THIS DOCUMENT AND THE ACCOMPANYING PROXY FORM ARE IMPORTANT AND REQUIRE
YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are
recommended to seek your own financial advice immediately from an independent financial adviser being,
if you are resident in Ireland, an organisation or firm authorised or exempted under the European
Communities (Markets in Financial Instruments) Regulations (Nos. 1 to 3) 2007 (as amended) of Ireland
or the Investment Intermediaries Act, 1995 (as amended) of Ireland or, if you are resident in the United
Kingdom, an organisation or firm authorised pursuant to the Financial Services and Markets Act, 2000
(as amended) of the United Kingdom or, in the case of Shareholders resident outside Ireland and the
United Kingdom, from another appropriately authorised independent financial adviser.
If you have sold or otherwise transferred all your shares in NTR plc (“NTR” or the “Company”), please send this
document, but not the accompanying personalised documents, at once to the purchaser or transferee, or to the
stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser
or transferee.
PROPOSED CAPITAL REDUCTION,
PROPOSED RETURN OF CAPITAL TO SHAREHOLDERS BY
WAY OF SHARE REDEMPTION
and
NOTICE OF EXTRAORDINARY GENERAL MEETING
This Circular should be read as a whole. Your attention is drawn to the letter from Tom Roche, Chairman
of the Company, which contains a unanimous recommendation from the Board that you vote in favour of
the resolutions to be proposed at the Extraordinary General Meeting (“EGM”).
Notice of the EGM of the Company, to be held at the Westbury Hotel, Grafton Street, Dublin 2 on Tuesday 10th
September 2013 immediately following the Annual General Meeting, which is scheduled to be held at the same
venue on Tuesday 10th September 2013 at 10.00am, is set out at the end of this document.
An individualised Form of Proxy has been sent to each Shareholder. Whether or not Shareholders wish to attend
the EGM, they are asked to complete the Form of Proxy in accordance with the instructions printed on the form
and return it either by post or by hand as soon as possible but in any event so as to be received by the Company’s
Registrars, Capita Registrars, PO Box 7117, Dublin 2 (if by post) or Capita Registrars, 2 Grand Canal
Square, Dublin 2 (if by hand) no later than 10.00am on Sunday 8th September 2013.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Circular are or may constitute forward-looking statements. Such forward
looking statements involve risks, uncertainties and other factors, which may cause the actual results, performance
or achievements of the Company or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward looking statements. Forward-looking
statements are typically identified by the use of forward-looking terminology such as “believes”, “expects”,
“may”, “will”, “would”, “should”, “intends”, “estimates”, “plans”, “assumes” or “anticipates” or the negative of
such words or other variations on them or comparable terminology, or by discussions of strategy which involve
risks and uncertainties. Such risks, uncertainties and other factors include, among others: general economic and
business conditions, changes in technology, government policy, regulation, ability to attract and retain personnel
and natural and manmade disasters. Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from those described in this Circular.
The Company assumes no obligation to update or correct the information contained in this Circular, whether as a
result of new information, future events or otherwise, except to the extent legally required.
The statements contained in this Circular are made as at the date of this document, unless some other time is
specified in relation to them, and publication of this Circular shall not give rise to any implication that there has
been no change in the facts set out in this document since such date. Nothing contained in this Circular shall be
deemed to be a forecast, projection or estimate of the future financial performance of the Company except where
expressly stated.
PRESENTATION OF FINANCIAL INFORMATION
Unless otherwise indicated, all references in this Circular to “€”, “euro” or “cent” are to the lawful currency of
participating member states of the European Union. The financial information presented in this Circular is in euro
millions rounded to one decimal place except where otherwise indicated. In addition, certain percentages
presented in this Circular reflect calculations based upon underlying information prior to rounding and,
accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were
based upon the rounded numbers.
TIME
All references in this Circular to times are to Dublin, Ireland times, unless otherwise stated.
DEFINITIONS
Capitalised terms used in this Circular have the meaning ascribed to them in the section headed “Definitions” in
this Circular.
2
CONTENTS
CONTENTS
PAGE
DEFINITIONS
4
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
6
PART I : LETTER FROM THE CHAIRMAN
7
PART II : QUESTIONS AND ANSWERS
15
PART III : SUMMARY AND EXAMPLES OF TAX TREATMENT
18
NOTICE OF EXTRAORDINARY GENERAL MEETING
27
3
DEFINITIONS
The following definitions apply throughout this Circular and accompanying Form of Proxy, unless the
context otherwise requires:
“Articles”
the articles of association of the Company;
“Authorised Share Capital
Resolution”
the ordinary resolution to approve the increase in the authorised share
capital of the Company by the creation of an additional 108,700,000
Deferred Shares of €0.00125 each;
“Board” or “Directors”
the directors of the Company, whose names are set out on page 7;
“Capital Reduction”
the proposed reduction of the Company’s share premium account;
“Capital Reduction
Resolution”
the special resolution to approve the Capital Reduction to be
proposed at the EGM, the full text of which is set out as Resolution 1
in the Notice of EGM at the end of this Circular;
“Capital Reorganisation”
the proposed reorganisation of the capital of the Company to be
effected by the Share Conversion Resolution;
“Circular”
this document;
“CREST”
the relevant system (as defined in the CREST Regulations) in respect
of which Euroclear UK & Ireland Limited is the Operator (as defined
in the CREST Regulations);
“CREST Regulations”
the Companies Act, 1990 (Uncertificated Securities) Regulations,
1996 as amended enabling title to securities to be evidenced and
transferred in dematerialised form;
the “Company”
NTR plc;
“Deferred Shares”
Deferred Shares of €0.00125 each which will become part of the
authorised share capital of the Company if Resolutions 2 and 3 are
approved at the EGM;
“Court”
the High Court of Ireland;
“Extraordinary General Meeting” the extraordinary general meeting of the Company convened for
or “EGM”
immediately following the Annual General Meeting of the Company
which is convened for 10.00am on Tuesday 10th September 2013 or
any adjournment thereof, as set out in the notice contained in this
Circular;
“Form of Proxy”
the form of proxy accompanying this Circular for use by Shareholders
at the Extraordinary General Meeting;
“Ireland”
Ireland excluding Northern Ireland and the word “Irish” shall be
construed accordingly;
4
“Latest Practicable Date”
14th August 2013, being the latest practicable date prior to the
publication of this Circular;
“NTR share” or
“NTR shares”
Ordinary Shares and Redeemable Ordinary Shares;
“NTR” or
the “Group”
NTR plc and its subsidiary undertakings;
“Ordinary Shares”
Ordinary Shares of €0.00125 each in the capital of the Company:
“Record Date”
6.00pm on 8th September 2013;
“Redeemable Ordinary
Shares”
Ordinary Shares which are converted into Redeemable Ordinary
shares in accordance with Article 3 of the Articles of Association of
the Company as amended by Resolution 2 being passed and the
Capital Reduction becoming effective;
“Redemption”
the redemption by the Company of the Redeemable Ordinary Shares
on the terms and subject to the conditions set out in this document;
“Registrars”
Capita Registrars (Ireland) Limited, 2 Grand Canal Square,
Dublin 2, Ireland and trading as “Capita Registrars”;
“Resolutions”
the resolutions contained in the Notice of EGM at the end of this
Circular;
“Share Conversion
Resolution”
the special resolution to provide for the conversion of Ordinary Shares
into Redeemable Ordinary Shares to be proposed at the EGM, the full
text of which is set out as Resolution 2 in the Notice of EGM at the
end of this Circular;
“Shareholder(s)”
the holder(s) of NTR Ordinary Shares;
“United Kingdom” or
“UK”
the United Kingdom of Great Britain and Northern Ireland;
5
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
15th August 2013
Date of issue of this Circular
10.00 a.m. on 8th September 2013
Latest time and date for receipt
of Forms of Proxy from Shareholders
Annual General Meeting
10.00 a.m. on 10th September 2013
Extraordinary General Meeting
Immediately after AGM on 10th September 2013
Application to the High Court
September/October 2013
Creation of Redeemable Ordinary Shares and
CREST accounts credited
Subsequent to approval by the High Court (if received)
of the Capital Reduction
Redemption of Redeemable Ordinary Shares
and cheques and CREST payments issued
Subsequent to approval by the High Court (if received)
of the Capital Reduction
NOTE:
Some of the times and dates set out above are indicative only and may be adjusted by the Company in
which event details of the new times and dates will be notified by way of an announcement on the
Company’s website www.ntrplc.com.
