On the last trading day before Christmas, NEW gave notice of a meeting of its shareholders to approve:

1. a further capital return of $0.135 (expected to be paid 8 February); and
2. its delisting (expected last trading day of 27 February).

NEW also indicated that an estimated $0.07 would be returned to shareholders following its winding up in Q3 or Q4 of 2023.

NEW closed at $0.20. It looks fully priced at this level despite the proposed early return of a good portion of the stub equity; but if it can be picked up a tad lower, the return may be reasonable for people on low tax rates.

The risk is with the timing and amount of the final payment. I suspect the $0.07 estimate will prove to be conservative (as there is nothing to gain by raising expectations when the company is to be delisted and wound up). Conversely, the timing may be more problematic given the winding up will involve affairs in the USA. While the circumstances aren’t entirely analogous, I’m mindful that the voluntary winding up of OneMarket Ltd which started in 2019 is still incomplete. Its business was US based.

NEW recently announced that:

1. the sale of its US solar farms had been completed;
2. the proceeds after loan repayments etc were some $13.6M greater than originally anticipated as a result of exchange rate movements;
3. the initial capital return of $0.82 per share would be paid on 1 December; and
4. an estimate of $0.205 per share would be available for further capital return(s).

Shareholders will asked to approve the delisting of NEW in anticipation of its winding up which is expected to be completed by the end of 2023.

NEW closed yesterday at $0.19. This seems rather fully priced given how long the winding up may take, uncertainty about how much more shareholders will ultimately receive and whether and to what extent some of it will be paid out in advance. That said, there is no obvious reason why at least the $13.6M windfall gain could not be paid as soon as the necessary shareholder approval could be obtained (say at the time of seeking approval for the delisting).

NEW is close to completing the sale of its US solar plants after which it expects to return its capital to shareholders in 2 tranches and be wound up.

Subject to some US regulatory approvals, the first capital return of $0.82 per share, should be paid this month.

NEW has foreshadowed making a second capital return before the end of 2023. The amount was estimated in August to be $0.16. This seems to be based on net sales proceeds of USD 224M which would convert to about AUD 325M at an exchange rate of 0.69. Converting at the current exchange rate of about 0.65 would result in NEW receiving about AUD 345M; or about an additional AUD 0.06 per share.

What the exchange rate will be when the sale completes is, of course, unknown. NEW entered into a currency hedge in late August which involved a cap of about 0.72. It said at the time that it will benefit from the rate being lower.

It doesn't seem possible for any benefit to be passed on immediately by way of adjusting the amount of the first capital return; as the $0.82 was recently approved by shareholders (along with the asset sale).

While some US regulatory approvals are yet to be received, there doesn't seem to be a reason to think that they won't be. A couple of fund managers have recently lodged substantial shareholder notices for NEW. They presumably have assessed the risk and are comfortable with it.