The rapidly shrinking QLT Inc. (TSX:QLT) announced on April 15 that it plans to distribute US$200 million cash to shareholders, or about $3.95 per share. The payout would go to shareholders of record on June 24 and be paid the next day.
The Vancouver-based company still needs shareholder approval on June 14 and other approvals for the special distribution.
The company’s shares rose 0.96% yesterday to $8.42 on the Nasdaq exchange – a price that means the special distribution equates to about 47% of the company’s value.
Once necessary shareholder and other approvals are secured, QLT will be able to make the cash distribution to shareholders without Canadian withholding taxes of up to 25% thanks to an advance tax ruling from Canadian tax authorities.
QLT employed more than 400 staff in its heyday in 2006.
It’s now down to 38 and may move from its office on Great Northern Way once its lease is up.
The company rose to prominence on the back of its Visudyne, which uses a combination of injections and light therapy to treat advanced macular degeneration, or age-related blindness.
Last year, QLT sold the rights to Visudyne to Valeant for US$112 million.
It told Business in Vancouver at the time that it planned to use the money from the sale of Visudyne to buy back US$100 million worth of QLT shares to increase the company's stock value.
Instead it will almost double that return to shareholders with the proposed distribution.
Combined with a previous stock buyback, the distribution will bring the total return of capital to shareholders to $227 million over the past 12 months.
“We are extremely pleased with the outcome of our persistent and resourceful efforts to return to shareholders more than twice as much capital as we had originally proposed,” said QLT chairman Jason Aryeh.
“Following the proposed cash distribution, the company believes that it will continue to have sufficient existing cash and contingent financial resources available to it for the development of its synthetic retinoid program.”