6
(incorporated and registered in Ireland under the Companies Acts, 1963-2012 with registered number 89782)
PART I – LETTER FROM THE CHAIRMAN
Directors:
Tom Roche (Chairman)
Rosheen McGuckian*
Neil Parkinson*
Brian Kearney
Michael McNicholas
Chris Nash
Donal Tierney
Alan Walsh
Michael Walsh
Registered Office:
Burton Court
Burton Hall Drive
Sandyford
Dublin 18
Ireland
Company Secretary
Caroline Bergin
* Executive director
15th August 2013
Proposed Capital Reduction,
Proposed Return of Capital to Shareholders by way of Share Redemption and
Notice of Extraordinary General Meeting
Dear Shareholder,
1.
Introduction
I am writing to you in connection with certain proposals which are being put forward by your Board in
the context of making a proposed return of capital to Shareholders of up to €100 million.
This Circular sets out a number of steps, including obtaining the approval of Shareholders and the
High Court, which are required to be undertaken prior to returning any capital to Shareholders.
2.
Summary
The Board is proposing to provide for a return of capital to Shareholders of up to €100 million by the
creation and subsequent redemption of Redeemable Ordinary Shares.
To enable such a liquidity event to occur, the Company will firstly request Shareholders to approve the
creation of the necessary distributable reserves by means of a capital reduction. This Capital Reduction
will involve a transfer of up to €180 million of reserves (which are not distributable) from the
Company’s share premium account to its distributable reserves. If approved by Shareholders, the
proposal will subsequently require approval by the Court in order to be effective.
Secondly, Shareholders are being requested to authorise the creation of Redeemable Ordinary Shares
through the conversion of up to 108,700,000 of the existing Ordinary Shares into (newly created)
Redeemable Ordinary Shares. If approved, this conversion will be on a pro rata basis in respect of the
shareholdings of all Shareholders. The exact number of Ordinary Shares to be converted will be
determined by the Board. Subject to the approval of the Capital Reduction by the Court, it is proposed
7
that such conversion will take place as soon as the Court order is filed with the Registrar of
Companies. Immediately following conversion, all of the Redeemable Ordinary Shares will be
redeemed at a price of €0.92 per share. All Shareholders will receive a cash amount which will be pro
rata to their entire shareholding and each Shareholder will retain the same percentage shareholding in
the Company following the Redemption as that held immediately prior to the Redemption.
Arising from this process, it is intended that an amount of up to €100,004,000 (the exact amount to be
determined by the Board) will be returned to Shareholders. It is anticipated that the Redemption will be
implemented in the current calendar year, subject to the approval of the Capital Reduction by the
Court.
The purpose of this Circular is to provide Shareholders with details of the Board’s proposals as
follows:
a) to restructure the Company’s balance sheet by way of a Capital Reduction which, if approved
by Shareholders and the Court, will reduce the Company’s share premium account in order to
increase the Company’s distributable reserves by a corresponding amount;
b) to convert up to 108,700,000 of the Company’s existing Ordinary Shares into Redeemable
Ordinary Shares; and
c) to redeem all of the Redeemable Ordinary Shares at a price of €0.92 per share.
A notice convening the EGM, at which the Capital Reduction Resolution, Share Conversion
Resolution and the Authorised Share Capital Resolution will be proposed, is set out at the end of
this Circular. The EGM will take place immediately following the Company’s Annual General
Meeting to be held at 10.00 a.m. on 10th September 2013. Shareholders wishing to vote on the
proposed Resolutions but who cannot attend the EGM, may appoint a proxy to exercise all or
any of their rights to attend, vote and speak at the EGM by using one of the methods set out in
the notes to the Notice of the EGM.
3.
Context for the Return of Capital to Shareholders
Following the sale of the Group’s US waste business in January 2013, the Board reviewed in detail
various strategic options open to the Company. These options ranged from making a return of capital
to Shareholders, on the one hand, through to undertaking new investment opportunities in the
renewable energy sector, on the other. The resultant strategy that has been adopted by the Board is
based on a rationalisation of the portfolio and a realignment of focus towards smaller scale investment
in the renewables sector, particularly wind energy. The 2013 Annual Report outlines the future strategy
of the Group in more detail.
The Board has concluded that, having regard to the likely financial requirements of the Company’s
future investment strategy and, in conjunction with the Board’s prior commitment given to
Shareholders to implement a liquidity event, it is in the best interests of the Company and its
Shareholders to undertake a partial return of capital to Shareholders.
The Board also believes that it is in the best interests of Shareholders to effect the return of capital to
Shareholders by means of redemption of Ordinary Shares.
4.
The Capital Reduction
Under Irish company law, any dividends on shares or any redemption or repurchase of shares by a
company must be funded from either the distributable reserves of the company or from the proceeds of
a fresh issue of shares for that purpose. These requirements apply whether or not a company has
sufficient cash to pay a dividend or fund a repurchase of shares.
Set out below is a summary of the Company’s balance sheet as at 31st March 2013 which shows that
the Company had a deficit of approximately €31 million of distributable reserves (in the form of
negative retained earnings).
8
Shareholder Funds
As at
31st March 2013
(€’000)
Called-up share capital
Share premium
Other reserves
Retained earnings (distributable reserves)
257
268,697
308
(31,382)
Total equity
237,880
While the sale of the Group’s US waste business resulted in the immediate receipt of $129 million, it
also resulted in a book loss on sale of the asset. As a result of that loss and other losses and
impairments which occurred in the year to 31st March 2013, the Company no longer has distributable
reserves. Therefore, the Company is currently unable to make a distribution to Shareholders or to
undertake any redemption or repurchase of Ordinary Shares.
Section 72 of the Companies Act, 1963 enables a company, subject to Shareholder approval and the
approval of the Court, to create distributable reserves through the cancellation of amounts currently
shown as non-distributable reserves in its balance sheet and, to apply a corresponding amount to its
distributable reserves. Consequently, the Board proposes to create distributable reserves in the
Company’s balance sheet through the Capital Reduction i.e. by means of a reduction in the share
premium account (which is a non-distributable reserve) and a corresponding increase in distributable
reserves.
As noted above, the Company had negative retained earnings in the amount of approximately €31
million as at 31st March 2013.
However, the balance on the Company’s share premium account stood at approximately €269 million,
which amount is attributable to the difference or “premium”, between the nominal value of the
Ordinary Shares issued by the Company and the price at which these shares were issued.
The Directors propose to seek the approval of Shareholders at the EGM for the cancellation of up to
€180 million of the Company’s non-distributable reserves held in the share premium account. If
approved, this will enable up to €180 million to be applied towards distributable reserves.
For illustrative purposes only, based on the balance sheet of the Company as at 31st March 2013, the
effect of the Capital Reduction at the proposed amount of €180 million will be as follows:
Account
As at
31 March 2013
(€’000)
Called-up share capital
Pro forma after the
Capital Reduction
(€’000)
257
257
Share premium
268,697
88,697
Other Reserves
308
308
(31,382)
(31,382)
-
180,000
237,880
237,880
Retained earnings
Distributable Reserves created
Total equity
9
Shareholders should note that the above illustration shows the pro forma effect as at 31st March 2013
of the Capital Reduction on the balance sheet of the Company only, takes no account of any
subsequent earnings and losses, does not reflect the proposed Redemption and will differ from the
consolidated balance sheet of the Group. The Capital Reduction will not affect the reserve balances of
any entity within the Group other than the Company.
There will be no change in the number of Ordinary Shares in issue as a consequence of the Capital
Reduction. The Capital Reduction itself will not involve any distribution or repayment of capital or
share premium by the Company and will not reduce the underlying net assets of the Company. The
Capital Reduction will not give rise to any tax consequence for Shareholders.
5.
The Court Process
A special resolution will be proposed at the EGM to seek the approval of Shareholders for the
cancellation of up to €180 million of non distributable reserves as described above. If approved by the
Shareholders, the Capital Reduction will enable the Company to seek the approval of the Court for the
cancellation of up to €180 million of the Company’s share premium account (or such lesser amount as
may be approved by the Court). The Capital Reduction Resolution also gives the Directors flexibility
in relation to the implementation of the Capital Reduction as it will enable them, in the event of
unforeseen circumstances, either to seek the approval of the Court for the cancellation of such lesser
sum as the Directors may approve, or to determine not to seek the approval of the Court at all in
pursuance of the Capital Reduction Resolution.
If approved by Shareholders, the Directors intend to seek the Court’s confirmation of the Capital
Reduction as soon as practicable following the EGM. In making its decision, the Court will need to be
satisfied that the interests of creditors are not prejudiced by the Capital Reduction. In order for the
Capital Reduction then to become effective, the Court order confirming the cancellation must be filed
with the Registrar of Companies. It should be noted that no guarantee can be given that the Court will
confirm the Capital Reduction.
6.
