Carter Holt confirms meeting to approve capital return

12.15pm

Wood processor Carter Holt Harvey today sent shareholders notice of a July 22 special meeting seeking approval for its $480 million capital return plan.

The money, approximately half of the proceeds from the sale of the company's tissue business earlier this year, will be paid out on a pro rata basis by way of cancellation of one quarter of the shares held by each shareholder.

This would result in a payment to each shareholder of 27.5 cents per share the company said in a statement to the NZX.

The company said the repayment would not affect the ongoing payment of dividends from trading profits, and its dividend policy would remain the same.

Immediately following the repayment, the company said it expected there would be an upward adjustment to the share price reflecting the effect of both the share cancellation and the cash payment.

Carter Holt shares were a cent lower at $2.07 in late morning trade today.

Carter Holt said shareholders should overall be in the same financial position before and after the capital repayment. "The only difference being that following the repayment each shareholder's value will be represented by the value of that shareholder's remaining shares plus the cash returned."

The plan requires 75 per cent shareholder approval and if accepted, payment would be sanctioned by the High Court, with the money expected to be paid to shareholders in August.

Carter Holt sold its tissue unit to Svenska Cellulosa AB, Europe's biggest tissue maker, for US$662 million ($1.08 billion).

- NZPA