Issue
The fund received cash payment for the fractional entitlement to a HUB24 share that is rounded down during the corporate action implementation.
How to process it in Class?
Background
On 16 February 2022, HUB24 Limited (ASX: HUB) completed its acquisition of Class Limited (ASX: CL1). The takeover consideration consists of:
-
scrip consideration of 1 HUB Share for every 11 CL1 Shares held at the Scheme Record Date; and
-
cash consideration of $0.125 for every Class Share held at the Scheme Record Date
Class has automated the corporate actions for the above-mentioned Cash & Scrip Takeover of Class Limited (CL1) by HUB24 Limited (HUB).
However, in case the holders have fractional entitlement to a HUB share that is rounded down and receive the payment in cash for the fractional consideration, there is one additional manual step that needs to be done before processing the automated corporate actions for the takeover.
Resolution
Step 1: Process listed security sale event for CL1 fractional units
Navigate to Fund Level > Transactions > Investment - Sell > Listed Security Disposal
- Sell the CL1 fractional units for the same amount of payment that was received from HUB24 for the fractional consideration on 15 Feb 2022 which is one day prior to the corporate action date.
For example, on 15/02/2022, the super fund held 6,075 units of CL1.
6,075 / 11 = 552.2727273 units in HUB
This means there is 0.2727273 fractional unit of HUB.
0.2727273 * 11 = 3 units in CL1 that need to be disposed of.
The fractional consideration payment is 0.2727273 * $28.03 = $7.64.
Hence, the listed security sale will have the Units field as 3 and the Trade Value field as $7.64.
- Match the listed security sale event from step 1 with the cash received.
Step 2: Process automated corporate actions
Navigate to Fund Level > Investments > Browse Corporate Action
- Action the two automated corporate actions on 16/02/2022 for scrip and cash components respectively.