Conversion of certain Ordinary Shares into Redeemable Ordinary Shares and
Redemption of Redeemable Ordinary Shares
It is proposed that if the Shareholders and the Court approve the Capital Reduction, the Company will
convert up to 108,700,000 of its 205,831,359 Ordinary Shares into Redeemable Ordinary Shares on a
basis proportionate to each Shareholder’s holding of Ordinary Shares in the Company as at the date of
conversion. Any partial Redeemable Ordinary Shares will be rounded down to the nearest whole
share. The Board will determine the number of shares which it deems appropriate to convert into
Redeemable Ordinary Shares at the time of the conversion, bearing in mind the relevant circumstances
of the Company at that time and the outcome of the Company’s application to the Court to approve the
Capital Reduction, including any undertakings required to be given by the Company to the Court. Full
details of the number of shares to be converted and the date of the conversion will be notified by way
of an announcement on the Company’s website.
The conversion cannot take effect until the Court Order is filed with the Registrar of Companies. This
can usually be completed within the week following the Court approval. The Redemption is
conditional on the approval of the Shareholders and the Court. If either of these do not occur, then the
Redemption will not take place.
The reserve created by the Capital Reduction, once approved by Shareholders and the Court, will be
treated as a distributable reserve. Any return of capital to Shareholders will be dependent on the
Company having sufficient distributable reserves at the time, as distributions can only be paid from
distributable reserves by reference to relevant accounts as defined by section 49(2) of the Companies
(Amendment) Act, 1983. Any such distribution will also be dependent on the financial position of the
Company at the time of the distribution and will be subject to Board approval at that time.
The Redemption is also conditional on the Company’s continued compliance with the requirements of
Irish company law and any undertakings given to the Court in connection with the Company’s
10
application to the Court to approve the Capital Reduction, including the requirement that the Directors
continue to be satisfied that the Company can, and will continue to be able to, satisfy any liabilities as
they fall due. If the Directors form the view that it is no longer possible for whatever reason to
proceed with the Redemption, Shareholders will be notified as soon as practicable thereafter.
Immediately following the conversion of Ordinary Shares into Redeemable Ordinary Shares, the
Company will redeem all of the Redeemable Ordinary Shares at a price of €0.92 per share.
Under the terms of the Redemption, the Company will be authorised to redeem up to 108,700,000
Redeemable Ordinary Shares for an aggregate maximum redemption amount of €100,004,000. The
issued ordinary share capital of the Company at the Latest Practicable Date was 205,831,359 Ordinary
Shares. If the Redemption is implemented in full, this will result in the redemption of 108,700,000
Ordinary Shares (52.81% of the current ordinary share capital) and the number of issued Ordinary
Shares of the Company, following cancellation of the Redeemable Ordinary Shares so redeemed, will
be 97,131,359.
The Redeemable Ordinary Shares redeemed pursuant to the Redemption will be redeemed free of
commissions and dealing charges.
Once a Redeemable Ordinary Share has been redeemed, it will be cancelled and will not rank for any
future dividends.
In the case of Shareholders who hold shares in CREST, each of their existing Ordinary Shares will,
subject to Shareholder and Court approval, be converted into 0.52810223 Redeemable Ordinary Shares
(rounded down to the nearest whole number) and 0.47189777 Ordinary Shares (rounded up to the
nearest whole number and issued under a separate ISIN to the original). This is required to facilitate
the partial redemption in CREST. The Redeemable Ordinary Shares will then be redeemed at €0.92
each and the redemption proceeds will be paid through CREST.
In the case of Shareholders who hold Ordinary Shares in certificated form, each of their existing
Ordinary Shares will, subject to Shareholder and Court approval, be converted into 0.52810223
Redeemable Ordinary Shares (rounded down to the nearest whole number) and 0.47189777 Ordinary
Shares (rounded up to the nearest whole number and issued under a separate ISIN to the original).
Their share certificate will cease to be of value and a new share certificate will issue for their new
balance of Ordinary Shares following the Redemption. The Redeemable Shares will be redeemed at
€0.92 each and redemption proceeds will be paid by cheque.
7.
Ability to defer redemption of restricted shares awarded to employees and former
employees under the Company’s employee share schemes
In accordance with the terms of the Company’s employee share schemes, employees and former
employees have entered into commitments which restrict them from disposing of their Ordinary Shares
for periods ranging from one year to five years and one month. Many of these Ordinary Shares will
cease to be restricted in tranches on dates which correspond to an anniversary of their original grant
dates. Under the terms of Resolution 2, to be tabled at the EGM, a pro rata number of these Ordinary
Shares will become Redeemable Ordinary Shares on the same basis as the other Ordinary Shares in the
Company except that the relevant employees or former employees will be permitted to elect to defer
the redemption of their Ordinary Shares until after the restricted period applicable to those shares has
ended. This ability to defer the redemption date of these Ordinary Shares is being proposed as
otherwise the relevant holders of these Ordinary Shares will be subject to a tax liability beyond that
already paid which would not have been payable except for the Redemption (see further detail in
Section 5 of Part III of this circular).
8.
Directors’ Shareholdings
The table below sets out how the Directors' shareholdings will be affected if the Company redeems the
maximum of 108,700,000 Redeemable Ordinary Shares for an aggregate maximum redemption price
of €100,004,000.
11
Resultant Shareholding
following the
implementation of the
Redemption(ii)
Percentage
shareholding
following the
Redemption
€1,588,073
1,542,456
1.6%
0.1%
€87,179
84,675
0.1%
101,715
0.0%
€49,418
48,000
0.0%
Brian Kearney
179,933
0.1%
€87,421
84,910
0.1%
Michael
McNicholas
793,677
0.4%
€385,611
374,535
0.4%
Chris Nash
94,815
0.0%
€46,066
44,743
0.0%
Donal Tierney
276,376
0.1%
€134,278
130,422
0.1%
Alan Walsh
-
0%
-
-
0%
Michael Walsh
2,646,263
1.3%
€1,285,697
1,248,766
1.3%
Director
Shareholding as at
the Latest
Practicable Date
%
Tom Roche
3,268,622
1.6%
Rosheen
McGuckian
179,435
Neil Parkinson
Cash paid as a
result of the
Redemption (i)
(i) Assumes no change in the Directors' respective holdings between the Latest Practicable Date and
the date of Redemption.
(ii) Assumes that the Redemption is implemented in full.
9.
Substantial Shareholdings
In addition to those interests disclosed under Directors’ Interests, as at the Latest Practicable Date, the
Company had received notification of the following interests in its ordinary share capital:
No. of Shares
78,855,413
48,701,410
14,414,242
Dreamport Limited *
One Fifty One Capital Limited **
Pageant Holdings Limited
%
38.31
23.66
7.00
* Dreamport Limited is a wholly owned subsidiary of Woodford Capital Limited. Tom Roche and his
family have voting control over Woodford Capital Limited.
** One Fifty One Capital Limited, of which Alan Walsh is a director, held 23.66% of the share capital
of the Company at 31st March 2013
Apart from these holdings, the Company has not been notified at 1st August 2013 of any interest of 3
per cent or more in its ordinary share capital.
10.
Principal Risks and Uncertainties
The attention of Shareholders is drawn to the principal risks and uncertainties as set out on page 19 in
the Group’s Annual Report for the year ended 31st March 2013. It should also be noted that there is no
guarantee that the Company’s application to the Court to approve the Capital Reduction will be
successful. The Capital Reduction and the Redemption cannot proceed if the Court does not approve
the Capital Reduction.
12
11.
Taxation
A general summary of the taxation consequences of the Redemption for Shareholders is set out in Part
III of this document. The tax treatment for Irish resident or ordinarily resident Shareholders is
particularly complex as it is determined by the capital originally contributed to the Company
(“Original Subscription Price”) for the Ordinary Shares held by each Shareholder rather than the price
paid by the Shareholder on purchase of the shareholding (where the Ordinary Shares were not acquired
by that Shareholder on issue). The Company is engaged in discussions with the Irish Revenue
Commissioners with a view to clarifying and/or simplifying the taxation consequences of the
Redemption. The Company will also send each Shareholder (under separate cover) a schedule
indicating the Original Subscription Price associated with the Ordinary Shares they hold.
Subject to the outcome of the discussions with the Irish Revenue Commissioners, the summary and
worked examples provided in Part III of this Circular outline the tax position under current legislation
and practice. This summary does not purport to be, and is not, a complete description of all of the tax
considerations that may be relevant to the Redemption and does not constitute tax or legal advice.
Shareholders are strongly advised to consult their own professional advisers as to their tax position
before taking any action relating to the Redemption.
12.
EGM
Page 27 of this Circular sets out a notice convening an EGM immediately following the Company’s
AGM to be held at 10.00 a.m. on Tuesday 10th September 2013 at the Westbury Hotel, Grafton Street,
Dublin 2.
