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NYSE-registered China Digital TV, which specialises in the supply and management of Conditional Access technology for China-based cable and IPTV companies, has declared a special cash dividend for shareholders of $1.50. It filed a statement with the US SEC on April 21st.
As of December 31st 2016, China Digital TV had cash and cash equivalents totalling $122 million, and the shareholder’s equity was $123.1 million. The aggregate amount of cash dividends to be paid is approximately $90.4 million based on the number of outstanding shares as of December 31st 2016. The payment of the special cash dividend is expected to reduce both the Company’s market capitalisation and shareholder’s equity.
“These [payments] will significantly increase the risk of rendering it ineligible for being listing on the New York Stock Exchange,” said the company statement.
The news, and the notice that the payment qualifying eligibility date is May 31st 2017, prompted a sharp rise in China Digital’s NYSE share price, from $1.27 on the morning of April 20th to a peak of $1.80 by the end of the day and with the price stabilising at $1.65-$1.71 during April 21st.