Electra to hand back another £350m and drop private equity from name – Electra has completed what it termed as “Phase II” of its strategic review. The conclusions are:
- Continue to focus on optimising return on shareholder capital.
- No new investment in current market conditions. However, should conditions change the Board will consider further investment.
- A further special dividend of GBP350 million, or 914p per share. This is to be paid on 1 December 2017 to shareholders on the register of members at the close of business on 3 November 2017.
- Subject to shareholder and regulatory approval, an update of the company’s investment policy to reflect a focus on shareholder returns.
- Exploring options for reclassification of the company’s current listing.
- Taxation benefits related to the realisation of assets currently provided through the Investment Trust Company tax status that are being lost are expected to be obtained through the Substantial Shareholding Exemption (SSE) should its listing classification change.
- Actions will be taken to further simplify the Group’s corporate and underlying partnership structures realising cost and efficiency benefits.
- The Company intends to change its name to remove the words “Private Equity” to better reflect its revised strategic focus.
The Board intends to convene a general meeting in due course to allow shareholders to vote on these proposals. Shareholders who bought into Electra as a private equity trust will have to decide whether they want to remain invested in the company. They might want to consider asking for a 100% cash exit option.
To qualify for the Substantial Shareholding Exemption, Electra would have to be classified as a trading company (it would need to convince HMRC of this) and any companies it sold would also have to be classified as trading companies. It would have to have held the company for at least 12 months and it must be selling at least 10% of the company’s issued share capital/10% of the economic rights.
ELTA : Electra to hand back another £350m and drop private equity from name
