Distribution to Shareholders (2185I)

TIDMESG

RNS Number : 2185I

eServGlobal Limited

10 June 2011

ESERVGLOBAL LIMITED ("eServGlobal" or "Company")

DISTRIBUTION TO SHAREHOLDERS

10 June 2011

Further to the announcement made by eServGlobal Limited (ASX: ESV & LSE: ESG) on 25 November 2010 regarding the proposed distribution to shareholders (as voted upon by shareholders at the Company's last AGM), the Company has undergone an extensive process with the Australian Taxation Office (ATO) regarding the distribution. Subject to the matters set out below, and as a result of the enhanced opportunities on Homesend and PayMobile, the amount of the distribution will be amended to A$0.29 per share rather than A$0.33 per share.

During this review period, the Australian dollar has strengthened considerably. As such, for UK investors who hold shares by way of depositary interests and who now make up more than 46% of the company's register, the total distribution is currently valued at GBP0.19 per share, a small reduction from the GBP0.205 per share value as at the 25 October 2010 announcement.

The distribution does not impact the A$24M from the sale of the USP business remaining in escrow.

The payment is to be made partly as capital and partly as a dividend:-

-- 16.85 cents per share by way of a return of capital

-- 12.15 cents per share by way of a dividend:

o 8.30 cents per share will be franked, with an attached franking credit of 3.55 cents per share

o 3.85 cents per share will be unfranked.

The split in the payment to shareholders between capital return and dividend results solely from the view that the ATO has formed in relation to the taxation treatment of the payment.

It is important to note that the payment of the proposed distribution is subject to:

-- a further shareholders' meeting approving the revised form of distribution; and

-- a Class Ruling from the ATO confirming this treatment, expected by early July.

The distribution should not be subject to Australian withholding tax for non-Australian shareholders, as the unfranked portion of the dividend will be paid from "conduit foreign income". This change in structure should therefore make no difference to the withholding tax liability of non-Australian shareholders who now make up 71% of the Company's register.

Australian shareholders subject to capital gains tax on the ultimate sale of their shares should have a cost base reduction of A$0.1685 per share.

It is anticipated that the ATO will issue a Class Ruling by early July, outlining their view on the tax treatment of the arrangements.

The Company expects to call a shareholders' meeting after the Company receives the Class Ruling and if approved, proposes to pay this distribution in mid-August 2011. The Company will provide more detail regarding the date of the shareholders' meeting, the record date and the date for payment once the Class Ruling is received.

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eServGlobal specializes in Mobile Money solutions and Value-Added Services (VAS), to help Telco Service Providers increase their revenue and gain and maintain customer ownership.

eServGlobal invests heavily in product development, using carrier-grade, next-generation technology and aligning with the requirements of more than 60 customers in over 45 countries. For 24 years, mobile, fixed, Internet and multiplay telco providers have used our capabilities to lead and innovate in their local markets, leveraging their core assets and their trusted agent and subscriber relationships.

With 13 offices globally, eServGlobal provides full "end-to-end" and "any account to any account" Mobile Financial Services and International Money Transfers.

Our Value Added Services in promotions, loyalty, messaging, and multiplay are focused around the transaction and enable service providers to engage with the subscriber in a personalized and dynamic manner.

To reduce time-to market and manage exposure to CAPEX, we now offer multiple licensing alternatives, including SaaS-based flexible, revenue-share pricing.

eServGlobal Limited is listed on the Australian Securities Exchange (ASX: ESV) and the London Stock Exchange AIM market (LSE: ESG). More information can be found at: www.eservglobal.com

 
 eServGlobal Limited              T: [phone] 
 Tom Rowe                       [e-mail] 
 Company Secretary 
 
 Cenkos Securities plc                www.cenkos.com 
 Ivonne Cantu/Stephen Keys   T: [phone] 
  (Nomad) 
 Alex Aylen/Julian Morse           [e-mail] 
  (Sales) 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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