At the EGM, the following resolutions will be proposed:
Resolution 1
Resolution 1 will be proposed for the purpose of effecting, subject to confirmation by the Court, the
Capital Reduction. The full text of Resolution 1, which will be proposed as a special resolution, is set
out in the Notice of the EGM, conditional upon the passing of the Capital Reduction Resolution and
confirmation by the Court.
Resolution 1 will be decided on a show of hands, unless a poll is validly demanded in accordance with
the Articles. On a show of hands, each Shareholder present in person and each proxy will have one
vote (but no individual shall have more than one vote) and on a poll each Shareholder present in person
or by proxy will have one vote for each Ordinary Share held. The passing of Resolution 1 requires the
support of not less than 75% of the votes cast (whether in person or by proxy) at the EGM in respect of
Resolution 1.
Resolution 2
Resolution 2 (which is conditional on the passing of Resolution 1 and the Capital Reduction being
approved by the Court) will be proposed as a special resolution. This resolution will authorise the
conversion of up to 108,700,000 of the existing Ordinary Shares into Redeemable Ordinary Shares and
will do this by amending the Memorandum and Articles of Association of the Company so that the
Board can determine the number of Ordinary Shares which are to be converted into Redeemable
Ordinary Shares and redeemed under the Redemption.
Resolution 2 will be decided on a show of hands, unless a poll is validly demanded in accordance with
the Articles. On a show of hands, each Shareholder present in person and each proxy will have one
vote (but no individual shall have more than one vote) and on a poll each Shareholder present in person
or by proxy will have one vote for each Ordinary Share held. The passing of Resolution 2 requires the
support of not less than 75% of the votes cast (whether in person or by proxy) at the EGM in respect of
Resolution 2.
Resolution 3
Resolution 3 (which is conditional on Resolution 2 being passed and becoming effective) will be
proposed as an ordinary resolution. This resolution will authorise an increase in the authorised share
13
capital of the Company by the creation of an additional 108,700,000 Deferred Shares of €0.00125 each
having the rights provided for in the Articles of Association of the Company as amended by Resolution
2. Resolution 3 also provides that if no Deferred Shares come into existence within six months of
Resolution 2 becoming effective, then the authorised share capital of the Company will be reduced to
the original level of €400,000 by the cancellation of the 108,700,000 Deferred Shares of €0.00125.
13.
Action to be taken
You will find enclosed a Form of Proxy for use at the EGM. Whether or not you intend to be present at
the EGM, you are requested to complete the Form of Proxy (in accordance with the instructions
printed thereon) and return it to the Company’s registrars, Capita Registrars, PO Box 7117, Dublin 2,
Ireland (if by post) or Capita Registrars, 2 Grand Canal Square, Dublin 2, Ireland (if by hand) as soon
as possible and in any event so as to be received by no later than 10.00 a.m. on 8th September 2013.
The completion and return of the Form of Proxy will not preclude you from attending the EGM and
voting in person should you wish to do so.
14.
Recommendations
The Directors consider the Capital Reduction to be in the best interests of the Company and the
Shareholders as a whole and, accordingly, unanimously recommend that Shareholders vote in
favour of Resolution 1 to be proposed at the EGM.
The Directors also consider the proposed Redemption to be in the best interests of the Company
and the Shareholders as a whole and, accordingly, unanimously recommend that Shareholders
vote in favour of Resolutions 2 and 3 to be proposed at the EGM.
The Directors intend to vote in favour of the Resolutions in respect of their beneficial interests
amounting, as at 14th August 2013, (being the Latest Practicable Date prior to the publication of
this Circular), to an aggregate of 7,540,836 Ordinary Shares, representing approximately 3.66%,
of the existing issued share capital of the Company.
Yours sincerely
Tom Roche
Chairman
14
PART II: QUESTIONS AND ANSWERS
Questions and answers relating to the Capital Reduction, Share Conversion Resolution and
Share Redemption.
Note: You should read the whole of this document and not rely solely on any single part of this document.
Q. Why is the proposed Capital Reduction necessary?
The Capital Reduction is necessary in order to create distributable reserves. If the Company does not have
sufficient distributable reserves, it is not possible to make payments to its shareholders.
Q. What is the Redemption?
The Redemption is the method by which Shareholders can have part of their Ordinary Shares redeemed for cash
by the Company at the Redemption Price.
Q. Who is eligible to participate in the Redemption?
The Redemption will apply to all Shareholders.
Further details of the Redemption are set out in the Letter from the Chairman in Part I of this document.
Q. Can I choose to retain my ordinary shares rather than participate in the Redemption?
If the resolutions are approved by Shareholders and approval is received from the High Court, the Redemption
will apply to all shares on a pro rata basis. Any Shareholder who objects to having the pro rata portion of his
shareholding converted into Redeemable Ordinary Shares will instead have those shares converted into Deferred
Shares. A Deferred Share shall have no rights other than a right participate in any surplus arising on the winding
up of the Company up to the nominal amount paid up on the Deferred Share.
Q. If I participate in the Redemption, how many of my Ordinary Shares will be redeemed?
The maximum number of your Ordinary Shares that can be redeemed will be equal to 52.810223% of the
Ordinary Shares registered in your name on the redemption date, rounded down to the nearest whole.
Q. Will my shareholding in NTR be diluted?
No. All shareholders will hold the same percentage Ordinary Shares in the Company after the Redemption is
completed as they did beforehand.
Q. How many Ordinary Shares will there be in issue after the Redemption?
Assuming the Redemption is implemented in full, the Redemption will result in the redemption (and subsequent
cancellation) of approximately 108,700,000 Ordinary Shares (representing approximately 52.81% of the existing
issued Ordinary Share Capital as at the Latest Practicable Date). There will therefore be approximately
97,131,359 Ordinary Shares after the completion of the Redemption.
Q. How much cash will I receive and what percentage of the Ordinary Shares will I hold after the
Redemption completes?
You will receive €0.92, less withholding tax if applicable, for each Redeemable Ordinary Share that is redeemed.
Your percentage holding of Ordinary Shares will be the same after the Redemption as beforehand as the
Redemption is being effected on a pro rata basis amongst all Shareholders.
Q. How was the redemption price of €0.92 selected, as it does not correspond to the recent market price
for the Company’s shares?
The redemption price was selected by the Board of Directors at a level that it deemed appropriate and reflects the
Group’s total equity book value as at 31st March 2013. The Directors believe that the grey market price of the
shares does not always reflect the true value of the Company but just the price at which certain shareholders in
the Company are willing to buy and sell their shares.
15
Q. Can I delay having my shares redeemed until a later date?
No. Except for employees and former employees who have clogged their shares and paid over tax in respect of
restricting such shares, shareholders will not be able to determine the timing of the redemption of their shares.
Q. What do I need to do?
You are encouraged to sign and return the Form of Proxy by 10am on 8th September 2013 to vote on the
resolutions necessary to implement the Capital Reduction and the Redemption. You should contact the
Company’s registrar, Capita Registrars, 2 Grand Canal Square, Dublin 2, Ireland, during normal business hours
on telephone number on 01-553 0090 if calling from Ireland or +353 1 553 0090 if calling from outside Ireland
if you have any query in relation to your shareholding in the Company.
Q. When will I know how many of my shares will be redeemed?
You will be contacted after the outcome of the Court hearing to confirm how many shares, if any, will be
redeemed. We would estimate this to be in the coming two to three months.
Q. When will I receive my cash?
Under the expected timetable of events, it is expected that if you hold your Ordinary Shares in certificated form,
a cheque would be dispatched to you for the proceeds of any sale before the end of 2013. It is expected that
CREST account holders would have their CREST accounts credited on the same payment date.
Q. What is the tax treatment for Irish resident Shareholders?
For information about certain Irish taxation consequences of the Redemption, please see Part III of this
document. However, all Shareholders are strongly advised to consult their professional advisors regarding their
own tax position before taking any action relating to the Redemption. See also the worked examples set out in
Section 6 of Part III of this document.
Q. When will I get further information regarding how my Redemption proceeds should be treated for tax
purposes?
You will be sent a personalised schedule within two weeks of this Circular which will include details of the
original subscription price for the Ordinary Shares that you hold as at 15 August 2013. Under current tax
legislation, this is information you will require to determine your tax liability on the Redemption proceeds. This
should be viewed as indicative, as it is only at the date of Redemption that a final schedule can be provided. The
Company is engaged in discussions with the Irish Revenue Commissioners with a view to clarifying and/or
simplifying the taxation consequences of the Redemption. The outcome of these discussions will be
communicated as soon as it is known. You are encouraged to contact your own financial advisor regarding your
tax position before taking any action relating to the Redemption.
