IG Finance plc has announced a dividend of €4.5 million from retained earnings for the financial year ending 31st December 2024. However, rather than issuing this as a traditional cash payout, the dividend will be capitalised – that is, reinvested into the business through the allotment of new shares.

IG Finance plc is essentially a special purpose vehicle set up to act as a financing company solely for the needs of Impresa Limited and its subsidiary undertakings. The Impresa Group is mainly involved in the manufacture of high precision plastic injection-moulding, sheet-cutting and sheet-thermoforming, and electrical installation products.

This measure, as clarified in the company announcement, is aimed at strengthening the capital base of the company’s guarantor, Impresa Limited, by converting earnings into equity. As a result, Impresa has updated its memorandum and articles of association to reflect an increase in its authorised and issued share capital by 1.8 million ordinary shares, each with a nominal value of €2.50. These shares have been equally allotted between its two shareholders: KMN plc and EJB Limited.

Effective from 21st April 2025, Impresa’s authorised and issued share capital now stands at €5 million, comprised of two million ordinary shares – one million each held by KMN plc and EJB Limited.

Rather than taking money out of the company, shareholders are choosing to reinvest it back into the business. This strategy increases the company's equity, which is considered a more permanent and stable source of capital.

IG Finance and its guarantor Impresa Ltd are bound by covenants signed at the time of the bond issue that limit the distribution of profits to ensure that the company maintains a healthy financial position, thereby protecting bondholders.

From a bondholder’s perspective, this move could be viewed positively. By retaining earnings and converting them into equity, the company is effectively creating a stronger buffer to meet its financial obligations.