Cavalier details capital return

The company is arranging a court approved return of capital and cancellation of shares. One in eight shares will be cancelled and shareholders will receive a payment of $5.60 for each share cancelled.

The company says the decision last year to close its wool trading business and restructure its involvement in wool scouring has released $40 million of underperforming capital.

"As a result, Cavalier expects to be virtually debt-free in two to three months," it says in a statement.

To provide the company with an efficient capital structure it has decided to replace $25 million of surplus funds with interest-bearing and return the money to shareholders.

The move will cancel around 4.5 million shares, leaving the company with 31.5 million shares on issue.

Cavalier is aiming to complete the share cancellation by the end of June.

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