Significant Dividend15 May 2021 00:36
'The Directors are committed to maximising the value for all the shareholders, and we are delighted to have received a proposal from a credible party that could allow us to pay a significant dividend to all shareholders'
The main disadvantage of an asset sale compared to a share sale is tax implementations. In a company sale no corporation tax is payable. In an asset sale the seller will effectively have to pay double tax on an asset sale: Corporation Tax on the profit made from the sale of the assets and Capital Gains Tax on cash withdrawn as a dividend. (profit made on the sale could be huge and therefore the tax payable before a cash dividend is paid)
There may not be a 'special' dividend paid in the way people are thinking.
There could be a tax free spin off of the required assets
A tax-free spinoff is when a corporation carves out and separates part of its business as a new standalone entity, but the separation does not subject the parent firm to paying taxes.
The method of conducting a tax-free spinoff is for the parent company to distribute shares in the new spinoff to existing shareholders in direct proportion to their equity interest in the parent.
This would result in a separate company with the assets the buyer wants, share holders get a stock dividend as above which may in turn become 'significant' when the spin off company is bought by the buyer and the new spin off company shares rocket to reflect.
Eurasia is then left as a 'Cash Shell' to be delisted or continue trading with the un wanted assets.
Would explain in some way the EGM to allot shares and Eurasia Japan being the new spin off company.
Just a thought, doing more research
GLA
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