Steppe Cement Share Discussion Threads

[eggbaconandbubble] 10/1/2024 14:36

Someone is buying these big time!

[aleman] 05/1/2024 12:04

Kazakhstan's stockmarket index hit a new all-time high today.

After years of KZT falling against GBP, it's still the same exchange rate as 3 years ago. Does this mean growth in asset values/investments is no longer being eaten away by the depreciating currency?


free stock charts from uk.advfn.com

[aleman] 04/1/2024 14:13

Kazakhstan WHT changes took effect on January 1st 2023. We've known about those quite a while. I suppose there could be new proposals somewhere but I can't find any.



The Netherlands changes are more recent.



I think they've just kitchen sinked the statement a bit to prepare us for further delay. A restructuring might take a while. At least they've said they've set money for a return to shareholders aside and the Kazakhstan cement market is looking strong in the last few months.

[aleman] 04/1/2024 13:13

zangdook - Kazakhstan was just about not paying at interims until shareholders approved at the finals. They overcame the Malaysian issue when an exception was granted to income coming into Malaysia and going straight out again - but not until after the legislation had been passed months earlier. I think the latest problem is changes in a recent Netherlands clampdown on tax-dodging structures.

I did say a return of capital through the subisidiaries - not just the holding company.

If the Glencore distributions are returns of capital, UK shareholder should not be declaring it as income. A return of capital increases accrued capital gain and is not an income liability, as it would flikley be for STCM holders if it happened. It's not just a change of name.

[scrwal] 04/1/2024 13:12

The Kazakh problem was the wht on interim divis which the company wasn't willing to risk paying so it was opting to pay a final divi only which did not attract any wht.

However even though this was sorted the Malaysian tax issues cropped up affecting the company but also I believe had some direct impact on the Malaysian holders themselves.

The rns on 13 Dec also referred to the Netherlands changing legislation as well so the problems are at multiple levels of the corporate structure which is a nightmare for tax planners.

There may be a nuke the structure option on the table as a last resort but this could well be the cleanest and most viable option going forward - I have no idea what it involves or how shareholders would be affected. This may explain the current inertia over updates and action because of the eventual action that may be necessary.

[eggbaconandbubble] 04/1/2024 12:45

Well said! re 5907

[zangdook] 04/1/2024 12:44

Some excerpts from the 2022 Annual Report:

Some changes to the tax treatment of
the chain of dividend flows from the operating
subsidiaries in Kazakhstan have been studied with
professional firms and will be implemented to
simplify the structure,

If the problem arises at an earlier stage than the final payout from the holding company to shareholders, changing the nature of that final payout from "dividend" to "distribution" or "tender" or "buyback" is unlikely to change anything.


As a result of the changing tax regime, both in Kazakhstan and Malaysia, the Company has been exploring
restructuring options in order to minimise the taxation risk on the flow of dividends to shareholders from the
operating subsidiaries going forward.

Again, Kazakhstan tax will be concerned with dividends paid between different elements of the corporate structure, not the eventual payments to shareholders.

Any dividend distributions to be made by foreign subsidiary companies are subject to dividend withholding tax ranging from 15% to 25% which may be reduced to 5% or waived subject to compliance with the relevant tax treaties requirements......

....Under the Malaysian tax law, any dividend income received by Malaysian subsidiary companies will be credited into an exempt income account from which tax-exempt dividends can be distributed. There is no withholding tax on dividends distributed by Malaysian subsidiary companies. However, in the tabling of Budget 2022, the government had announced that foreign source income will be taxed from 1 January 2022.
Under the Labuan Business Activity Tax Act, 1990, any dividends received by the Company from Steppe Cement (M) Sdn. Bhd., a subsidiary company incorporated in Malaysia, will be exempted from tax. There is no withholding tax on dividends distributed to its shareholders.

So it seems that, as well as some complication in Kazakhstan, there may be a problem with "foreign source income" coming into Malaysia, but not with the eventual payments to shareholders.

[zangdook] 04/1/2024 12:24

If all you have to do is call it "capital return" or some other form of words instead of "dividend" you could follow the example of Glencore which never pays "dividends" but pays "distributions" twice a year.

If it were as simple as using a different word to describe the payment I don't believe we would have been waiting all this time.

