Aim-traded clean energy investment company Leaf Clean Energy (LEAF:130p) has announced a compulsory redemption of 99.35 per cent of its issued share capital at 122.8p share to return £21.5m to shareholders, having previously returned £53.1m of its cash pile by way of a compulsory redemption of 66.47 per cent of its issued share capital at 151.94p per share in August this year (‘Banking Leaf’s massive payout’, 1 Aug 2019).
Leaf has a cash pile of £28m (158.8p a share), but is reserving £6.5m against its best estimate of further costs and liabilities, including: £2.7m for incentives plan payments to employees and directors relating to the latest redemption; £1.9m for additional tax liability in respect of the gain on the court-ordered redemption of Leaf's stake in Invenergy Wind LLC, North America's largest independently owned wind power generation company; £600,000 for running costs through completion of the wind down; and £1.3m for costs relating to preparing for and completing the liquidation of the company.
The compulsory redemption will be effected pro rata to shareholdings on the register at the close of business on 5 November 2019 on the basis of 99.35 shares redeemed for every 100 Shares held. The payment date is 12 November 2019. Post the redemption, the balance of your shareholdings not redeemed will be allocated a new ISIN (KYG541351352).
Although this final redemption is less than I had hoped for when I rated the shares a hold a month ago (‘Leaf Clean Energy cleans up in court’, 24 September 2019), the two compulsory redemptions this year still represent a 273 per cent capital return on my recommended 38p entry point when I first advised buying Leaf’s shares (‘Pointing to a successful outcome’, 19 Apr 2016). Hold.
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