Q. Do I have to take Redeemable Ordinary Shares?
If the Resolutions are approved, Section 210(2) of the Companies Act, 1990 provides that any Shareholder may
notify the Company of his unwillingness to have some of his Ordinary Shares converted into Redeemable
Ordinary Shares. However, if a Shareholder is proposing to do this, he should note that Resolution 2 provides
that the percentage of his Ordinary Shares which would have been converted into Redeemable Ordinary Shares
shall instead be converted into Deferred Shares. Resolution 2 will also amend the Articles so as to provide that a
Deferred Share shall have no rights other than a right participate in any surplus arising on the winding up of the
Company up to the nominal amount paid up on the Deferred Share.
Q. What will be the financial position of the Company after the proposed Capital Reduction and
Redemption of the Redeemable Ordinary Shares?
The Company will remain in a position to develop and grow in line with the strategy as defined by the Board of
Directors. Please refer to the 2013 Annual Report which gives guidance on the investment strategy for the
Group.
Q. What happens if the resolutions are not approved at the EGM or if the Court does not approve the
Capital Reduction?
In such circumstances, the planned return of capital will not proceed and shareholders will not receive a return of
funds. If Resolution 1 was passed but not Resolution 2 and the Court approved the Capital Reduction, it would
be possible for the Board of Directors to declare a dividend to shareholders.
Q. Are there any plans to redeem any more shares thereafter?
There are no plans to redeem any more shares after the proposed Redemption.
16
Q. Will I receive a new share certificate?
New share certificates will issue to all certificated shareholders post Redemption to reflect the new balance then
pertaining. If you wish to trade after the Redemption and are awaiting that certificate, your stockbroker can
arrange with the registrar to have the transfer certified against the share register.
Q. What happens if my shares are held in CREST?
If you hold your shares in CREST, each of your existing Ordinary Shares will, subject to the passing of
Resolutions 1 and 2 and court approval, be converted into 0.52810223 Redeemable Ordinary Shares (rounded
down to the nearest whole number) and 0.47189777 Ordinary Shares (rounded up to the nearest whole number
and issued under a separate ISIN to the original). This is required to facilitate the partial redemption in CREST.
The Redeemable Ordinary Shares will then be redeemed at €0.92 each and redemption proceeds will be paid via
CREST.
Q. Who do I contact if I have a query?
If you have a query in respect of your shareholding, please contact the Company Registrars on +353 1 550 0090.
If you have a query in respect of the taxation implications of this proposal, please contact your tax adviser.
Should you wish to be sent a copy of the Company’s Annual Report, you may obtain this from the Company’s
website, www.ntrplc.com or request this by telephoning the Company’s Registrars on +353 1 553 0090 or by
writing to the Company Secretary at the registered office.
17
PART III – SUMMARY AND EXAMPLES OF TAX TREATMENT
The following summary, which is intended as a general guide only, outlines certain aspects of current
taxation legislation and Revenue practice in Ireland regarding the Capital Reduction, Capital
Reorganisation and Share Redemption. This summary is not exhaustive and, in particular, it relates
only to the position of Shareholders who are resident or ordinarily resident in Ireland for tax purposes
(with the exception of Section 4 of this Part III) and that hold their Ordinary Shares as an investment.
The summary may not apply to certain classes of Shareholders including persons who are dealers in
securities, insurance companies and collective investment schemes. The summary deals only with
Irish tax issues and only reflects current tax law and practice as of the date of issue of this Circular.
The tax treatment for Irish resident or ordinarily resident Shareholders in relation to the Redemption is
particularly complex as it is determined by Original Subscription Price for the Ordinary Shares held by
each Shareholder rather than the price paid by the Shareholder on purchase of the shareholding (where
the Ordinary Shares were not acquired by that Shareholder on issue). The Company is engaged in
discussions with the Irish Revenue Commissioners with a view to clarifying and/or simplifying the
taxation consequences of the Redemption. The Company will also send each Shareholder (under
separate cover) a schedule indicating the Original Subscription Price associated with the Ordinary
Shares they hold.
Subject to the outcome of the discussions with the Irish Revenue Commissioners, the summary
provided below and the worked examples set out in Section 6 below outline the tax position under
current legislation and practice.
This document does not purport to be, and is not a complete description of all of the tax considerations
that may be relevant to the decision to dispose of shares under the Redemption and does not constitute
tax or legal advice.
All Shareholders who intend to participate in the Redemption are strongly advised to consult
their professional advisers as to their tax position, based on their own particular circumstances,
before taking any actions relating to the Redemption.
1.
Capital Reduction
As the Capital Reduction itself will not involve any distribution or repayment of capital or share
premium by the Company and will not reduce the underlying net assets of the Company, it will not
give rise to any tax consequences for Shareholders.
2.
Capital Reorganisation
For Irish capital gains tax purposes, the conversion of a portion of each Shareholder’s Ordinary Shares
into Redeemable Ordinary Shares will be regarded as a reorganisation of the Company’s share capital.
Consequently, for capital gains tax purposes, a shareholder will not be treated as making a disposal of
Ordinary Shares which are converted into Redeemable Ordinary Shares.
The Redeemable Ordinary Shares and the Ordinary Shares retained by a Shareholder will be treated as
a single asset and as having been acquired at the same time as the Shareholder’s existing holding of
Ordinary Shares for Irish capital gains tax purposes. Consequently, when the Redeemable Ordinary
Shares are redeemed by the Company, it will be necessary for Shareholders to apportion the original
cost of their Ordinary Shares between their Redeemable Ordinary Shares and their Ordinary Shares.
The apportionment will be based on the respective market values of their Redeemable Ordinary Shares
and their Ordinary Shares on the date that the Redeemable Ordinary Shares are redeemed by the
Company. To the extent that Shareholders acquired their Ordinary Shares in different tranches, a
18
separate apportionment exercise will need to be carried out in respect of each tranche of shares
acquired.
3.
Share Redemption – Implications for Irish Tax Resident Shareholders
Individual Shareholders
To the extent that the redemption proceeds exceed the capital originally contributed to the Company
for the Redeemable Ordinary Shares, the excess will be regarded as an income distribution in the
Shareholder’s hands for Irish tax purposes. For this purpose, capital subscribed means the nominal
amount together with any share premium. The taxable income distribution will be calculated by
reference to the redemption proceeds received less the original capital subscribed for the Ordinary
Shares which are converted into Redeemable Ordinary Shares. In some cases, e.g. where Ordinary
Shares were acquired from a third party, the amount a Shareholder paid to acquire their Ordinary
Shares may not equate to the amount of capital originally subscribed to the Company for those
Ordinary Shares.
Income distributions will be subject to income tax at a Shareholder’s marginal rate (the top rate is
currently 41%) together with PRSI and USC, where applicable. Withholding tax at the standard rate of
income tax (currently 20%) will apply to the income distribution element of the cash payment made by
the Company to Individual Shareholders. The withholding tax deducted will be available for offset
against the individual Shareholder’s income tax liability. To the extent that the tax deducted exceeds an
individual’s income tax liability for the year, the individual will obtain a refund of some or all of the
withholding tax deducted when they file their income tax return for the 2013 tax year.
To the extent that the redemption proceeds received by a Shareholder is less than the capital originally
subscribed for the Ordinary Shares which are converted into Redeemable Ordinary Shares held by that
Shareholder, no portion of the redemption proceeds will be regarded as income distribution in their
hands and therefore no income tax would be due and payable.
Furthermore, Individual Shareholders will also be regarded as having disposed of their Redeemable
Ordinary Shares for Irish capital gains tax purposes when the shares are redeemed by the Company.
The capital gain or capital loss arising on the disposal will be calculated by comparing the redemption
proceeds received (less any amount treated as an income distribution) with a portion of the amount that
a Shareholder paid to acquire their Ordinary Shares (“Base Cost”). Because the Ordinary Shares and
Redeemable Ordinary Shares will be treated as a single asset for capital gains tax purposes (by virtue
of Section 584, Taxes Consolidation Act, 1997), it is not necessary to apply the “First in First Out” rule
to determine the relevant amount of Base Cost which should be deducted. Instead, Section 6 below of
this Part III sets out the appropriate method to determine the relevant Base Cost in these circumstances.
Where a capital loss arises on the disposal, the loss will be available for offset against other chargeable
gains arising to an individual Shareholder. To the extent that a capital gain arises on the disposal,
individuals will be subject to capital gains tax on the gain (the current rate of capital gains tax is 33%).
Each Shareholder will be provided with a schedule setting out the capital originally subscribed for their
Ordinary Shares which are converted into Redeemable Ordinary Shares.
Individual Shareholders should refer to Section 6 below which contains a number of worked examples
of how the redemption is expected to be treated for Irish income tax and capital gains tax purposes.
