Plato Income Maximiser announces $200m entitlement offer to meet demand for income

Don Hamson

Don Hamson

With official cash rates and bond yields plumbing to record lows, investors are increasingly looking for dividend payments as a replacement for their cash and fixed interest income.

To help meet this increased demand, Plato Income Maximiser Limited (PL8 or the Company) today announced a $200 million entitlement offer. PL8 is the only Listed Investment Company (LIC) to pay regular monthly fully franked dividends.

The offer consists of 1 new share for every 1.6 ordinary shares held by existing eligible shareholders on the record date of 13 August 2019. There will also be an over-subscription facility for existing shareholders to apply for shares in excess of their entitlement.

Shares not taken up by existing shareholders will be offered to new retail and institutional investors at $1.10 each in the Broker Firm Shortfall Offer.  The Closing Date for both the Entitlement Offer and the Broker Firm Shortfall Offer is 30 August 2019.

New shares issued will trade in the week commencing 9 September and will be entitled to the already announced dividend of $0.005 payable on 30 September.

“Benefits from the offer include a larger market capitalisation which is expected to attract greater research coverage and provide more liquidity, a more diverse shareholder base and a lower management expense ratio” said Don Hamson, Director of Plato Income Maximiser and Founder and Managing Director of Plato Investment Management the Manager of PL8.

The Company aims to continue paying regular monthly dividends. PL8 paid 12 monthly 0.5c fully franked dividends for the year to June 2019 equating to a dividend yield of 5.5% or 7.8% including franking credits on the offer price of $1.10. Including its special dividend of 3c a share, the dividend yield was 8.2% and 11.7% with franking credits.

Dr Hamson added that it is timely for retirees, in particular, to reconsider their income generating asset mix: “It is becoming increasingly difficult for retirees to live off the income from cash and fixed income given current RBA cash rates at a record low 1% and 10 year Commonwealth Government Bonds trading at a yield below 1%.

“Retirees are struggling to make ends meet and should reconsider their income sources to look at active dividend investing.

“Given the recent election result, retirees can continue to bank on receiving franking credits from Australian share investments and should consider taking advantage of the higher income on offer from them” he said today.

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