The Qantas Airways Limited (ASX: QAN) share price has edged higher on Monday after announcing the completion of its off-market buy-back.
At the time of writing the airline operator's shares are up 1% to $6.52.
What did Qantas announce?
This morning Qantas revealed that it has successfully completed its off-market buy-back of 79.7 million shares. This was the equivalent of 5.1% of its issued capital. Qantas undertook the buy-back at a price of $5.56.
Demand for the buyback was strong and a 78.69% scale back of tenders was required.
However, eligible shareholders who offered their shares at a 14% discount had a priority allocation of 100 shares bought back before the scale back was applied. Furthermore, tenders that would have left the shareholder with 100 shares or fewer were not scaled back.
The release also explains that shares offered at discounts of 10% to 13% were not bought back by the airline. The same applied to offers conditional upon a minimum price above the buy-back price.
What now?
If your shares were bought back, you'll have to consider the tax implications.
According to the release, the ATO has indicated that the capital component of the buy-back price will be $1.19.
It explains that for Australian tax purposes, the sale proceeds of the shares for entities other than companies will generally be taken to be the $1.19 capital component plus the amount by which the CGT value exceeds the buy-back price.
Though, this will be confirmed when the ATO issues its final class ruling.
In the meantime, investors that took part in the buy-back can look forward to being paid out next week. Qantas advised that payments to bank accounts and the dispatch of cheques are expected to occur on November 11.
