Morton calls meeting

Press, 23 March 1988, Page 37

Morton calls meeting

Morton Equities, the Taurt nga wine maker, has called; an extraordinary meeting to overturn resolutions passed at its aihual [meeting! and allow the [reduction i in capitt.l. I ) ; A Resolution for the [May 6[ meeting is aimed atjdivibing each 25c share into 25 1c shares. Share-

holders will then be able to redeem 24 out of [25 shares for cash. In a letter to shareholders, the directors said they had decided [ to change the capital [restructuring programme approved at the annual meeting in December because the Government released taxation proposals which would have meant additional tax [for shareholders. , • ' The directors said that at that annual meeting shareholders had pasried two resolutions! The first was to reduce the capital by 24c a share and the second was the reduction would be made; through a [distribution of [ fully paid [shares to Pimento Holdings. : I At the same time, shareholders were ,told that Hamelyh Grjoup would make [ a[ take-over offer for Pimento, offering shareholders either cash or further shares in Morton. ! The schemel was [ designed to allow Motion’s shareholders to either take 24c cash a shares, or to double the number of Morton shares held. I i t ' I I 1 Four [ days before [ the annual meeting the (Government released consultative documents on proposed changes to [ tax legislation, one relating to the tax on . distributions made by cbmpanies, the directors said. ! 1 Morton had held discussions with 'the Gbvemment arid it now appeared

that if the original capital reduction scheme was; made then the distribution could be taxable for shareholders. However, if the distribution was made by divid- ■ ing each 25c share into 25 1c shares and of these 24 shares were redeemed cash i then shareholders would be in the samp position. But they could ' not receive; further shares in Morton in lieu olf [ cash. I ’i I ! The Government, had told Morton that it was riot present policy to tax , such [ a distribution, .the directors said. ; [ The managing director of Morton, Mr Morton , Browp, said yesterday! that because of the pro,posep changes the deal with Pimento, which was part !of Hamelyn, had fallen 1 through. i [Hamelyn had decided) that it wanted to conceritrate [on different things i “so I suppose you coulfol say [that [ we’ve had a I slight! parting of thb: ways,;” he said. [ The directors told j shareholders that they, were; not able; to! give a; categorical assurance that; the proposed tax legisla-: tion would mean that the [ new scheme was [not also considered a capital pay-! rhent; and therefore tax-j able.’) i ( | • < However, they had been , advised that drafi legisla-[ tion would be available! next [month arid foe form! of the legislation would be : known before the meetirigi would be held. I ■ j