HAMILTON, Bermuda--(BUSINESS WIRE)--Primus Guaranty, Ltd. (“Primus Guaranty” or “the Company”) (OTC PINK:PRSG) today announced that its Board of Directors has declared a distribution of $7.25 per common share, payable June 26, 2014 to shareholders of record at the close of business on June 17, 2014. The aggregate distribution will total approximately $158 million based on 21,786,187 common shares outstanding on June 5, 2014.
The distribution is being made pursuant to the Company’s Plan of Liquidation for U.S. Federal Income Tax Purposes (the “Plan of Tax Liquidation”) which was adopted in 2013 as the Company continues to implement its strategy of, among other things, seeking to return capital to shareholders. The Company believes that this distribution will be treated as a return of capital to a shareholder, to the extent of the shareholder's tax basis in its common shares, and thereafter as a capital gain, for U.S. federal income tax purposes. The Company urges all shareholders to consult their own tax advisors concerning their particular circumstances and the U.S. federal tax treatment of this distribution.
By adopting the Plan of Tax Liquidation, the Company has taken no action to commence the winding up and/or liquidation of the Company under its Bye-Laws, the Bermuda Companies Act 1981, or any other Bermuda law.
The Company believes that it is a “passive foreign investment company”, or PFIC, for U.S. federal income tax purposes, and consequently also urges shareholders to consult their tax advisors concerning their particular circumstances regarding their further acquisition, ownership, or disposition of the Company’s common shares. Further information regarding the Company’s PFIC status is available on the Investor Relations page of the Company’s Web site at www.primusguaranty.com. The Company notes that shareholders resident in the United States who own 1 percent or more of the Company’s common shares may have additional tax reporting to the U.S. Internal Revenue Service and accordingly such persons should consult their own tax advisors.
The Company also notes that, as the distribution represents greater than 25 percent of the value of the Company’s common shares at the close of trading on June 5, 2014, investors are cautioned to check with their financial advisor or other market professional as to the announcement by the Financial Industry Regulatory Authority (FINRA) as to the ex-distribution date to be established by FINRA for this distribution.
About Primus Guaranty
Primus Guaranty, Ltd. is a Bermuda company with offices in New York. Through its subsidiary, Primus Financial Products, LLC, the Company provides protection against the risk of default on primarily investment grade corporate reference entities. Its common shares trade on the OTC Pink Tier of the OTC market. Investors can find market information for the Company on www.otcmarkets.com.
Some of the statements included in this press release and other statements Primus Guaranty may make, particularly those anticipating future financial performance, distributions, tax matters, business prospects, operating strategies and plans, market performance, valuations and similar matters, are forward-looking statements that involve a number of assumptions, risks and uncertainties, which change over time. Any such statements speak only as of the date they are made, and Primus Guaranty assumes no duty to, and does not undertake to, update any forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements, and future results could differ materially from historical performance.