Unmarketable Parcel Sale Facility
Why did Infigen Energy conduct an Unmarketable Parcel Sale Facility?
The Unmarketable Parcel Sale Facility ("Sale Facility") enabled Infigen securityholders with small parcels of securities to sell these without incurring brokerage or handling costs.
The brokerage and other costs associated with selling a small parcel of securities are often a disincentive for small securityholders to sell their securities. To assist small securityholders who wish to sell their IFN securities, Infigen established the Sale Facility and has paid the brokerage and other costs associated with selling these securities.
By reducing the number of unmarketable parcels on Infigen's securityholder register, it has also helped Infigen to reduce administrative costs associated with servicing large numbers of securityholders with unmarketable parcels.
What is an unmarketable parcel of securities?
An unmarketable parcel of securities is a parcel of Infigen Energy (ASX: IFN) securities valued at less than A$500 at the close of trading on the ASX on the record date of 11 March 2009.
Was participation in the Sale Facility optional?
Yes. All securityholders that held an unmarketable parcel of IFN securities as at 11 March 2009 were sent written notification on 18 March 2009 which explained the Sale Facility and gave securityholders the option to retain their IFN securities provided they completed and returned their Security Retention Form before 5pm (Sydney time) on Monday, 4 May 2009.
Click here to view notification sent to relevant securityholders on 18 March 2009.
How were my IFN securities sold?
Infigen appointed UBS to act as execution-only broker to sell IFN securities on the ASX under the Sale Facility. Following determining the IFN securities to be sold under the Sale Facility, these securities were transferred to UBS on 12 May 2009 to sell as soon as reasonably practicable up until 13 July 2009.
What is the date my IFN securities were sold?
The securities to be sold under the Sale Facility were pooled and UBS sold the securities progressively over the period from 14 May 2009 to 13 July 2009. As a result, it is not possible to determine the date when any particular Securityholder’s securities were sold under the Sale Facility.
For tax purposes, the deemed disposal date of all IFN securities under the Sale Facility is 12 May 2009 as this was the date that the power to sell the securities was transferred from the relevant small securityholders to UBS.
Will I have to pay brokerage or handling costs?
No, you will not have to pay brokerage or handling costs if your IFN securities were sold under the Sale Facility. Infigen has paid these costs on your behalf.
How much will I receive for my securities under the Sale Facility?
All securityholders who sold their IFN securities under the Sale Facility will receive the same proceeds per IFN stapled security, being $1.1952497 per security.
The proceeds you will receive in respect of the sale of your IFN securities reflect the volume weighted average price of all IFN securities sold by UBS under the Sale Facility. The prices achieved were dependent on a number of factors, including the prevailing market conditions and the demand for IFN securities at the time of sale.
When will I receive the proceeds?
Cheques were mailed to securityholders participating in the Sale Facility on Tuesday, 11 August 2009. All proceeds will be paid in Australian dollars.
In accordance with the requirements of the Sale Facility set out in the Constitution of the company, Infigen is required to pay the proceeds by way of a cheque. Infigen is not able to pay via direct credit, even if relevant securityholders have advised the registry of their banking details.
What is the interaction between the Sale Facility and the FY09 final distribution?
IFN securities to be sold under the Sale Facility were transferred to UBS on 12 May 2009 to sell as soon as reasonably practicable up until 13 July 2009. IFN securities which were unsold as at 24 June 2009 (ex-distribution date for the FY09 final distribution) became entitled to the FY09 final distribution which was subsequently declared on 27 August 2009 and will be paid on or around 17 September 2009.
Due to the pooling of securities under the Sale Facility mechanism, it is not possible to determine specific securityholder entitlements to any FY09 final distribution. Infigen included an amount representing the estimated FY09 final distribution (which was subsequently declared on 27 August 2009), which is payable on the securities that were unsold as at the ex-distribution date in the pool of sale proceeds which has been divided among securityholders participating in the Sale Facility. As a result, no further amounts are payable to securityholders participating in the Sale Facility regardless of the FY09 final distribution that was declared on 27 August and will be paid in September 2009.
How should the proceeds be treated for tax purposes?
The proceeds from the Sale Facility of $1.1952497 per IFN security should be treated similarly to the proceeds received from a normal on-market sale of IFN securities. Further details concerning Australian tax considerations associated with a disposal of IFN securities are contained in the annual Tax Statement Guide.
Click here for the latest Tax Statement Guide.
Securityholders should seek their own tax advice, as each Securityholder’s circumstances may differ.