QUOTE(espree @ Nov 10 2008, 11:31 PM)
Hi all sifus.. Can anyone recommend me a website or two that I can read about Capital Repayment and the dynamic behind it?
Thank you thank you.
just give u a layman's term of what capital repayment is...
Normally this companies are cash rich, because most of their assets have already been paid in full and they have very little or no liabilities.
So what do you do when u have too much money?
1. A company can declare a dividend
2. or a Capital Repayment
Why companies choose capital repayment over dividend because most likely the sum itself is significantly larger and the company will have to dig into the shareholders fund to return this excess capital money. Which requires S/H approva and also the courts approval for such action to be carried out.
Since the company is neither expanding or in need of capital, money sitting in the bank wont do the company any good (i.e. whether for tax purposes, s/h will make noice becoz the co is hoardin all the cash etc...).
What companies that r likely to undertake Cap Repayment?
Bjtoto for instance, Genting, Jinter, BAT, Magnum etc...
Notice that all this companies generate a significant amt of cash.