The demerger of Iluka Resources Limited and Sierra Rutile Limited was implemented on 4 August 2022.
Under the demerger, 100% of the issued Sierra Rutile shares were transferred to eligible shareholders on a one-for-one basis. The number of Iluka shares on issue on 4 August 2022 was 424,236,447. Iluka did not retain a shareholding in Sierra Rutile.
On 28 September 2022, The Australian Taxation Office (ATO) published the final class ruling regarding tax treatment of the demerger. The full ruling can be found here: ATO - Iluka Resources Class Ruling
Cost Base Apportionment
The cost base of Iluka shareholders’ pre-demerger holdings should be apportioned between their Iluka and Sierra Rutile shareholdings based on the following percentage:
Iluka – 96.52% Sierra Rutile – 3.48%
This reflects the Volume Weighted Average Prices (VWAP) for the two entities in the 5 trading days after the listing of Sierra Rutile on 28 July 2022 of $9.52 and $0.34 for Iluka and Sierra Rutile respectively. Further information on calculation of cost bases in a demerged entity is available from the Australian Taxation Office: Demergers | Australian Taxation Office (ato.gov.au)
Iluka Resources implemented the demerger of its royalty business, Deterra Royalties, on 2 November 2020.
On 9 December 2020, The Australian Taxation Office (ATO) published the final class ruling regarding tax treatment of the demerger. Further information on the calculation of cost bases in a demerged entity is available from the Australian Tax Office: ATO - Cost Base Calculations.
The tax cost base of Iluka shareholders pre-demerger holding should be apportioned between their Iluka and Deterra shareholdings based on the following percentage:
Iluka – 54.91% Deterra – 45.09%
This reflects the Volume Weighted Average Prices (VWAP) for the two entities in the first 5 days of trade post demerger (23-29 October) of $5.2083 and $4.2771 for Iluka and Deterra respectively.
In 2018, Iluka introduced a new Dividend Reinvestment Plan, under which eligible shareholders are able to invest all or a portion of their dividend entitlements in additional Iluka shares. This plan replaces the previous Iluka dividend reinvestment plan (introduced in 2007) which was suspended in 2010 and has been terminated by the Board of Directors.
DRP documents