[wilo101] 04/1/2024 11:41

The Blind leading the Blind

[aleman] 04/1/2024 11:35

Money can be brought to the UK to pay dividends - but at a higher withholding dividend tax rate through the subsidiaries than the company would like to pay. A capital return through the subsidiaries might - and I do stress the might bit - avoid this. I don't pretend to know how it might work or how tax authorities in the Netherlands and Malaysia might react to it. I'd just suggest that a capital return would have a different tax treatment from the withholding taxes that are getting in the way of the dividend.

I might add, it would likely have a different tax treatment for the receiving shareholders as well.

[zangdook] 04/1/2024 11:27

Perhaps I misunderstood, but I thought the tax problem prevents subsidiary parts of the corporate structure paying dividends to the holding company to be sent on to the UK. If money can be brought to the UK, why would the Kazakh, Malaysian or Dutch authorities care whether it's used to pay us dividends or to buy back some of our shares?
If it was that simple they would have done it already - RAV used to do tender offers instead of dividends twice a year.

[aleman] 04/1/2024 11:11

If the tax problem is withholding taxes on dividends, why would it stop a tender offer?

[zangdook] 04/1/2024 10:53

Hm...nothing will happen until they get the tax problem sorted out, and when they do the share price will recover in anticipation of resumed dividends. So they'd have to pitch it a bit higher than that, I think.

[stun12] 03/1/2024 17:30

Has a limited tender for shares at a premium been discussed here? Saw it with UKML, and open to all with successful tenders scaled to the amount to be repurchased. So STCM could offer with their $4m to buy 10mm shares at 31.7p, for example. In the UKML example, many holders didn't tender, so instead of me selling the pro rata 10% of my holding at a ~5% premium, I sold more like a third. Potentially, the optics of the big insiders taking up the offer would be harmful too.

[aleman] 03/1/2024 17:01

Kazakhstan December manufacturing PMI 48.6 from 48.0. Another interest rate cut is expected in two weeks. The stockmarket looks like it might hit a new all time high in the run-up.

[aleman] 28/12/2023 16:30

The very strong rise in new car sales in Kazakhstan to repeated new records in the last year is interesting because I believe it was mandated a while back (pushing a couple of decades ago) that all new highways should be of concrete construction.

[wilo101] 28/12/2023 01:21

The CEO and Board have had since 311222 to pay the 2022 dividend and they and Deloitte's have entirely failed and the company and all of its stakeholder and this is crass and gross incompetence by all concerned and was all easily avoidable and fixable if they knew what they were doing, which they clearly do not. This means that, in effect, the 2022 and 2023 dividends, if any will be paid late and together. the problem is also the CEO's conflicts of interest given his involvement with Maxam the explosives supplier undeclared ans also his other competing interests and largely absent status, focused on things other than STCM, its assets and business.

[mattjos] 20/12/2023 11:54

plenty of experience on the Board and amongst the largest shareholders for the CEO to tap into.

Far rather the CEO is expert on 'the business' itself

[wilo101] 20/12/2023 11:53

Simple and easy its just the present CEO is a project manager/constructor and this is not his area of strength, whilst Deloitte/Big 4 are the wrong choice for such corporate and investment structuring and tax planning.

[aleman] 20/12/2023 09:06

Kazakh November cement production of 882k tonnes beat the 2020 November record by about 4% and is about 15% above November of last year. Following on from October's marginal new national record of 1168k and a decent recovery in Q3, H2 is shaping up to be strong national Kazakh cement market environment for STCM to be operating in. I imagine it will create a good environment for improving margins if it keeps up.


More on new Dutch taxes



So the company is likely to be doing well again but how they get the profit to shareholders is a completely different kettle of fish.

[wilo101] 15/12/2023 01:27

The CEO and Deloitte's are not up to the job,they do not know what they are doing and this is not their expertise as the events to date show and prove.

[scrwal] 14/12/2023 22:20

The problem is that they are juggling several tax regimes which are changing whilst having to also consider the personal tax aspects of the major shareholders.
The holding company is UK based but it is the corporate structure below that where the problems exist.
There is a distinct probability that the problems can't be resolved and there are no capital distributions etc either unless the corporate structure is blown up and is replaced but this would be the last resort and may not suit the Malaysian holders anyway.

[thordon] 14/12/2023 20:38

Only applies to Interim dividends' , year end has no effect.
Easy solved by moving headquarters to the UK or any other country that has no restrictions.