To life’s certainties of death and taxes, shareholders in undertaker Dignity can add another: a £54 million pay-out.
It’s only for this year, but funerals giant Dignity — which operates 690 funeral parlours and 39 crematoria across the UK — wants to take advantage of low interest rates to repackage its debts.
Its proposed deal with bondholders will save Dignity £14 million a year on interest payments.
Redeeming and reissuing debt is expected to trigger net proceeds of some £70 million, and about £54 million of that will be returned to shareholders in November — the fourth return of cash to shareholders since Dignity floated in 2004.
Dignity’s chief executive, Mike McCollum, said the debt deal was “an excellent transaction for both our shareholders and bondholders, [giving] the group the opportunity to lock its debt into the current favourable, low-interest rate environment for the longer term, whilst maintaining a structure that protects against increasing interest rates and refinancing risk”.
