Plato Investment Management has launched a $200 million entitlement offer into its listed investment company (LIC) to meet growing investor need for dividend payments as a source of income.
Plato stated the new offer for the Plato Income Maximiser LIC would meet the increasing investor demand for an alternative to their cash and fixed interest income following the low cash rates and bond yields of recent times.
Plato Investment Management director Don Hamson said: “It is becoming increasingly difficult for retirees to live off the income from cash and fixed income given current RBA (Reserve Bank of Australia) cash rates at a record low 1 per cent and 10-year commonwealth government bonds trading at a yield below 1 per cent.
“Retirees are struggling to make ends meet and should reconsider their income sources to look at active dividend investing.
“Given the recent election result, retirees can continue to bank on receiving franking credits from Australian share investments and should consider taking advantage of the higher income on offer from them.”
The offer, which consists of 1 new share for every 1.6 ordinary shares held by existing eligible shareholders on the record date of 13 August, has a closing date of 30 August.
“Benefits from the offer include a larger market capitalisation, which is expected to attract greater research coverage and provide more liquidity, a more diverse shareholder base and a lower management expense ratio,” Hamson said.