Ceramco to pay out its surplus

By DITA DE BONI

Ceramco Corporation intends to return $16.1 million in surplus capital to shareholders through a one-for-four share cancellation.

The funds come from the proceeds of the $41 million sale of Ceramco's China Clays unit to Paris mineral concern Imerys two weeks ago.

The plan is subject to the approval of shareholders and the consent of the High Court, but will result in shareholders receiving $1.59 for each cancelled share.

The price struck was based on the company's closing share price on Monday. Ceramco stocks have slowly declined in value since hitting a high in December of 179c. They dropped to 125c in late March.

Since the company announced it would divest Clays, its stocks have been steadily rising again. Ceramco closed up 1c yesterday at 160c.

The company said it expected the share cancellation to take place in late July. It was also conditional on the completion of the sale of China Clays.

The sale is still subject to Overseas Investment Commission and shareholder approval.

Chairman Ian Parton said Ceramco directors considered the $16.1 million to be "in excess of the company's current and anticipated needs" and was the first step in the rationalisation of the Ceramco Group, subsequent to the sale of China Clays.