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Bermuda Broadcasting Company Ltd. (BBC) Delisting and Re-organization
It was noted that BBC had not been in a position to declare a dividend for a number of years. Despite the financial set backs of the past financial year the Board of Directors had worked to eliminate all inter-company debts held with BBC's subsidiary Devonshire Properties Limited ("DPL") with the intent that the operating company and the investment holding company become completely separate entities.
As a result of the elimination of the inter-company debts, it was noted that the operating company could now truly operate independently. DPL is an investment holding company and owns the real estate from which BBC operates; in addition it holds a small portfolio of investments.
Now that the inter-company debts had been eliminated, the Directors proposed to declare a dividend (in specie) of all the shares owned by BBC in DPL, to all Members of record at the close of business on the 4th May, 2001. This meant that rather than receiving a cheque by way of dividend, each and every one of the shareholders shall receive the same number of shares in DPL that they have in BBC. It was noted that BBC's auditors, Ernst & Young, had confirmed that BBC has sufficient assets available, after taking into account the criteria set out in Section 54 of the Companies Act 1981, to effect the proposed dividend of shares and achieve separation of the two entities.
It was noted that the Directors wished to ensure that every shareholder in BBC gets his or her equivalent share holding in DPL. This will require changes to the Memorandum of Association of DPL to be processed before the shares can be issued. The dividend would be distributed on or before the 31st July, 2001.
As a result of the reorganization of BBC and streamlining of the various entities coming under the umbrella of BBC, the Directors were of the view that there is no useful purpose to be served by the operating company continuing as a listed company on the Bermuda Stock Exchange at this time.