that once the dividend (and I also assume that this will indeed be classed as a special “return of capital” dividend rather than normal “distribution of profit” dividend is recommended by the Board then we as shareholders will need to vote at an yet to be arranged GM to pass the recommendation and allow the payment to be made. On that basis, I do not see the payment being imminent (in the next few weeks). Possibly why the within 90 days has been stated.
BB2
Hope you are right AGE
ATB
DK
Gazzleberry in other words the special dividend is tax free whether you hold your shares via an ISA or an ordinary trading account.
I suspect the mm’s are pricing the share on the basis the special dividend is subject to U.K. dividends tax.
AGE
Gazzleberry a guy who was in my class at Eton works in Corporate Finance and he has advised me that the special dividend is a return of capital hence it is not subject to U.K. dividends tax.
A U.K. Company is only allowed to pay a dividend if it has sufficient distributable reserves in a words it has sufficient retained profits.
There is no such restriction for a BVI domiciled company as it can pay a dividend out of the share premium account or out of share capital as long as it meets the solvency requirements.
Look at AMC’s last balance and you will see it has accumulated losses so the special dividend is not being paid out of that so it is being funded out of share capital hence it is a return of capital.
AGE
The DMA trades are slowly increasing the average bid/ask. And the delay in paying out the divi is causing a few impatient holders to sell. Won't be many left in this category and given there is a definite 1.8p coming at some point, the price will start to rise.
Still a chance to buy at sometimes as low as 1.7 but this will be gone soon. Those big buyers will need to offer more to keep buying.
And so is the person who is buying 1m/1.5m/2m blocks of AMC shares!
AGE
I am certainly looking forward to receiving my tax free dividend!
AGE
Indeed and the Pound has strengthened against the USD since AMC received the 35m USD so the amount in Pounds has reduced since then.
At 1.2331 USD to the Pound the 35m USD less 300k USD for estimated remaining legal fees for the deal is 28.14m Pounds v a market cap shown on LSE fundamentals page is 23m Pounds!
AGE
"I think from the 15 March 2006 to the current date is more than sufficient time for the AMC Board to have created and delivered shareholder returns!"
Thery did. They presented PIs with ample opportunity to profit during two significant spikes. Some took advantage the majority didn't.
Pre-judging whether an RTO is worth pursuing before you even know anything about the intended RTO is, in my opinion, a bit rash but that's your choice.
TDT
RNS dated 6 March 2023
AGE
I cannot see any risk in the Company distributing the remaining cash in the Company.
I can see a great deal of risk allowing the Board to persue a RTO!
The RNS dates the 6 March 2003 stated the following:
The Company will continue to be on AIM as a Rule 15 cash shell which intends to provide enhanced opportunities to create and deliver shareholder returns.
The admission document states dealings in AMC shares commence in the Ordinary Shares on AIM on the 15 March 2006 and the placing price was 33 pence.
I think from the 15 March 2006 to the current date is more than sufficient time for the AMC Board to have created and delivered shareholder returns!
AGE
"....will have to distribute the remaining cash in AMC......"
Can't you see the risk in that? Just because you will vote against an RTO, an RTO that you know nothing about becuase one hasn't been identified yet, doesn't mean to say everybody else will.
I think the market is discounting any residual value post special divi distribution.
TDT
TDT the Board needs shareholders approval for a RTO which I would certainly vote against.
If enough shareholders vote against the RTO then the Company will have to distribute the remaining cash in AMC after the payment of the 1.8 pence special dividend.
AGE
That should have been:-
"..... can't be assumed to be 100% nail on."
TDT
Agneissearner
You're assuming there is now no risk and that clearly isn't the case. In the same way that Putin's "special military operation" was not foreseen payment of the special divi, until it actually happens, can be assumed to be 100% nail on. There is still the possibility that it will not happen. The 0.06p margin between the current ask of 1.74p and the special divi of 1.8p represent the risk factor.
As for the value of Amur once Kun Manie has been disposed of and its nothing more than a cash shell, well that one is anybody's guess. I think it unlikely that it will be valued at the cash total in the bank. In fact it's likely to be an awful lot less and I base that view on PI sentiment and BOD past performance.
Loading up right now is a gamble. It all depends on your appetite for risk.
I meant to type “No going back on the decision to pay a special dividend of 1.80 pence per share”
AGE
A General Meeting was held to approve the sale of Irosta and to approve the payment of the special dividend so there is going back on the 1.80 pence special dividend which is going to be paid by the latest of the 12 June 2023.
Which ever market maker is filling all those trades at between 1.67p and 1.7245p needs to go and do some more research!
AGE