Sears Canada to hold shareholders meeting on Dec 2
26 Oct '05
2 min read
Leading multi-channel retailer Sears Canada announced that a special meeting of shareholders would be held on Friday, December 2, 2005 in Toronto, Ontario. At the meeting, shareholders will be asked to consider and, if thought advisable, pass a special resolution authorizing the directors to effect a reduction of the Company's stated capital for the purpose of distributing to shareholders up to $470 million in connection with the previously announced sale of its credit and financial services business to JPMorgan Chase & Co.
On September 14, 2005, the Company announced its proposal to distribute approximately $2.0 billion to shareholders as an extraordinary cash dividend, subject to the completion of the sale and the arrangement of a satisfactory operating credit facility. The Company has applied to Canada Revenue Agency for an opinion to determine whether a portion of the sale proceeds, proposed to be distributed by way of a reduction of the Company's stated capital, would be treated as a tax-free return of capital and not as a dividend under the Income Tax Act (Canada).
Of the net after-tax proceeds to be realized from the sale, the Company proposes to distribute up to $470 million, by way of a reduction of stated capital and approximately $1.530 billion, by way of an extraordinary cash dividend. The proposed reduction of stated capital will be subject to certain conditions to be set out in the Management Proxy Circular to be mailed to shareholders shortly.
If the Company does not obtain a favourable opinion from Canada Revenue Agency, it intends to make the proposed distribution of approximately $2.0 billion by way of an extraordinary cash dividend.