Proposal approved for re-distribution of shares

The National Business

A PROPOSAL by Teachers Savings and Loan Society Ltd (Tisa), on behalf of the shareholders of Credit Corporation, for the re-distribution of BSP shares by Credit Corp to its shareholders was unanimously approved at the company’s annual general meeting last week.
According to a statement from Tisa, the share price of Credit Corporation has been on a declining trend since 2014 from K2.60 to K1.35 by end of 2018.
Shareholders have and continue to experience adverse impact on their financial results and their return to their shareholders.
In particular, the fall in Credit Corp’s share price consecutively over the last five years has resulted in aggregate losses and significant capital erosion for its shareholders.
In contrast, BSP has seen strong growth and positive share price movements over that same period, translating into strong dividend payments and positive revaluation gains for its shareholders.
Credit Corporation has 33,692,696 shares (7.21 per cent shareholding interest) in BSP and has benefitted through the receipt of good dividends and positive revaluation gains.
Credit Corporation shareholders however are not directly benefiting from the strong performance of BSP, nor are they receiving the maximum return from their Credit Corporation investment or realising the full capital gains of the BSP shares.
Despite combining dividend income received from BSP and the net results of its core business, Credit Corporation continues to declare dividends that are only a fraction of the dividend per share declared by BSP.
The Credit Corporation shareholders resolved as follows;

  • The Board of CCPL immediately appoint an independent expert to determine by or before Aug 31 (2019) whether, following the proposed in-specie distribution of the BSP shares to shareholders, Credit Corporation (PNG) Ltd will satisfy a solvency test;
  • shareholders immediately establish a technical committee to assist the board to appoint an independent expert in accordance with terms of reference set by and overseen by the technical committee; and,
  • That the board convene a special general meeting before Dec 31 (2019) for the purpose of tabling the independent expert’s report and announcing the findings of the independent expert to shareholders for further deliberation.