RE: Buy-back27 Jan 2019 13:03
Tricky,
"I seem to remember in July 2017 RhythmOne's 'Reduction of Capital' raised around £140m, as a distributable reserve."
Do you also remember in my post last month I mentioned that I think the buy back had been planned for over a year and only just before the Yume deal was announced, they announced the 'capital reduction'? The Yume negotiations were going on at same time as the 'Capital Reduction'.
Coincidence??
My post 14th Dec 2018:
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I think the buy back had been planned for over a year and just before the Yume deal was announced. I think it was probably part of the Yume deal to have it in place...
The cancellation of the Share Premium account was announced in June 2017, just as they were negotiating the deal with Yume...
So they created $186m distributable reserves..
July 2017:
"The amount standing to the credit of the Company's share premium account has been cancelled and the Reduction of Capital has created distributable reserves of approximately GBP142,825,734 (equivalent to approximately $186,359,256 at the prevailing spot foreign exchange rate as at approximately 4.00 p.m. (BST) on 26 July 2017).
The Reduction of Capital is a legal and accounting adjustment and is not expected to have any direct impact on the market value of the ordinary shares of the Company, or the number of ordinary shares in issue.
The creation of this distributable reserve as result of the Reduction of Capital will afford the Company more flexibility to make distributions to its shareholders, if thought fit by the Directors."
https://investor.rhythmone.com/newsroom/2017/07/27/confirmation-of-reduction-of-capital
fy 2018:
"On 26 July 2017 RhythmOne completed a UK High Court approved capital reduction. A copy of the order confirming the capital reduction has been registered by the Registrar of Companies and as such the capital reduction has become effective. All share premium and merger reserve attaching to the Company's ordinary shares has consequently been cancelled. The purpose of capital reduction was to create distributable reserves to provide the Company some flexibility should it wish to undertake the payment of dividends or undertake a share buy-back program in the future."
https://investor.rhythmone.com/assets/pdf/RhythmOne_FY2018_Results_140618.pdf
Reduction of share premium account
Share premium account
Reduced (or cancelled) by means of a reduction of capital. In accordance with article 3 of the Companies (Reduction of Share Capital) Order (SI 2008/1915), the reserve created on such reduction can be treated as a realised profit and, therefore, it may be distributed to shareholders or used to buy back shares.
Share premium account | Practical Law
https://uk.practicallaw.thomsonreuters.com/1-107-7253
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