ECP Emerging Growth Limited (ASX:ECP), a listed investment company, focuses on identifying and investing in emerging growth companies. It leverages its listed investment company structure to provide advantages over open-ended investment vehicles. The company announced today that its board has resolved to pay a special dividend of 10 cents per share, contingent upon the company’s Dividend Reinvestment Plan (DRP) participation reaching 80% of total shares.
The rationale behind this condition is to ensure that ECP can continue to grow while still providing shareholders with access to the company’s franking credits. ECP currently holds a substantial franking credit balance, which, while not reflected in net tangible assets, offers a tangible benefit to shareholders via dividends. Franking credits reduce double taxation on earnings, and zero-tax investors may even receive a cash refund for these credits.
The company clarified that this special dividend will not impact ECP’s ability to pay its regular semi-annual dividends. The special dividend is intended to reward long-term shareholders and distribute a significant value of franking credits without diminishing the company’s size. Currently, DRP participation stands at 36.7%, including support from the company’s major shareholder.
ECP Emerging Growth encourages shareholders to support this initiative by opting into the DRP through Automic, the company’s share registry. Updates on the DRP status will be provided via monthly NTA announcements. The company welcomes any questions or comments from shareholders via email.