The Company will distribute a cash dividend of $ 20 million and an additional dividend of $ 35 million subject to court approval.
Gilat Dual Satellite Networks announced today that the company’s board of directors has announced a cash dividend distribution to shareholders in the amount of 36 cents per share (a cumulative total of approximately $ 20 million). The dividend will be paid in dollars on December 2, 2020, to shareholders who will be registered in the Company’s shareholders’ register on November 12, 2020.
In addition, in accordance with the requirements of the law in Israel, the Board of Directors approved the submission of an application to the Israeli court for approval of the distribution of an additional dividend in cash of approximately $ 35 million. The company will publish an update in due course regarding the submission of the application, which is expected to be due in November, as well as regarding the court’s decision. Subject to the approval of the court, the board of directors will determine the determining date and the date of payment for the additional dividend.
As you may recall, in October, the merger agreement that Gilat signed with Comtech was canceled in January this year, in a settlement reached in legal proceedings in the State of Delaware’s Economic Court. As part of the settlement and cancellation of the merger agreement, Comtech has agreed to pay Gilat $ 70 million, and the company now reports that most of the amount reached in the settlement agreement will be distributed to investors as a dividend.
“Following the cancellation of the cancellation fee from Cometech, we are pleased to distribute this significant dividend to our shareholders,” said Adi Tzafdia, Gilat’s CEO. We have to distribute the said dividend while continuing to examine interesting investment options that will allow us to accelerate our growth. “Mr. Tzafdia concluded.
In accordance with Israeli tax laws, the company will originally deduct 25% of the gross amount to be paid as a dividend to shareholders. The payment of the dividend may be subject to certain exemptions (including a tax exemption on the distribution of dividends to Israeli corporations that are exempt from withholding tax in Israel) and tax relief.
In addition, the Company intends to submit an application to the Israel Tax Authority for the determination of procedures in relation to eligible shareholders who are residents of a country with which Israel has a tax treaty and in which the withholding tax rate in connection with a dividend is lower than in Israel.
To this end, the company has appointed IBI Trust Management as a trustee for tax purposes, which will operate in accordance with the Israeli Tax Ordinance. A shareholder who holds his shares not through an Israeli financial institution, and is subject to a lower tax rate as a resident of a country with which Israel has a double taxation treaty, may apply to a trustee for tax purposes in order to determine eligibility for a reduced withholding tax rate.
Such a shareholder will be able to submit to the trustee for tax purposes the documents specified in the instructions document, which will be published on the company’s website on the “Investors Relations” page, subject to a tax decision from the Israeli Tax Authority.
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