19
Corporate Shareholders
As outlined above, where the redemption proceeds exceed the Original Subscription Price for those
Ordinary Shares which are converted into Redeemable Ordinary Shares, the excess will be regarded as
an income distribution for Irish tax purposes. If the Shareholder is an Irish resident company, this
distribution will not be subject to Irish corporation tax in the hands of the Shareholder as distributions
between Irish resident companies are exempt from Irish corporation tax. Furthermore, provided an
appropriate declaration is in place, the Company will have no obligation to deduct withholding tax on
the distribution element of the cash payment made by the Company to Irish resident corporate
Shareholders.
A corporate Shareholder which is regarded as a close company for Irish tax purposes may be subject to
a surcharge of 20% on the income distribution to the extent that it is not subsequently distributed by
the corporate Shareholder. The surcharge will not apply if the Company and the corporate Shareholder
make a joint election to treat the income distribution as “non-surchargeable”. The Company is
prepared to make this election if it is asked to do so by any Irish corporate Shareholder.
Corporate Shareholders will be regarded as having disposed of their Redeemable Ordinary Shares for
Irish capital gains tax purposes when the shares are redeemed by the Company. The capital gain or
capital loss arising on the disposal will be calculated by comparing the redemption proceeds received
with a portion of the amount that the Shareholder paid to acquire their Ordinary Shares (see above
discussion for Individual Shareholders which is also relevant for corporate Shareholders). Where a
capital loss arises on the disposal, the loss will be available for offset against other chargeable gains
arising to the corporate Shareholder. To the extent that a capital gain arises on the disposal, the gain
will be taxable at a rate of 33% based on current rates.
Some corporate Shareholders may be exempt from capital gains tax on the disposal of the Redeemable
Ordinary Shares where they hold at least 5% of the ordinary share capital of the Company. There are
various conditions which need to be satisfied in order to obtain this exemption and it will be a matter
for each corporate Shareholder to determine whether or not it meets the particular conditions. For the
purposes of determining entitlement to this relief, the Company is of the opinion that NTR plc and all
of the companies of which it is the parent company (as defined in tax legislation), when taken together,
should be regarded as wholly or mainly carrying on a trade or trades at the date of the Redemption. To
the extent a shareholding by a particular corporate Shareholder would satisfy the conditions for this
exemption, no loss relief will be available where a capital loss arises on the Redemption.
Approved Pension Funds and Approved Charities
Shareholders who are Irish approved pension funds or Irish approved charities are generally exempt
from Irish tax on their income and gains. Consequently, the redemption proceeds should not be subject
to Irish tax in their hands. Provided appropriate declarations are in place, the Company will have no
obligation to deduct withholding tax on any portion of the redemption proceeds paid to Irish approved
pension funds and Irish approved charities.
Other General Taxation Issues for Shareholders
The Company will be obliged to operate dividend withholding tax at 20% on the amount of the
redemption proceeds which will be treated as an income distribution. Certain classes of Shareholders
(pension funds, charities, Irish resident companies) will be entitled to receive the payments gross,
provided appropriate declarations are in place. For those Shareholders who are entitled to a dividend
withholding tax exemption, the relevant declarations should already be in place as the same rules apply
to normal dividend payments made by the Company. That said, Shareholders who are potentially
entitled to exemption may wish to review their position at this time to ensure that the relevant
declarations are in place and up to date.
There is no requirement for Shareholders to obtain a Capital Gains Tax Clearance certificate in
advance of the redemption of their shares, as the shares in the Company do not derive the greater part
of their value from specified assets (as defined in tax legislation).
20
No Irish Stamp Duty will be payable by Shareholders on the creation or on the redemption of the
Redeemable Ordinary Shares by the Company.
4.
Non-Resident Shareholders – Irish Tax Implications
The Company will be obliged to operate dividend withholding tax at 20% on the amount of the
redemption proceeds which will be treated as an income distribution when the exceptions outlined at
Section 3 of this Part III do not apply. Certain classes of non-resident and non-ordinarily resident
Shareholders (i.e. Qualifying Non-Resident Persons as defined in tax legislation) will be entitled to
receive the payments gross, provided appropriate declarations are in place. For those Qualifying NonResident Shareholders who are entitled to a dividend withholding tax exemption, the relevant
declarations should already be in place as the same rules apply to normal dividend payments made by
the Company. That said, Qualifying Non-Resident Shareholders who are potentially entitled to
exemption may wish to review their position at this time to ensure that the relevant declarations are in
place and up to date. Qualifying Non-Resident Shareholders will have no liability to Irish income tax
on the income distribution element of the redemption proceeds.
Where a non-resident and non-ordinarily resident Shareholder is not entitled to an exemption from
dividend withholding tax (e.g. where they are not resident in a country with which Ireland has a
Double Taxation Agreement or the EU), that Shareholder will have no additional Irish income tax
liability on the income distribution element of the redemption proceeds over and above the 20%
dividend withholding tax deducted by the Company.
On the basis that the Redeemable Ordinary Shares should not be regarded as Irish specified assets (as
defined in tax legislation), non-resident and non-ordinarily resident shareholders will not be subject to
Irish capital gains tax on the disposal of their Redeemable Ordinary Shares.
5.
Restricted Shares Held by Employees and Former Employees
The discussion below sets out some additional tax issues for employees (current and former) who
currently hold Ordinary Shares in the Company which are currently subject to a restriction from sale.
The general tax consequences outlined in Section 3 of this Part III for Individual Shareholders would
also apply to these employees.
Income tax charge on breaking restriction on sale
Under the Company’s restricted share schemes, employees are restricted from disposing of shares
awarded to them for periods ranging from one year to five years and one month. From an income tax
perspective, the fact that such a restriction was in place when the shares were acquired by the
employees resulted in an abatement of the income tax charge arising on the shares acquired of between
10% and 60% (the percentage reduction depends on the length of time that shares are restricted from
sale). Where employees obtained an income tax abatement at the time they were awarded shares and
they subsequently sell the shares before the end of the restriction period, the income tax abatement
previously obtained will be adjusted to reflect the actual period of time over which a restriction on sale
was in place with the result that the employees will be liable to pay an additional amount of income tax
(plus applicable PRSI and levies/USC) for the tax year in which they were originally awarded the
shares. As the liability is backdated to the year in which the shares were awarded, interest at a rate of
c.11% per annum may be charged on the late payment of the tax liability.
Given the above, employees may wish to consider availing of the Company’s deferred redemption
offer until such time as they can satisfy the holding period for shares awarded to them under the
restricted share schemes. Where this option is chosen, no additional tax liability will arise on the
original share award, provided the disposal is treated as taking place after the end of the restricted
period.
Base cost for capital gains tax purposes of shares subject to restriction on sale
21
For capital gains tax purposes, an employee’s base cost in shares acquired through the exercise of
share options granted to them will be the market value of the shares at the time the options were
exercised where the shares acquired were already in existence. However, if new shares were issued on
the exercise of the options, the employee’s base cost in those shares will be the sum of (i) the cost (if
any) of the option, (ii) the price paid for the shares on the exercise of the option, and (iii) the amount
charged to income tax on the exercise of the option (including, where applicable, any additional
amount charged to income tax as a result of an early disposal).
In the case of shares acquired otherwise than on exercise of a share option (e.g. share awards), an
employee’s base cost in the shares will be (i) the price (if any) paid for the shares, and (ii) the amount
charged to income tax on the award of the shares (including, where applicable, any additional amount
charged to income tax as a result of an early disposal) where the shares were newly issued. Where the
shares were already in existence, the employee’s base cost in the shares will be the market value of the
shares at the time of the award.
6.
Examples of Irish tax treatment for Individual Shareholders
If you are in doubt as to your tax position or require more detailed information, you should consult
your professional adviser immediately.
The tax treatment for Individual Shareholders who are resident or ordinarily resident in Ireland for tax
purposes will depend on the capital originally contributed to the Company for the Redeemable
Ordinary Shares (i.e. Original Subscription Price used in the examples below). For these purposes,
capital subscribed means the nominal amount together with any share premium. In some cases e.g.
where shares were acquired from a third party, the amount a shareholder paid to acquire their shares
may not equate to the amount of capital originally subscribed for those shares. In order to determine if
you have an Income tax liability, it is the Original Subscription Price which is the key determinant
rather than the purchase cost of the shares. The purchase cost is relevant only in respect of capital
gains tax and is used to determine if you have an allowable capital loss or a taxable capital gain.
In many cases, Individual Shareholders may not or will not be able to determine the Original
Subscription Price for the ordinary shares that they hold. The Company will send each shareholder,
under separate cover, a schedule indicating the Original Subscription Price for the shares comprising
their shareholding in the Company.
