Dipula Income Fund has received overwhelming support from its shareholders to collapse its dual share capital structure into a single class of ordinary shares.
“There has been a disconnect between Dipula’s underlying historic performance and its share price performance. This transaction offers Dipula shareholders a path to eliminate misalignment of interests between A and B shareholders. This may lead to a rerating of our share and has the potential to place Dipula back on a growth path based on a reasonable cost of equity”, commented Izak Peterson, CEO of Dipula.
The REIT’s current capital structure comprises of listed DIA shares and DIB shares. DIA shares have preferential entitlements to dividends (if declared), which grow annually by the lower of CPI and 5%. DIB shares are the ‘ordinary’ equity of Dipula, receiving any residual dividend after settlement of the DIA shares’ preferential dividend entitlement.
In terms of the scheme of arrangement, Dipula will buy back and cancel all its issued DIA shares at a swop ratio of 2.4 DIB shares for every DIA share in issue.
Petersen expects that a single class of ordinary shares is likely to result in improved tradability and liquidity as well as possible index inclusion over time.
Dipula indicated that it was now well positioned to take advantage of many opportunities which it couldn’t previously consider due to the wrong pricing of its share.
The listing of DIA shares on the JSE are anticipated to be terminated on or about Tuesday, the 24th of May 2022.
