The Cardno Limited (ASX: CDD) share price is pushing well into the green today as investors rally the share to its highest mark since 7 July.
At the time of writing, the ASX share is trading more than 37% higher on the day at 89.5 cents apiece, bringing its gains from last Thursday's close to more than 110%.
Image source: Getty Images
What's driving this ASX share higher?
On 30 June, the company completed the sale of Cardno International Development to DT Global Australia Pty Ltd.
It confirmed the first tranche of the distribution was paid on 14 July to Cardno shareholders. This comprised of a capital return of $9.4 million or 24 cents per share and an unfranked dividend of 78 cents per share.
The company then announced last week that the second tranche of the distribution is expected to be paid in two parts – first on 22 August, with the balance of this settled by September 2022.
It now has to figure out what the next steps will be after finalising the remaining distribution payments from the Cardno International Development sale.
Noteworthy, however, is that the company is set to wind down its wholly-owned subsidiary, Sustentable, formerly known as Caminosca.
This business [Sustentable] is involved in a number of court actions that may lead to between US$0 and US$15 million of recoveries and has between US$0 and US$200 million of contingent liabilities depending on the outcome of various legal actions.
The Cardno Board has received advice that it is unlikely that these contingent liabilities will affect the listed Cardno holding company, but that they may affect the potential for future recoveries from this wind down business. There remain costs associated with these legal actions.
Further updates are expected in the coming weeks to months per the language in the report.
In the meantime, the Cardno share price is down 91% in the past 12 months.
