Shareholder centre

353,646,000 Ordinary Shares of £1 each were offered in Severn Trent PLC (a Water Holding Company) at a price of 240p. The deadline for applications was 6 December 1989 and 100p of the offer price was payable on application. A second instalment of 70p was payable on 31 July 1990 and the final instalment was payable 30 July 1991. Severn Trent PLC was listed on the London Stock Exchange with effect from 12 December 1989.

A number of special incentives were offered at the time of the sale.  Eligible customers were able to opt for one of the following:

• Customer Discount

• Customer Share Bonus

• Non-Customer Share Bonus

Special offers were also available to employees and pensioners:

• Employee Discount and Priority Offer

• Pensioner Priority Offer

   

In respect of each Severn Trent PLC share purchased, a discount of 10p on the second instalment was offered, if the share was held continuously until 28 June 1990.  A further discount of 10p per share on the final instalment was available if the share was held continuously until 27 June 1991. The maximum discount available was £300.

For every ten shares purchased in Severn Trent PLC and which continued to be held up to and including 31 December 1992, one additional share was awarded. The maximum number of additional shares available per application was 300. Fractions of shares were not awarded.

For every twenty Severn Trent PLC shares which continued to be held up to and including 31 December 1992, one additional share was awarded. The maximum number of additional shares available per applicant was 150. Fractions of shares were not awarded. 

At the Annual General Meeting on 1 August 2000, shareholders resolved to cancel the B shares and, following an application to the Courts, the capital of the Company was reduced and the B shares were cancelled with effect from 1 November 2000.

For the purpose of Capital Gains Tax calculations, the market values of the new Ordinary shares of 655 / 19 pence each and the B shares of 38 pence each on 11 August 1997 were 820 pence and 36.25 pence respectively.  The base cost of the old Severn Trent shares held immediately prior to the Share Capital Reorganisation was apportioned between the new Ordinary shares of 655 / 19 pence each and the B shares of 38 pence each, in the following ratio –

Ordinary shares of 655 / 19 pence each - 95.55%
B shares of 38 pence each - 4.45%

Demerger of Biffa Plc, Return of Capital by payment of a Special Dividend and Consolidation of Severn Trent Plc Shares.

On 9 October 2006 the demerger of Biffa Plc was completed and, for each existing Severn Trent Plc share of 65^5/19 pence each held at the Record Time of 6.00pm on Friday 6 October 2006, shareholders in the Company received:

• one Biffa Plc share of ten pence each;  and
• a Special Dividend of 165 pence.

At the same time as the demerger, every three Severn Trent Plc shares of 65^5/19 pence each were consolidated into two new Severn Trent Plc shares of 97^17/19 pence each.

The Special Dividend was paid on 20 October 2006.  At the same time, share certificates for the new Severn Trent Plc shares and the Biffa Plc shares were sent to shareholders.

Capital Gains Treatment

For the purpose of Capital Gains Tax (‘CGT’) calculations, the base cost of the old Severn Trent Plc shares (“Severn Trent shares”) held immediately prior to the demerger and share consolidation must be apportioned between the new Severn Trent shares and the Biffa shares received in the following ratio:  new Severn Trent shares 78.7%, Biffa shares 21.3%.  This is based on:

• the dividend ratio of one Biffa share for each old Severn Trent share held;
• the consolidation of the Severn Trent shares in the ratio of two new Severn Trent shares for every three old Severn Trent shares held;
• a fractional entitlement based on £14.34, by way of cash, for any fraction of a new Severn Trent share as a result of the consolidation; and
• the respective market values on 9 October 2006, determined according to normal CGT rules, of 1440.00 pence for new Severn Trent shares and 259.88 pence for Biffa shares.

For example if 1,000 old Severn Trent shares were held immediately before the demerger and share consolidation, with a previous base cost of £5.00 per share (a total base cost of £5,000) the base cost for CGT purposes of the 666 new Severn Trent shares held after the demerger and share consolidation would be £3,935 (less the fractional entitlement payment) and the base cost of the 1,000 Biffa shares received in the demerger would be £1,065.  For CGT purposes the base cost of the new Severn Trent shares is adjusted to reflect any fractional payments received.

Please note that if the old Severn Trent shares were acquired in a number of transactions at different prices or if other Biffa shares are owned, the determination of the base cost of the shares sold will also depend on the CGT matching rules.  If you are in any doubt about your taxation position you should obtain professional advice.