Wollongong City Council has agreed to sell its two shares in Southern Phone Company Limited to AGL Energy Limited at its meeting on Monday 18 November 2019.
We had been advised of an offer by AGL Energy Limited to acquire 100 per cent of the shares in Southern Phone in mid-October. Southern Phone recommended Council accept the offer.
Southern Phone was formed in 2002 and Wollongong City Council acquired two shares in the Company – one an ordinary share and the other a preference share at a cost of $2.
Since its establishment, Southern Phone has returned $16.8M to shareholders in dividends and community grants. Wollongong Council has received $1.347M in dividends which has been used in natural areas management and on-ground works. However, no dividend was paid in 2019, with little prospect for a return to dividend payment to shareholders envisaged in the next few years.
The offer from AGL to acquire 100 per cent of the shares in Southern Phones means Council would receive a fixed cash payment and special dividend returning approximately $875,000. Council will consider how the funds from the sale will be used as part of its annual planning processes.
