Corporate Actions

Course Overview:

This course has been designed to give participants an in-depth understanding of all aspects of corporate actions, including:

• underlying rationale and purpose of corporate actions
• detailed administrative, accounting and disclosure requirements and
• implications for investors, analysts and others concerned with corporate governance and directors’ accountability

The accounting parts of the course are based on IFRS, and the regulatory and disclosure parts of the course are based on UK stock exchange and Companies Act requirements.

Course Content:

Definition of corporate actions

• Financial transactions or other non-financial dealings
• between a company and the existing or potential investors in its securities or
• by one company in the securities of another company in which the first company is interested

Reasons for corporate actions

• Distributions of profits
• Adjustment of capital structure, e.g. rebalancing of equity and debt
• Manipulation of eps, eps growth, or other key indicators of financial strength or performance
• Acquisition of new businesses or divestment of existing businesses
• Signalling to investors

Classification of corporate actions

• Mandatory –v- discretionary
• Cash –v- non-cash
• Investor wealth-affecting –v- wealth-neutral
• Regular –v- exceptional
• Tax-driven –v- tax-neutral

Distributions

• Regular dividends: cash or scrip – interim and final – dividend policy – managing investor expectations
• Special distributions: rationale – timing-  method – tax implications

Adjustment of capital structure

• Optimum capital structure: implications for company value – theory and practice
• Share repurchase: pros and cons of different methods – tax implications
• Share splits and reverse splits:  reasons (good and not-so-good)
• Convertible bond issues: rationale for issuance – procedure on conversion

Acquisition and divestment

• Cash or shares? – pros and cons for shareholders and other stakeholders
• Dealing with non-controlling interests (formerly known as minority interests)

Signalling effects of corporate actions

• Directors’ confidence in (or caution about) the future
• The importance of maintaining consistent policies and of avoiding unscheduled reductions in dividend

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

Delivering this course in-house for you to a number of participants could be very cost effective. Please call us on 020 7387 4484 to discuss this further.

If you have any questions about this seminar please write to us at post@redcliffetraining.co.uk.