Village Roadshow to simplify capital structure
Australian media company Village Roadshow Ltd (ASX: VRL) has proposed to simplify its capital structure by joining ordinary and preference shares into one listed security.
VRL plans to give preference shareholders the same rights for each share as for one ordinary share, conditional on the company buying back at least 15 million shares, as well as shareholder approval, according to the company's statement to the Australian Securities Exchange.
The company said the strategy is in line with its goal of maximising shareholder value by creating a more efficient capital structure.
"The directors of VRL believe that the proposal is in the best interests of VRL shareholders given the issues associated with the current capital structure of ordinary shares and preference shares," VRL said.
"These issues include reduced liquidity and an inflexible approach to dividend policy. In addition, the preference shares are outdated and no new preference shares can be issued given ASX requirements."
The company said the proposal reflects feedback from shareholders. A meeting is scheduled in September to seek the required approvals.
Village Roadshow Corporation Ltd (VRC), VRL's major ordinary shareholder, along with executive directors John Kirby, Robert Kirby and Graham Burke, controls 68.2 per cent to the ordinary shares on issue.
Minter Ellison will be VLR's legal adviser, while UBS and ANZ Mergers & Acquisitions were appointed as financial advisers.