HMR, formed from Riverdeep's reverse takeover of Houghton Mifflin last year to create a $5bn (€3.7bn) group, is asking shareholders to approve the setting up of a holding company called Education Media and Publishing Group at an extraordinary general meeting to be held on July 9.
With more and more companies looking to establish a corporate structure in foreign lands - Bermuda (Stanley) and Dubai (Haliburton) and more companies considering going private because of current financial reporting requirements (SOX), Riverdeep is just another example of the trend.The Independent has seen documentation regarding the scheme that will enable HMR to achieve more flexibility in dividend payments and also greater confidentiallity regarding corporate accounting.
Net income seems to be more concept than precept down in the Caymans. According to the article, the company needs 75% of shareholder and High court approval. Currently they have exceeded the shareholder level (with O'Callaghan owning 48%) so it will be up to the High Court to approve. Doesn't seem in much doubt.
"Irish law largely restricts companies to make such distributions out of realised profit less realised losses. The definition of profit available in the Cayman Islands is much broader and so allows for greater flexibility in making distributions out of share capital subject to limited restrictions," comments Barry O' Callaghan the group's executive chairman.