The Company has been through several major corporate actions over the past few years. Below is a time line of these events, intended to give you an overview of the changes made to the structure of the Company and the way in which it makes payments to its shareholders.
New share certificates in Rolls-Royce Holdings plc were issued on 31 May to be received on or after 1 June. Shareholders received one ordinary share in Rolls-Royce Holdings plc for each ordinary share held in Rolls-Royce Group plc. All existing payment instructions in respect of C Shares were carried forward to the Rolls-Royce Holdings plc share register.
At the Company’s AGM, and subsequent EGM, shareholders approved the Scheme of Arrangement. Rolls-Royce Holdings plc was admitted to the official list on 23 May.
Before the Scheme of Arrangement was approved by to shareholders, it was necessary for the Company to compulsorily redeem all outstanding redeemable C Shares of 0.1p in the capital of Rolls-Royce Group plc. Shareholders were sent their C Share redemption proceeds and a pro-rated C Share dividend.
The Company announced its intention to introduce a new top holding company by way of a scheme of arrangement to be known as Rolls-Royce Holdings plc. The Company announced its intention to put in place a new holding company for the Group, to be known as Rolls-Royce Holdings plc. This created sufficient distributable and merger reserves for the Company to continue making payment to shareholders in the form of C Shares. Continuing to make payment to shareholders in this way will to continue to help in the recovery of the Group’s £182 million of historic advance corporation tax.
All existing Payment Instructions, made in respect of B Shares, were carried forward and applied to C Shares. Shareholders, who’d previously received cash by choosing to redeem B Shares, now received cash from the redemption of C Shares. Shareholders, who’d previously received additional Ordinary Shares by choosing to convert B Shares, now received additional Ordinary Shares by participating in the CRIP. C Share certificates were sent to all shareholders who had not completed a Payment Instruction form.
Before C Shares could be issued, it was necessary to compulsorily redeem all B Shares in issue. Shareholders received their B Share redemption proceeds and a pro-rated B Share dividend. Any shareholders who had an instruction in place to convert B Shares into additional Ordinary Shares were also sent their residual balances. All payments were made by cheque.
The increase in the Company’s issued share capital, which occurred when shareholders chose to convert B Shares into additional Ordinary Shares, was inconsistent with the Company’s strategy of maintaining a more efficient balance sheet and limiting Earnings Per Ordinary Share dilution. The only material difference between B Shares and C Shares is that C Shares do not carry the right to convert into Ordinary share. Shareholders who wanted to continue acquiring additional Ordinary Shares could do so by participating in the C Share Reinvestment Plan (the CRIP). The CRIP is a scheme operated by the Registrar in which C Shares are redeemed for cash and this cash is reinvested in the purchase of additional Ordinary Shares on behalf of the shareholders.
Redemption payments were sent to all those shareholders who had elected to redeem B Shares. Ordinary Share certificates were sent to all of those shareholders who had elected to convert their B Shares. B Share certificates were sent to all shareholders who had not completed a Payment Instruction form. B Shares were then issued in January and July of each subsequent year. With effect from January 2005, any shareholder who’d retained B Shares was also entitled to the small cash dividend, paid at 75% of LIBOR.
B Shares were redeemable convertible preference shares of 0.1p in the capital of Rolls-Royce Group plc. Shareholders could choose to redeem their B Shares for cash, convert them into additional Ordinary Shares by completing a Payment Instruction form. Shareholders who did not complete a Payment Instruction form received a B Shares. B Shares carried the right to a small cash dividend, paid at 75% of LIBOR. Making payment to shareholders in this way, as opposed to paying a dividend, helped the Group in the recovery of £182million of historic advance corporation tax.
Rolls-Royce Group plc was admitted to the official list on 23 June. Rolls-Royce plc shareholders received one ordinary share in Rolls-Royce Group plc for each ordinary share held in Rolls-Royce plc. New Rolls-Royce Group plc share certificates were issued to every shareholder and Roll-Royce plc share certificates became invalid.
Following changes to the Rolls-Royce group of companies (the Group) and its businesses over the years, the existing corporate structure, in which significant trade was carried out by the listed parent company, was no longer the most appropriate structure. To improve efficiency, and in doing so bring the Group’s corporate structure in line with the majority of other FTSE 100 companies, the Company proposed the introduction of a new, non-trading, holding company to be known as Rolls-Royce Group plc, by way of a Scheme of Arrangement. This was approved by shareholders at the Company’s Annual General Meeting in May 2003.
Rolls-Royce plc was incorporated on 1 May 1986. Rolls-Royce plc ordinary shares were first offered to the public for sale in 1987 and the original offer price was £1.70 payable in two instalments of 85 pence. The first instalment and application had to be received by 7 May 1987 and the final instalment had to be received by 23 September 1987.