RBS 2008 Annual Report Download - page 244

243RBS Group Annual Report and Accounts 2008
Ordinary shares
In June 2008, the company issued 6,123 million ordinary shares of 25p
each at 200p per share by way of a rights issue. The rights issue was
on the basis of 11 new shares for every 18 shares held on 9 May 2008.
The net proceeds were £12 billion.
In September 2008, the company issued 403 million ordinary shares of
25p each by way of a capitalisation issue. The capitalisation was on the
basis of one new share for every 40 shares held by shareholders on 12
September 2008.
In December 2008, the company issued 22,910 million ordinary shares
of 25p each at 65.5p per share through a placing and open offer. This
placing and open offer, which was fully underwritten by HM Treasury,
was made available to shareholders on 31 October 2008. The net
proceeds were £14.7 billion.
In addition, 13.5 million ordinary shares were issued during the year
ended 31 December 2008 following the exercise of options under the
company’s share schemes.
Total consideration, including the rights issue and placing and open
offer identified above, of £27.3 billion was received on the issue of
ordinary shares for cash.
During the year ended 31 December 2008, options were granted over
187.7 million ordinary shares under the company’s executive and
sharesave schemes. At 31 December 2008, options granted under the
company’s various schemes, exercisable up to 2018 at prices ranging
from 189p to 586p per share, were outstanding in respect of 181.9
million ordinary shares.
On 16 January 2009, further options were granted over 1,176.1 million
ordinary shares under the company’s sharesave scheme.
In addition, options granted under the NatWest executive scheme were
outstanding in respect of 0.8 million ordinary shares exercisable up to
2009 at prices ranging from 248p to 258p per share.
Employee share trusts purchased 54.0 million ordinary shares at a cost
of £63.7 million and awarded 3.3 million ordinary shares on receipt of
£0.9 million on the exercise of awards under employee share schemes.
The employee share trusts incurred costs of £0.3 million in purchasing
the company’s ordinary shares.
Preference shares
In December 2008, the company issued 5 million Series 2 non-
cumulative preference shares of £1 at £1,000 each, the net proceeds
being £5 billion.
On 19 January 2009, the Group announced that it had reached
agreement with HM Treasury and UK Financial Investments to replace
the £5 billion of preference shares it holds with new ordinary shares.
The offer of the new ordinary shares and redemption of the preference
shares are subject to shareholder approval at an Extraordinary General
Meeting.
Under IFRS certain of the Group’s preference shares are classified as
debt and are included in subordinated liabilities on the balance sheet.
Other securities
Certain of the Group’s subordinated securities in the legal form of debt
are classified as equity under IFRS.
These securities entitle the holders to interest which may be deferred at
the sole discretion of the company. Repayment of the securities is at the
sole discretion of the company on giving between 30 and 60 days
notice.
Non-cumulative preference shares
Non-cumulative preference shares entitle the holders thereof (subject to
the terms of issue) to receive periodic non-cumulative cash dividends at
specified fixed rates for each Series payable out of distributable profits
of the company.
The non-cumulative preference shares are redeemable at the option of
the company, in whole or in part from time to time at the rates detailed
on the next page plus dividends otherwise payable for the then current
dividend period accrued to the date of redemption.