Dave Mayfield for the Virginia Pilot writes: Two large shareholders of Liberty Tax Inc. have registered to sell blocks of stock in the Virginia Beach-based company.
The potential sales were disclosed in a document filed this week by Liberty with the U.S. Securities and Exchange Commission, which must approve the registration for it to become effective.
In its filing, Liberty said that Datatax Business Services Ltd., its largest shareholder, has registered to sell 2 million of the 3.46 million shares of Class A common stock it holds in the tax preparer. That would reduce the London, Ontario-based company's share of the common stock to 11.3 percent.
In addition, Envest Funds has registered to sell all of its approximately 870,000 common shares in Liberty.
Datatax is controlled by a Liberty board member, Steven Ibbotson. Another board member, John Garel, is listed in Liberty documents as Virginia Beach-based Envest's beneficial owner.
Liberty also registered for an offering of up to $200 million in securities, including senior and subordinated debt, common and preferred stock, depositary shares and warrants. It did not specify the amounts of each that would be issued.
Kathy Donovan, Liberty's chief financial officer, said Friday that the filing is intended to give the company more flexibility to raise money - but that no specific offering is planned at this time. She said Liberty recently became eligible for the offering, what's known as a "shelf registration," when the market value of shares owned by non-insiders topped $75 million.
Donovan said Datatax has indicated for some time that it wants to reduce its ownership of Liberty to below 10 percent, and that the registration would allow it to accomplish that sooner than it otherwise could.
She said neither Datatax nor Envest is required to sell the shares they've registered for potential disposal.
The registration would be effective for three years, Donovan said.
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