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2018 capital management initiative
On 15 August 2018, IAG announced a capital management initiative that was settled on 26 November 2018.
- IAG capital management initiative at a glance
- Working example
- Income tax class ruling
The capital management initiative was:
- a payment of 25 cents per ordinary share, comprising a capital return of 19.5 cents per ordinary share and a fully-franked special dividend of 5.5 cents per ordinary share; and
- an equal and proportionate consolidation of ordinary shares.
Collectively, these initiatives were referred to as the capital management initiative, approved by shareholders at the 2018 Annual General Meeting held on 26 October 2018 (AGM).
The total payment to shareholders was approximately $592 million.
The capital return and special dividend were accompanied by an equal and proportionate consolidation of ordinary shares. To achieve the consolidation, every ordinary share was converted into 0.9760 ordinary shares.
The capital management initiative reduced the total number of ordinary shares on issue from around 2,368 million to around 2,311 million (a reduction of around 57 million ordinary shares), however each shareholder still owns the same proportionate interest in IAG after the consolidation as they did before the consolidation (subject to the rounding up of fractional entitlements to the next whole number of ordinary shares).
IAG announced the proposed capital management initiative to distribute surplus capital to shareholders in its FY18 results announcement (209.53 KB)
Our quick guide (922.3 KB) to the capital management initiative provided more details.
The following table confirms the impact of IAG’s 2018 capital management initiative for individual shareholders:
The key dates for the IAG 2018 capital management initiative were:
26 October 2018
- AGM and shareholder approval (see all 2018 AGM information)
30 October 2018
- Last date for trading pre-consolidated ordinary shares with the special dividend and capital return
31 October 2018
- Ex date for the special dividend and capital return
1 November 2018
- Record Date for the capital management initiative
5 November 2018
- Share Consolidation Date – post-consolidation ordinary shares entered into register
26 November 2018
- Payment date for special dividend and capital return
- DRP shares issued and holding statements dispatched
The company has received an ATO income tax class ruling (146.59 KB) to confirm the tax consequences for shareholders who are tax residents in Australia and hold their shares on capital account for tax purposes.