Among the BHP de-merger loose ends is how Australian shareholders are to access accumulated franking credits
John Robertson
PortfolioDirect
Among the BHP de-merger loose ends is how Australian shareholders are to access accumulated franking credits. These could be worth as much as the newly demerged company itself. The balance of assets suggests that the ongoing profits from 'Limited' will exceed those from the dual listed 'PLC'. Paying the same dividend to both PLC and Limited shareholders implies the dividend capacity of PLC will set the limit to what can be paid. That leaves an ongoing build up in unutilised franking credits at the Australian end and a multi billon dollar suboptimal outcome for Australian investors. With the most profitable Australian assets staying with BHP, streaming the franking credits to the new company will be too hard. The dual listing structure seems to have outlived its usefulness and may now be an impediment to shareholders gaining access to an important source of value.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
Expertise
No areas of expertise
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