OTCPK:PALDF - Post by User
Comment by
Bigseeon Dec 18, 2012 1:50pm
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Post# 20746301
RE: Rights offering???
RE: Rights offering??? I'm not an advocate of gold assets being dumped for the sake of being dumped. Also, I disagree with the market attacking zero value. I do not. The gold asset sale makes sense, provided they can get a decent price and some real cash to defer financing.
The rights offer question came to mind after seeing Lonmin successfully shore up their balance sheet with one. Granted they are very different companies in different situations. Any rights offer would need to be accompany by the addition of qualified management, who can convey a clear, convincing plan, plus a reverse stock split. But wouldn't any sizable financing also require both of these things?
I found your tax supposition intriguing. I am no tax expert, but I took a few minutes to search the topic. I get the impression that it's far more complicated than you laid out and also not as lucrative for the acquiring company. Still, there is some additional buy-out value that I hadn't really considered. These days, every little positive counts.
From KPMG "Canada-2012.pdf"
"Net capital losses may not be carried forward after an acquisition of control. In addition, accrued capital losses on capital assets of the corporation are deemed realized, which results in a write-down of capital property to their fair market value.
On an acquisition of control, accrued losses on depreciable properties are deemed realized and bad debts must be written-off. These deductions from income in the taxation period that ends at the time of the acquisition of control may increase the target corporation’s non-capital losses. Non- capital losses are deductible after an acquisition of control within the carry forward period if certain requirements are met. Non-capital losses from carrying on a business are deductible after the acquisition of control if the business that sustained the losses continues to be carried on with a reasonable expectation of profit.The losses are deductible only to the extent of the corporation’s income from the loss business or similar businesses…"