What is the new structure?Previously, SKYCITY has distributed profits to shareholders in the form of fully imputed dividends in cash or, if shareholders have so elected, in shares in lieu of cash. Under the new structure, shareholders will now receive distributions in the form of shares (as a non-taxable bonus issue), but will have the option to have those shares bought back by SKYCITY for cash. The New Zealand Inland Revenue Department (IRD) has confirmed that the bonus share issue will be a non-taxable distribution, but that any cash received through electing the buy back option will be deemed a dividend for tax purposes. SKYCITY will continue to attach full imputation credits to cash payments made to those shareholders who elect to have their bonus shares bought back by the company. The change is effective with respect to the half year period ended 31 December 2005, and thereafter until further notice. The profit distribution plan can be viewed in the 'Additional Information' box on this page.
Why has SKYCITY decided to make this change?SKYCITY has been considering the most efficient capital structure for its existing and future business operations and the most effective manner in which the earnings of the business can be distributed to shareholders. The change allows more efficient management of the company's capital and its imputation credit position, while also allowing shareholders the ability to determine in which way they share in the earnings of the business. SKYCITY sees the move to bonus share issues as a structural change and notes that while the company's distribution policy is determined by directors, there is no current intention to change the twice-per-annum (April and October) distributions, based on 90% of company earnings, as has applied in the past.
How is the profit distribution converted into bonus shares?On the 20th of August 2007, in conjunction with SKYCITY's FY07 final result announcement, the distribution amount per share was announced. As with previous years shareholders will share in the company's performance with 90% of the profit distributed - or 12 cents per share. The strike price for the bonus issue for the FY07 distribution will be the weighted average of SKYCITY Entertainment Group (SKC) shares during the 11-17 September 2007 period. Details of the calculations are set out below: STRIKE PRICE (EXAMPLE CALCULATION ONLY)Weighted average sale price of SKYCITY shares on NZSX (10-16/8/07) adjusted for distribution | $4.3092496 | Discount | nil | Strike price | $4.3092496 |
BONUS ISSUE RATIOFinal 2007 profit distribution per share | $0.12 | Strike price | $4.3092496 | Bonus issue ratio | 0.0278471 |
This means, shareholders would receive 0.0278471 bonus shares for every one share held, or one bonus share for every 35.9104133 shares held.
KEY DATES20 Aug 2007 | SKYCITY Entertainment Group FY07 final result announcement (for the year ended 30 June 2007) and distribution amount of 12 cents per share announced. | 10 Sep 2007 | Record date | 20 Sep 2007 | Letter sent to shareholders advising number of shares to be issued, the strike price for the shares, the buy back price and the process. | 3 Oct 2007 | Final date for shareholders to notify SKYCITY if they wish to have their shares bought back by the company. | 5 Oct 2007 | Bonus shares issued and buy back of shares. |
Where do I get more information?Refer to the additional information documents on this page. In addition, SKYCITY's Corporate Office will be pleased to answer shareholder queries on this matter. Please email any questions to sceginfo@skycity.co.nz or fax to +64 9 363 6140.
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