Convertible note tax change
ANY gains from the conversion of recently issued convertible notes into shares may not be taxable, thanks to recent tax law changes.
Tax Commissioner Michael Carmody said for many investors the time at which any tax would be payable on gains from investments in convertible notes would be effectively deferred until the shares arising from the conversion were sold.
"Until the recent changes, an investor made a taxable gain when convertible notes were converted into shares that were worth more than the cost of the note," he said.
"These changes effectively defer calculation of any gain and the payment of tax until investors dispose of the shares."
The change only applies to notes issued after the Minister for Revenue and Assistant Treasurer Helen Coonan announced the measure on May 14 2002. It does not apply to convertible notes acquired by an investor after May 14 2002 if they were first issued on or before that date.
To be eligible for the new tax treatment convertible notes must meet a raft of requirements including being a "traditional security" – that is a debt security not issued at a substantial discount to face value and without features that defer income.
FRL buys contractor
FINANCIAL Resources Limited has agreed to buy Kalgoorlie-based contracting and hire business Alljay of $1.67 million.
That price is conditional, including the business meeting future performance hurdles.
The payment is split $600,000 cash on settlement, a further $320,000 cash depending on Alljay achieving performance hurdles and 3,947,400 Financial Resources shares and 1,973,700 listed options exercisable on May 31 2008.
The sale is also conditional on the acquisition being ratified by FRL’s board, the company receiving approval for the acquisition from its bankers and FRL completing a full due-diligence review of Alljay.
Alljay has unaudited annual revenue in excess of $3.7 million and earnings before interest, tax and depreciation of $729,000 for the 2003 financial year.
The company had been a lending client of FRL since 1994.
Australian food industry breakthrough
PERTH-based Carnegie Corporation has announced the first commercial sale of a unit incorporating Western Australian steam-powered PDX technology in the UK.
The technology, initially developed in WA for marine propulsion, was sold in 2001 to London-based Pursuit Dynamics by Carnegie’s venture capital division.
Pursuit Dynamics’ maiden sale is to UK-based prepared foods manufacturer Welcome Food Ingredients.
Carnegie holds one million shares in Pursuit Dynamics and a royalty of 1 per cent of the gross revenues generated from the exploitation of the intellectual property.
Pro Medicus targets GPs
PRO Medicus has acquired the intellectual property to Medibase, a clinical records system that it says will enable it to aggressively compete in the general practitioner desktop space currently serviced by HCN’s Medical director and other clinical record products.
The company intends to leverage the relationship it has with the 14,500 GPs on its promedicus.net e-health network to quickly build market share for Medibase.
About 16,000 GPs are reported to be using Medical Director as their script writing and patient management software.
Alpha West pays up
SOLUTION 6 Holdings has announced receipt of the first instalment of the vendor finance it provided to Alpha West on April 1.
The first tranche was $8,937,500.
The remaining amount of $6.5 million is payable in instalments over the next two years.
As part of the arrangement Solution 6 has also received 2,318,896 options in AIS, the listed body that acquired Alpha West, with an exercise price of $0.65 each and an expiry date of March 31 2006.
RiTract appoints manufacturer
RITRACT, a company linked to Western Australian health entrepreneur Michael Boyd, has signed an initial heads of agreement with the Shandong Weigao Group to make its retractable syringes.
The agreement outlines the terms of cooperation between the two companies and includes manufacturing, product development and distribution arrangements between the companies.
The two companies are working towards the first pilot production run of three millilitre syringes for clinical use over the next few months.
Following successful clinical trials, RiTract expects commerical sales to commence in the second half of the calendar year.
Hardman sells down
HARDMAN Resources has completed the sale of interests it previously acquired from ENI-Agip in two production sharing contract areas offshore Mauritania, West Africa to BG Group for $US132 million.
In addition, BG assumed an ongoing liability to ENI-Agip of about $US5.1 million, payable contingent on the attainment of certain exploration and production milestones.
Hardman agreed to sell BG a 13.084 per cent in the PSC covering area A and an 11.63 per cent interest in the PSC covering area B, offshore Mauritania in February.
Those interests had been acquired by Hardman as a result of the non ENI-Agip joint venture partners pre-empting a proposed sale of the ENI-Agip stake to a major international oil company.
The sale settled on March 31 with the consent of the other Mauritanian joint venture partners.
THE Western Australian Rogaining Association has held its 100th bush Rogaine at Dryandra on April 3. It has climaxed 25 years of rogaining in WA.
The iron man tag is often given to the sport. To achieve the number of points in order to win the event competitors find themselves running up and down hills and fording rivers in all sorts of weather.
Subject to the course anywhere between 40 kilometres and 100 kilometres can be traversed to accumulate the largest amounts of points.
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