Hyprop butts heads with JSE over dividends


Hyprop butts heads with JSE over dividends


Published Date: 2021-01-06 | Source: Stephen Gunnion | Author: Stephen Gunnion

Hyprop butts heads with JSE over dividends

The REIT will now pay a cash dividend, giving shareholders the option to reinvest in Hyprop shares.

Hyprop Investments has been forced to change its payout strategy for last year's dividend after the JSE said it didn't comply with regulations governing real estate investments trusts (REITs).

The shopping centre owner originally planned to settle its distributions for its 2020 financial year, which ended in June, on credit rather than in cash due to the impact of Covid-19 on the property sector. Shareholders voted in favour of the resolution, which would have allowed them to subscribe for new shares under a dividend reinvestment plan. However, last month the JSE declined to approve the move. REITs are obliged to payout at least 75% of distributable earnings to shareholders to retain their status, which comes with tax benefits.

As a result, days before Christmas, Hyprop said it would go ahead with the payment of its interim and final dividends for the year, adding a further distribution of 66.26c for the year to end-June on top of its interim distribution of 308.74c. It said it would pay shareholders in new shares or cash - but with the reinvestment option as the default. Shareholders would have to make an election for the cash alternative.

In a further blow to Hyprop's plans, the JSE said this also didn't comply with the minimum distribution requirements, forcing it to withdraw December's circular and issue a new one. The REIT said it would turn it around so that a cash dividend was the default and investors wanting to reinvest in Hyrop shares would have to elect to do so. However, it said its sponsor and attorneys were in agreement that its original strategies were sound.

Hyprop said the reinvestment price for the total dividend of 375c per share would be announced on the finalisation date, which would be no later than 12 January.

Its shares fell 4.4% to R26.50 yesterday.


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