The following examples illustrate the Irish tax treatment of the Share Redemption. Where applicable, it
is assumed that individuals are subject to income tax at the marginal rate of 41%, PRSI at a rate of 4%
and USC at a rate of 7%.
As noted in Section 3 of this Part III, for capital gains tax purposes, only a portion of the acquisition
price of a Shareholder’s original Ordinary Shares may be offset against the redemption proceeds
received when determining the capital gain or loss arising on the Redemption. This apportionment is
determined on the basis of the respective market values of the Redeemable Ordinary Shares and the
Ordinary Shares on the date of the Redemption. Please note that for the purposes of these examples,
the market value of the remaining Ordinary Shares is indicative only and is not the view of the Board
or the Company. The market value of the remaining Ordinary Shares will be determined by reference
to the grey market at the date of the Redemption (or such other method as is agreed with Revenue).
The Company will be obliged to operate dividend withholding tax at 20%, where appropriate, on the
amount of the redemption proceeds which will be treated as an income distribution.
22
Example 1:
Redemption Price greater than Original Subscription Price, and Shares held since issue
(i.e. Original Subscription Price is equal to Acquisition Price)
Assume the following facts: An individual holds 1,000 Ordinary Shares for which they subscribed €0.40 per
share on issue. 528 of the individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of
the individual’s Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1
Ordinary Share and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92
respectively.
Income Tax
€
Redemption proceeds
Less original subscription price
Taxable income distribution
486
(211)
275
Income tax, PRSI & USC @ 52%
143
Capital Gains Tax
€
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital loss
486
(275)
(211)
0
CGT due at 33%
Note 1:
0
Base cost of shares allocable (A) is calculated as follows:
A = B * (C/(C+D), where
B = total base cost (i.e. purchase cost) of original shareholding
C = Share Redemption proceeds (In all Examples = €486 (€0.92 * 528))
D = market value of remaining shares held post the Share Redemption (In all Examples =
€434 (€0.92 * 472))
In this example: A = (€0.40 * 1,000) * (€486/(€486 + €434)) = €211
Therefore, in summary, this example illustrates that the individual would pay €143 in Income and related taxes
and zero in Capital Gains Tax.
23
Example 2:
Redemption Price less than Original Subscription Price, and Shares held since issue (i.e.
Original Subscription Price is equal to Acquisition Price)
Assume the following facts: An individual holds 1,000 Ordinary Shares for which they subscribed €1.40 per
share on issue. 528 of the individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of
the individual’s Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1
Ordinary Share and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92
respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution (Note 2)
€
486
(739)
0
Income tax, PRSI & USC @ 52%
0
Capital Gains Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital loss
CGT due at 33%
Note 1:
Note 2:
€
486
0
(739)
(253)
0
Base cost of shares allocable - see definition in Example 1
In this example: (€1.40 * 1,000) * (€486/(€486 + €434)) = €739)
No income distribution as the capital originally subscribed exceeds the redemption proceeds
Example 3:
Redemption Price less than Original Subscription Price, and Original Subscription Price
less than Acquisition Price
Assume the following facts: An individual holds 1,000 Ordinary Shares which were purchased at €5.20 per share
on the grey market. The original subscription price for the shares was €3.25 per share on issue. 528 of the
individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of the individual’s
Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1 Ordinary Share
and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92 respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution (Note 2)
€
486
(1,716)
0
Income tax, PRSI & USC @ 52%
0
Capital Gains Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital loss
CGT due at 33%
Note 1:
Note 2:
0
Base cost of shares allocable - see definition in Example 1
In this example: A = (€5.20 * 1,000) * (€486/(€486 + €434)) = €2,746
No income distribution as the capital originally subscribed exceeds the redemption proceeds
24
€
486
0
(2,746)
(2,260)
Example 4:
Redemption Price greater than Original Subscription Price, and Original Subscription
Price less than Acquisition Price
Assume the following facts: An individual holds 1,000 Ordinary Shares which were purchased at €5.20 per share
on the grey market. The original subscription price for the shares was €0.75 per share on issue. 528 of the
individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of the individual’s
Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1 Ordinary Share
and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92 respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution
€
486
(396)
90
Income tax, PRSI & USC @ 52%
47
Capital Gains Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital loss
€
486
(90)
(2,746)
(2,350)
CGT due at 33%
Note 1:
0
Base cost of shares allocable - see definition in Example 1
In this example: A = (€5.20 * 1,000) * (€486/(€486 + €434)) = €2,746
Example 5:
Redemption Price less than Original Subscription Price, and Original Subscription Price
greater than Acquisition Price
Assume the following facts: An individual holds 1,000 Ordinary Shares which were purchased at €1.60 per share
on the grey market. The original subscription price for the shares was €2.00 per share on issue. 528 of the
individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of the individual’s
Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1 Ordinary Share
and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92 respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution (Note 2)
€
486
(1,056)
0
Income tax, PRSI & USC @ 52%
0
Capital Gains Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital loss
€
486
0
(845)
(359)
CGT due at 33%
Note 1:
Note 2:
0
Base cost of shares allocable - see definition in Example 1
In this example: A = (€1.60 * 1,000) * (€486/(€486 + €434)) = €845
No income distribution as the capital originally subscribed exceeds the redemption proceeds
25
Example 6:
Redemption Price less than Original Subscription Price, and Original Subscription Price
greater than Acquisition Price
Assume the following facts: An individual holds 1,000 Ordinary Shares which were purchased at €0.50 per share
on the grey market. The original subscription price for the shares was €2.00 per share on issue. 528 of the
individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of the individual’s
Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1 Ordinary Share
and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92 respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution (Note 2)
€
486
(1,056)
0
Income tax, PRSI & USC @ 52%
0
Capital Gains Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital gain
CGT due at 33%
Note 1:
Note 2:
€
486
0
(264)
222
73
Base cost of shares allocable - see definition in Example 1
In this example: A = (€0.50 * 1,000) * (€486/(€486 + €434)) = €264
No income distribution as the capital originally subscribed exceeds the redemption proceeds
Example 7:
Redemption Price greater than Original Subscription Price, and Original Subscription
Price greater than Acquisition Price
Assume the following facts: An individual holds 1,000 Ordinary Shares which were purchased at €0.15 per share
on the grey market. The original subscription price for the shares was €0.50 per share on issue. 528 of the
individual’s Ordinary Shares are converted into Redeemable Ordinary Shares. All of the individual’s
Redeemable Ordinary Shares are redeemed at a price of €0.92 per share. The market value of 1 Ordinary Share
and 1 Redeemable Ordinary Share on the date of the redemption are €0.92 and €0.92 respectively.
Income Tax
Redemption proceeds
Less original subscription price
Taxable income distribution
€
486
(264)
222
Income tax, PRSI & USC @ 52%
115
Income Tax
Redemption proceeds
Less amount subject to income tax
Less base cost allocated to the redeemable shares (Note 1)
Capital gain
CGT due at 33%
Note 1:
61
Base cost of shares allocable - see definition in Example 1
In this example: A = (€0.15 * 1,000) * (€486/(€486 + €434)) = €79
26
€
486
(222)
(79)
185
NTR PLC
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting (“EGM”) of NTR plc will be
held immediately following the Company’s Annual General Meeting to be held at 10.00 a.m. on
Tuesday 10th September 2013 at the Westbury Hotel, Grafton Street, Dublin 2, Ireland for the purpose
of considering and, if thought fit, passing the following resolutions:
AS A SPECIAL RESOLUTION (Resolution 1)
That the Directors be and are hereby authorised, on behalf of the Company, to proceed to seek the
approval of the High Court for a reduction of the Company’s capital pursuant to section 73 of the
Companies Act, 1963 by reducing the Company’s share premium account by an amount of up to €180
million as the Directors may approve in their absolute discretion, or by such lesser amount as the High
Court may order for the purposes of section 74 of the Companies Act, 1963 (the “Capital Reduction”)
and to make such court applications, petitions, affidavits or appearances as may be necessary or
desirable to apply for the Capital Reduction to be authorised, approved, adopted and implemented
pursuant to section 72(3) of the Companies Act, 1963 and that the Directors be, and each of them
hereby is, authorised to take such actions and/or cause to be prepared, executed and delivered, such
documents (including but not limited to petitions, affidavits, statutory declarations and notices of
motion) as are necessary to achieve this, all in such form and on such terms and conditions as any
Director shall approve, his execution and delivery thereof being conclusive evidence of his approval
and authority hereunder. The Directors be and they are hereby also authorised to determine not to
proceed to seek the approval of the High Court at all.
