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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » How much Dividends CDIC is going to declare?

How much Dividends CDIC is going to declare?

Go down  Message [Page 1 of 1]

Jeremy

Jeremy
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Some people say CDIC is going to declare a dividend of Rs 200/= per share, Others say its only Rs 100/= per share, but only few knows that they are going to declare a thumping dividend. Market seems to have sensed the news today as the share shot up to Rs 498/=

CDIC made a huge capital gain from the sale of AVIVA NDB Insurance Company (CTCE) to AIA few weeks ago. It is paramount that CDIC declares dividend to it 99% owner NDB so that NDB in turn declare dividends to its shareholders!

On the day the deal was announced in September, NDB in a statement said that the net receipt from this transaction for the NDB group would amount to US$ 59 million and a senior bank official told Mirror Business that the capital gain for the group would be around Rs.6.5 billion.

Whats your take on this?

http://www.dailymirror.lk/business/other/24055-aia-completes-acquisition-of-aviva-ndb-insurance.html

Asian insurance giant, AIA Group Limited, which is listed on the Hong Kong Stock Exchange, yesterday said it has closed the acquisition of Aviva NDB Insurance PLC (CTCE) as the company acquired 92.3% of the firm in a US$ 109 million deal that was announced in September, this year.

According to a statement issued by CTCE, following the transaction, the company will be renamed and rebranded as AIA in early 2013.

“We are delighted that this transaction has closed and we are now part of AIA, one of the strongest and largest insurance companies in the world. Our company is already number two in the market in Sri Lanka and we look forward to building on this position and serving an increasing customer base as part of AIA,” CTCE Managing Director Shah Rouf said.

AIA acquired the entire stake in unlisted Aviva NDB Holdings Lanka (Private) Limited, from Aviva Asia Holdings Private Limited and NDB Capital Holdings PLC (CDIC).

Aviva NDB Holdings Lanka (Private) Limited held a direct shareholding of 87.27% in Aviva NDB Insurance PLC.

In Se ptember, American International Assurance Company (AIA) said that it was paying US$ 109 million for the 92.3% stake in CTCE held by Aviva, UK (51%) and National Development Bank and its subsidiary, NDB Capital Holdings PLC (CDIC) (41.3%), through Aviva NDB Holdings.

AIA has also acquired the 5% direct shareholding in Aviva NDB directly held by CDIC.

According to brokers, CDIC was seen selling 1.5 million shares of CTCE to AIA yesterday, each share at Rs.349 in a deal amounting to Rs.523.5 million.

Through this transaction, AIA’s total shareholding in ANI amounted to 92.3%. AIA was ranked fifth in the world by market capitalisation with a market value of US$ 47 billion as of November 24, 2012.

Meanwhile, according to a research report by CT Smith Stockbrokers, NDB stands to get an estimated 43% premium for its minority stake of 41.3% over Aviva’s 51%, subsequent to the deal.

According to sources, the disparity between the prices and the stakes pertaining to the transaction was likely to be a result of the exclusive bancassurance deal NDB entered with AIA for 20 years and the proposed purchase of balance shareholding of NDB Aviva Wealth Management PLC by NDB group.

On the day the deal was announced in September, NDB in a statement said that the net receipt from this transaction for the NDB group would amount to US$ 59 million and a senior bank official told Mirror Business that the capital gain for the group would be around Rs.6.5 billion.

Fresher


Moderator
Moderator
GMNet wrote:

On the day the deal was announced in September, NDB in a statement said that the net receipt from this transaction for the NDB group would amount to US$ 59 million and a senior bank official told Mirror Business that the capital gain for the group would be around Rs.6.5 billion.

Does that mean that it has a 500% capital gain?

Kumar

Kumar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
NDB could go for bonus share issue?

Jeremy

Jeremy
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Some people say it is a share buy back by CDIC instead of dividend. This will make the recipient free of 10% Dividend tax.

If CDIC buy back 20mn shares (Which is 50% of the issued Capital if CDIC) for a total consideration of 6 billion (Profit CDIC made from the sale of NDB AVIV) then Buy Back Price should be Rs 300/=



Last edited by GMNet on Thu Jan 03, 2013 3:02 pm; edited 1 time in total

Arena


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
My goodness.

CDIC is not entitle for entire 6 b.........That is 100% sure.

I have no clue on this and cant understand these deals.

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
GMNet wrote:Some people say it is a share buy back by CDIC instead of dividend. This will make the recipient free of 10% Dividend tax.

If CDIC buy back 20mn shares (Which is 50% of the issued Capital if CDIC) for a total consideration of 6 billion (Profit CDIC made from the sale of NDB AVIV) then Buy Back Price should be Rs 300/=

Ayyo babaata calculate karanda ba ne, 6,000 divided by 20 is only 300 not 3000......

Jeremy

Jeremy
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Jiggysaurus wrote:
GMNet wrote:Some people say it is a share buy back by CDIC instead of dividend. This will make the recipient free of 10% Dividend tax.

If CDIC buy back 20mn shares (Which is 50% of the issued Capital if CDIC) for a total consideration of 6 billion (Profit CDIC made from the sale of NDB AVIV) then Buy Back Price should be Rs 300/=

Ayyo babaata calculate karanda ba ne, 6,000 divided by 20 is only 300 not 3000......

TYPO CORRECTED

skipper


Stock Analytic
Stock Analytic
GMNet wrote:Some people say it is a share buy back by CDIC instead of dividend. This will make the recipient free of 10% Dividend tax.

From what I'v heard company buy back shares only if there's nothing else to do with the cash they have in hand right??? what's the point in giving out the money out of the business when they can easily utilise that money to generate more value within the group. CDIC is anyway a subsidiary of NDB.

I think CDIC will declare a big dividend, so NDB can have that cash and inturn NDB will declare a good dividend (not BIG div) and retain part of it inside the group to expand the lending portfolio. Smile Smile

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

BTW, did anyone consider the future revenue/profit loss this will incur to CDIC and NDB?


@skipper wrote:
GMNet wrote:Some people say it is a share buy back by CDIC instead of dividend. This will make the recipient free of 10% Dividend tax.

From what I'v heard company buy back shares only if there's nothing else to do with the cash they have in hand right??? what's the point in giving out the money out of the business when they can easily utilise that money to generate more value within the group. CDIC is anyway a subsidiary of NDB.

I think CDIC will declare a big dividend, so NDB can have that cash and inturn NDB will declare a good dividend (not BIG div) and retain part of it inside the group to expand the lending portfolio. Smile Smile

Fresher


Moderator
Moderator
exactly slstock. all are going on about not thinking of the going concern. I really don't think we can expect the whole thing to be distributed.

btw GMNet... who are these 'some people' ?

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
npp wrote:exactly slstock. all are going on about not thinking of the going concern. I really don't think we can expect the whole thing to be distributed.

btw GMNet... who are these 'some people' ?

Seems to be GMNet or her bosses have some sort of interest on this particular counter.

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