Vodafone shares

Marksie

Does anyone know what has happened to teh vodophone shares.
If i read right the valus of shares has dropped to 1/10 they where when we got stiffed in the eircom deal.

indiewindy

They are down about 40% on what you would have got them for. A hefty loss on the same. It still makes me angry how I was fleeced considering the mega profits made by the ESOT and the other pillagers of the company:mad:
Just glad I sold my vodafone shares years ago;)
http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/shares/3/23228/one_month.stm

Marksie

indiewindy wrote:

They are down about 40% on what you would have got them for. A hefty loss on the same. It still makes me angry how I was fleeced considering the mega profits made by the ESOT and the other pillagers of the company:mad:
Just glad I sold my vodafone shares years ago;)
http://newsvote.bbc.co.uk/2/shared/fds/hi/business/market_data/shares/3/23228/one_month.stm

I read it wromng. it appears it is share consolidation and they have given you a return on your capital investment.
Not knowing much about stockmarkets i am still confused

rondjon

marksuttonie wrote:

it appears it is share consolidation and they have given you a return on your capital investment.

Vodafone have sold Vodafone KK, the Japanese arm of the company. They got cash for the deal, and since then the company is smaller and worth less than it was when Vodafone KK was part of the overall Vodafone group.

The manner in which they reflect this is that they give you special B shares where you get your share of the sale of Vodafone KK, and to reflect the fact that the company is smaller (worth less) because of the sale, for every 8 shares you had, you now get 7.

oceanclub

I just got a cheque today and got quite a shock; am I to understand that the money received today is not from my original shares (via the Eircom deal) but another set of shares altogether, and that my original shares are still there?

Going to ring tomorrow obviously,

P.

tonyboy247

not sure what your banging on about if you dont know about shares y did you get eircom anyway.. listen if ye crowd whant to sell then do it ..if you have objections plcs have agms so you can vote there. I will buy if you want to shift or need fast cash let me know.

ircoha

rondjon wrote:

Vodafone have sold Vodafone KK, the Japanese arm of the company. They got cash for the deal, and since then the company is smaller and worth less than it was when Vodafone KK was part of the overall Vodafone group.

The manner in which they reflect this is that they give you special B shares where you get your share of the sale of Vodafone KK, and to reflect the fact that the company is smaller (worth less) because of the sale, for every 8 shares you had, you now get 7.

I know this is not an advice bureau but is the money received subject to income or capital gains tax?

Sonnenblumen

ircoha wrote:

I know this is not an advice bureau but is the money received subject to income or capital gains tax?

I would have thought the monies would be subject to PAYE?

ircoha

Sonnenblumen wrote:

I would have thought the monies would be subject to PAYE?

See page 26 of this http://www.vodafonejourney.com/IR_downloads/vf_egm_circular_2006.pdf

It looks like if you took the B shares rather than the cash then no tax liability arises. what u have now is 2 sets of shares rather than 1 in Vodafone: Lucky us:mad: :mad:

However if you took the cash instead of the B shares then it is a capital gains tax issue

rondjon

ircoha wrote:

I know this is not an advice bureau but is the money received subject to income or capital gains tax?

Depends. If you got the money straight away, these are subject to paye via your tax return. If you got the shares, no tax liability right away, but subject to CGT when you sell them.

ircoha wrote:

It looks like if you took the B shares rather than the cash then no tax liability arises.

Not correct - if you took the B shares instead of the cash, then it is a capital gains tax issue when they're forcibly redeemed within the next 2 years.

ircoha wrote:

what u have now is 2 sets of shares rather than 1 in Vodafone: Lucky us

Yes, you have 2 versions of Vodafone shares, but you can only trade the ordinary shares on the stock exchange. The B shares aren't tradable, and you will eventually be sent a cheque for them, without any choice on your part.

ircoha wrote:

However if you took the cash instead of the B shares then it is a capital gains tax issue

Nope. As above, it's a paye tax issue if you took cash - you were essentially paid a divident. If you took the shares, you'll be liable for CGT when you sell them (they're forcibly redeemed).

ircoha

As we have 2 opposing opinions here, anyone up for the deciding vote.

I dont doubt for a moment that I am wrong, the paperwork I have talks about a reduction in capital and a reduction in my shareholding.

I elected not to take the B shares

rondjon

ircoha wrote:

anyone up for the deciding vote.

Dominic Coyle in the Irish Times, here.

Just when you think the Eircom saga has been put to bed for good, something else crops up to flummox those largely novice investors. The continued ownership of Vodafone shares by those investors - as a result of the disposal of Eircell - has only served to remind shareholders of how they were left nursing losses on the Eircom listing. The fact that Vodafone has significantly underperformed the market since Eircom shareholders were landed with the stock appears only to be rubbing salt into still open wounds.

Still, this time, you do stand to get something back from your investment. The global mobile phone giant decided recently to exit the Japanese market where it had been struggling to build a viable operation.

Following on from that it decided to return some of the money from the deal to shareholders. The amount involved was around £6 billion.

In addition, the company has, unusually, decided that it wants to lower its credit rating. Normally listed companies spend considerable time endeavouring to increase their credit rating as it lowers the interest they pay on loans.

However, Vodafone has decided that giving an additional £3 billion back to investors will only reduce its credit rating to A-, a level it says will make no appreciable difference to the interest rates it can negotiate on borrowings.

Behind these moves, of course, have been growing investor rumbling over the company's lacklustre recent performance.

Essentially, Vodafone will replace every eight ordinary shares you currently hold in the company with seven new shares and 8 B shares.

The seven new ordinary shares will be treated in exactly the same way as your current shareholding and can be held and/or traded as you would have done up till now.

The new B shares are designed as a vehicle to return money to investors and the company has provided three ways for this cash to be realised to "make use of the most efficient tax means to handling the funds".

I don't suppose this is the time to remind Vodafone that you can only have two alternatives but many options. Anyhow, under what the group describes as Alternative 1, the B shares you acquire will automatically be redeemed by the company and the euro equivalent of 15 pence (currently 21.6 cent) paid to you on August 11th.

From a tax perspective, this payment will be treated as a capital gain and, for those with a gain over the annual threshold of €1,270, will trigger a capital gains tax charge of 20 per cent.

It is important to realise that if you do nothing, and assuming the proposal to give money back to shareholders is approved at an extraordinary general meeting on July 27th, you will automatically default to Alternative 1.

Alternative 2 does pretty much the same thing. You will receive a "special dividend" of 15 pence per B share and those shares will then become deferred shares. At that point they are no use to you and will ultimately be cancelled by the company.

The difference between this and Alternative 1 is that dividend income is treated as liable for income tax, not capital gains tax, and will be charged at your higher or marginal rate.

The ludicrously named Alternative 3 will see shareholders having their shares redeemed over four dates in 2007 and 2008. Spreading out the redemption in this way will not get you any more money and is only of relevance to people with very significant shareholding - ie definitely not applicable to almost all the group's Irish shareholders.

So, effectively, you are down to Alternative 1 and 2. Each gives you your 15 cent per B share and each is payable on August 11th. If you pay no income tax, Alternative 2 is for you; if you do pay tax and especially if you do so at the higher rate, you should opt for Alternative 1.

rondjon

Or there's more in todays paper as well, by the same dude, answering the same questions again.

ircoha

rondjon: Much obliged