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Shareholder information
B shares
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1. What are B shares?
B shares are shares in Rolls-Royce Group plc (the “Company”) with limited voting rights that can, during defined periods, be redeemed for cash or, alternatively, can be converted into ordinary shares. You do not have to pay for B shares they are issued as fully paid bonus shares.
2. What is the Redemption/Conversion statement I have received with my cheque/ordinary certificate?
The Redemption/Conversion statement enclosed with your cheque/ordinary share certificate has been issued in order to help you understand how your entitlement was calculated and if applicable, to assist you in completing your tax return.
3. How do I elect to redeem or convert my existing B shares?
If you have received B shares and now wish to convert or redeem them you need to complete the reverse of your B share certificate and return it to the Registrar. The B shares will be converted or redeemed during the next election period.
4. How do I ensure future B shares issued to me are automatically redeemed or converted?
If you have not completed an evergreen mandate you will be sent one next time the Company announces an issue of B shares. You should ensure that the mandate reaches the Registrars by the date indicated. Once you have completed an evergreen mandate you do not need to make any further elections with regard to future issues of B shares.
5. What will I receive if I redeem my B shares?
You will receive the same amount of cash that you would have received if the Company had declared a normal dividend. If you have elected to redeem your B shares, the cash will be paid on the date specified and in the same manner as dividends have been paid previously.
6. What will I receive if I convert my B shares?
You will receive ordinary shares in the Company to add to your existing shareholding. If you convert your B shares the number of ordinary shares you receive will be the same as those that you would have received had a normal dividend been paid, and you had elected for the scrip alternative. Your ordinary share certificate in respect of the B share conversion will be posted to you, or if you hold your ordinary shares in CREST, your CREST account will be credited, in early January or July depending on whether the B shares are being issued in June or December.
7. What if I make an evergreen election and change my mind in the future?
If you wish to change or cancel your evergreen election at any time you will be able to do so by contacting the Registrars.
8. What if I wish to make a single election for this issue of B shares only (rather than an ‘evergreen election’), or if I wish to make a single election to redeem and/or convert only some of my B shares?
You can request a form from the Registrars to lodge a single or partial election.
9. What happens if my Redemption/Conversion Form is not received by the Registrars by the date specified on the Form?
The Redemption/Conversion Form will not be processed (except at the discretion of the Company) and you will receive B shares. You will be able to redeem/convert your B shares in the future as set out below.
10. Do I have to redeem or convert my B shares at all?
No. You may simply retain your B shares and you will receive a dividend of 75% of the interest rate known as LIBOR on the 0.1 pence of nominal value of each B share. This dividend is payable twice a year. You will be able to redeem or convert your B shares in the future as set out below.
11. If I choose not to redeem or convert all of my B shares now, can I do so in the future?
Yes. The Company expects to set redemption and conversion dates in January and July each year for so long as B shares are in issue. You will have further opportunities to redeem or convert any retained B shares on each such occasion. The share price used in the conversion to convert into ordinary shares may however have changed on such date as it is based on the market price of ordinary shares.
12. Why is the Company issuing B shares?
There are tax and cash flow benefits to the Rolls-Royce Group that will arise from issuing B shares instead of declaring a dividend. These benefits will enhance the Group’s cash flows in future years which in turn will benefit Shareholders. It is expected that while the Company is able to, and there is a benefit in doing so, future payments to Shareholders will be made through the issue of further B shares.
13. Are there any circumstances other than the Company’s expected bi-annual redemption and conversion offers when the Company may choose to redeem the B shares in issue?
Details are set out in the circular to shareholders dated 22 March 2004 in connection with the first issue of B shares.
14. What if I hold American Depositary Receipts (ADRs)?
On behalf of the ADR holders the Bank of New York, as depositary, has advised the Company that it will effectively sell the B shares to be issued to it back to the Company by electing to redeem all these B shares. The Bank of New York will then distribute the proceeds of the redemption to the ADR holders.
15. What if I need further information?
Get more details here (including copies of the circulars to shareholders) of each B share issue to date. If you have any further questions about B shares please telephone the Registrars for assistance between 9.00 and 5.00pm on any business day. Telephone number: 0870 703 0162
16. How is the issue of B shares treated for tax purposes?
Access information on the UK tax treatment of B shares here.
THIS DOCUMENT DOES NOT CONSTITUTE, OR FORM PART OF, AN OFFER, OR ANY SOLICITATION OF AN OFFER, OR INVITATION OR INDUCEMENT TO SUBSCRIBE FOR OR PURCHASE ANY RIGHTS, SHARES OR OTHER SECURITIES. SECURITIES DISCUSSED IN THE THIS DOCUMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT IN TRANSACTIONS THAT ARE EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF SUCH LAWS.
Prices and values of, and income from, shares may go down as well as up. It should be noted that past performance is not a guide for future performance. Persons needing advice should consult an independent adviser.
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