AS A SPECIAL RESOLUTION (Resolution 2)
That, subject to the passing of Resolution 1in the notice of this meeting and the Company receiving
authority to undergo the Capital Reduction from the High Court, it is hereby resolved that paragraphs
(a) to (c) below shall take effect with effect from the filing of the Court order confirming the Capital
Reduction with the Registrar of Companies:
“(a)
That the memorandum of association of the Company is hereby amended by deleting from
clause 4 thereof the first sentence thereof and substituting therefor the following sentence:
“The share capital of the Company is €535,875 divided into 211,300,000 Ordinary Shares of
€0.00125 each, 108,700,000 Redeemable Ordinary Shares of €0.00125 each and 108,700,000
Deferred Shares of €0.00125 each, with power to increase or decrease the share capital.”; and
(b)
that the articles of association of the Company are hereby amended by deleting article 3
thereof and substituting therefor the following new article 3:
“3
(a)
The share capital of the Company is €535,875 divided into 211,300,000
Ordinary Shares of €0.00125 each, 108,700,000 Redeemable Ordinary Shares of €0.00125
each and 108,700,000 Deferred Shares of €0.00125 each, with power to increase or decrease
the share capital.
(b)
The Ordinary Shares and the Redeemable Ordinary Shares shall rank, save as
specifically hereinafter provided, pari passu in all respects and any reference in these articles
to "Ordinary Shares" shall be deemed, save where the context clearly requires otherwise, to
include reference to the Redeemable Ordinary Shares. A Deferred Share shall have no rights
other than a right to participate in any surplus arising on the winding up of the Company up to
the nominal amount paid up on the Deferred Share.
27
(c)
Subject to a member notifying the Company before the conversion of his Ordinary
Shares of his unwillingness to have some of his Ordinary Shares converted into Redeemable
Ordinary Shares in accordance with the provisions of this Article, the directors (or any director
authorised by the directors for this purpose) may resolve to convert up to 108,700,000 of the
existing Ordinary Shares into Redeemable Ordinary Shares provided that such conversion will
be done as near as possible on a pro rata basis for all Shareholders and the exact number to be
converted will be determined by the Board of Directors at its discretion rounded to the nearest
whole number.
(d)
If a member notifies the Company in accordance with section 210(2) of the
Companies Act, 1990 of his unwillingness to have some of his Ordinary Shares converted into
Redeemable Ordinary Shares, that percentage of his Ordinary Shares which would have been
converted into Redeemable Ordinary Shares shall instead be converted into Deferred Shares.
(e)
The directors shall not convert Ordinary Shares into Redeemable Ordinary Shares
pursuant to this Article and shall not redeem such Redeemable Ordinary Shares unless the
redemption is in accordance with the provisions of this Article and with such of the provisions
of the Companies Acts 1963 to 2012 as shall apply to any such conversion and/or redemption.
(f)
Subject to the preceding provisions of this Article, the directors may resolve that the
Company will redeem all of the Redeemable Ordinary Shares in accordance with the
provisions of this Article (the shares which are to be redeemed being hereinafter referred to in
this Article as the Relevant Shares) at a price of €0.92 for each Relevant Share (the
"Redemption Price") on the basis that the Redemption Price shall be paid at the same time
PROVIDED HOWEVER that where, in the determination of the directors, Redeemable
Ordinary Shares have been acquired by any member pursuant to an employee share scheme
approved by the shareholders of the Company and are subject to a restriction on their disposal,
the directors may, with the agreement of such member, resolve that the Company will not
redeem such Redeemable Ordinary Shares until such shares cease to be subject to such
restriction.
(g)
The directors may do all acts and things considered necessary or expedient to give
effect to any conversion and redemption pursuant to this Article with full power to the
directors to make such provisions as they think fit where shares would otherwise have been
converted and/or redeemed in fractions (including provisions whereby, in whole or in part,
fractional entitlements are disregarded). The directors may authorise any person to enter an
agreement on behalf of all the holders of Relevant Shares with the Company providing for
such redemption and matters incidental thereto and any agreement made under such authority
shall be effective and binding on all concerned.
(h)
The Company shall not be required to issue any share certificates in respect of any
shares which are converted into Redeemable Ordinary Shares except where the directors
determine otherwise at their discretion.
(i)
The directors shall procure that there are delivered to the Registrar of Companies the
appropriate returns in respect of the conversion of the Ordinary Shares and the redemption of
the Redeemable Ordinary Shares and that an appropriate sum is transferred to a Capital
Redemption Reserve Fund in the accounts of the Company and the directors shall comply
otherwise with such of the provisions of the Companies Acts 1963 to 2012 as shall be
applicable.” ; and
(c)
That subject to the provisions of the Companies Acts, 1963 to 2012, such part of the issued
share capital of the Company shall be converted into Redeemable Ordinary Shares of €0.00125 each as
the directors shall resolve in accordance with Article 3 of the articles of association of the Company as
amended by this resolution and such Redeemable Ordinary Shares shall confer on the holder thereof
the rights and obligations specified in the articles of association of the Company as amended on
today’s date and as the same may be amended from time to time and be for the time being in force.”
28
AS AN ORDINARY RESOLUTION (Resolution 3)
That, subject to Resolution 2 in the notice of this meeting being passed and becoming effective, the
authorised share capital of the Company be and is hereby increased from €400,000 to €535,875 by the
creation of an additional 108,700,000 Deferred Shares of €0.00125 each having the rights provided for
in the Articles of Association of the Company as amended by Resolution 2 PROVIDED HOWEVER
that if no Deferred Shares come into existence within six months of Resolution 2 becoming effective
then the authorised share capital of the Company be and is hereby reduced to €400,000 by the
cancellation of the 108,700,000 Deferred Shares of €0.00125.
By Order of the Board
Caroline Bergin
Company Secretary
Registered Office: Burton Court, Burton Hall Drive, Sandyford, Dublin 18.
Date: 15th August 2013
29
NOTES:
1. Conditions for participating in the meeting
Every member, irrespective of how many NTR shares they hold, has the right to attend, speak, and vote at the
EGM. Completion of a form of proxy will not affect your right to attend, speak and vote at the EGM in person.
The right to participate in the EGM is subject to the registration of the shares on the Record Date (defined at note
2 below).
2. Record Date for EGM
The Company, pursuant to Regulation 14 of the Companies Act, 1990 (Uncertificated Securities) Regulations
1996, specifies that only those Shareholders registered in the register of members of the Company as at 6.00pm
on 8th September 2013 (“Record Date”) (or in the case of an adjournment as at 6.00pm on the day which is two
days before the time appointed for the holding of the adjourned meeting) shall be entitled to attend and vote at
the meeting in respect of the number of shares registered in their names at the time. Changes in the register after
that time will be disregarded in determining the right of any person to attend and/or vote at the meeting.
3. Appointment of proxy
If you cannot attend the EGM in person, you may appoint a proxy (or proxies) to attend, speak, ask questions and
vote on your behalf. For this purpose, an individualised Form of Proxy has been sent to each Shareholder. A
member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend,
speak and vote on his/her behalf. A proxy need not be a member of the Company. You may appoint the
Chairman of the Company or another individual as your proxy. You may appoint a proxy by completing the
Form of Proxy, making sure to sign and date the form at the bottom and return it in the pre-paid envelope
provided. Forms of Proxy, to be valid, must reach the Registrars to the Company; Capita Registrars, PO Box
7117, Dublin 2, Ireland (if by post) or Capita Registrars, 2 Grand Canal Square, Dublin 2, Ireland (if by hand) not
later than 48 hours before the time appointed for the holding of the Meeting. If you are appointing someone
other than the Chairman as your proxy, then you must fill in the details of your representative at the meeting in
the box located underneath the wording “I/We hereby appoint the Chairman of the EGM OR the following
person” on the Form of Proxy.
If you appoint the Chairman or another person as a proxy to vote on your behalf, please make sure to indicate
how you wish your votes to be cast by ticking the relevant boxes on the Form of Proxy. Completing and
returning a form of proxy will not preclude you from attending and voting at the meeting should you so wish.
4. How to exercise your voting rights
As a Shareholder, you have several ways to exercise your right to vote:
1) By attending the EGM in person;
2) By appointing the Chairman or another person as a proxy to vote on your behalf;
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be
accepted to the exclusion of the votes of the other registered holder(s) and, for this purpose, seniority will be
determined by the order in which the names stand in the register of members.
5. How to request/ inspect documentation relating to the meeting
The annual financial statements are contained in the Company’s Annual Report which was approved on 1st
August 2013 and is available on the Company’s website, www.ntrplc.com. Should you wish to be sent a copy of
the Company’s Annual Report, you may request this by telephoning the Company’s Registrars on +353 1 553
0090 or by writing to the Company Secretary at Burton Court, Burton Hall Drive, Sandyford, Dublin 18.
30