RBS 2013 Annual Report Download - page 523
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Additional information
521
Major shareholders
In December 2008, The Solicitor for the Affairs of Her Majesty's Treasury
(HM Treasury) acquired 22,854 million ordinary shares representing
57.9% of the company's issued ordinary share capital. During 2009, HM
Treasury acquired a further 16,791 million ordinary shares raising their
holding to 70.3% of the company's issued ordinary share capital.
In December 2009, HM Treasury acquired 51 billion B shares in the
company representing the entire issued B share capital. As a result of the
ordinary share sub-division and consolidation which took place in June
2012, HM Treasury’s holding in the company’s ordinary shares became
3,964 million ordinary shares of £1 each. At 31 December 2013, HM
Treasury’s holding in the company’s ordinary shares was 63.9%.
As far as the company is aware, there have been no significant changes
in the percentage ownership of major shareholders of the company's
ordinary, B and preference shares during the three years ended 26
February 2014. All shareholders within a class of the company's shares
have the same voting rights.
As at 31 December 2013, almost all of the company's US$ denominated
preference shares and American Depository Shares representing
ordinary shares were held by shareholders registered in the US. All other
shares were predominantly held by shareholders registered outside the
US.
Material contracts
The company and its subsidiaries are party to various contracts in the
ordinary course of business. Material contracts include the following:
Consortium and Shareholders Agreement (CSA)
On 28 May 2007, Fortis Bank Nederland, the company, Santander and
RFS Holdings entered into the CSA. Fortis Bank Nederland acceded to
the CSA on 26 July 2007. On 3 October 2008, the Dutch State acquired
Fortis Bank Nederland. On 24 December 2008 the Dutch State acceded
to the CSA following its acquisition of the shares held by Fortis Bank
Nederland in RFS Holdings pursuant to a Deed of Accession entered into
between RFS Holdings, the company, Fortis Bank Nederland, Santander
and the Dutch State. On 1 April 2010 the CSA was restated. It was the
subject of a further amendment on 18 July 2011. On 7 November 2012,
Stichting Administratiekantoor Beheer Financiële Instellingen (the
Foundation) acceded to the CSA (as amended and restated) as a
shareholder following its acquisition of the shares held by the Dutch State
in RFS Holdings pursuant to a Deed of Accession entered into between
RFS Holdings, the company, Santander, the Dutch State and the
Foundation. The Dutch State remains a party to the CSA. The CSA (as
amended and restated) governs the relationships amongst the parties
thereto in relation to the acquisition by RFS Holdings of ABN AMRO (now
RBS Holdings N.V.). The CSA (as amended and restated) details, inter
alia, the equity interests in RFS Holdings, the governance of RFS
Holdings, the arrangements for the transfer of certain ABN AMRO
businesses, assets and liabilities to the Dutch State (previously Fortis
Bank Nederland), the company and Santander, further funding
obligations of the Dutch State, the company and Santander where
funding is required by regulatory authorities in connection with the ABN
AMRO businesses, the allocation of taxes and conduct of tax affairs and
the steps that the Dutch State, the company and Santander expect to
take to enable the company to become the sole shareholder of RFS
Holdings.
B Share Acquisition and Contingent Capital Agreement
On 26 November 2009, the company and HM Treasury entered into the
Acquisition and Contingent Capital Agreement pursuant to which HM
Treasury subscribed for the initial B shares and the Dividend Access
Share (the "Acquisitions") and agreed the terms of HM Treasury's
subscription (the “Contingent Subscription”) for an additional £8 billion in
aggregate in the form of further B shares (the "Contingent B shares"),
which will be issued on the same terms as the initial B shares. The
Acquisitions were subject to the satisfaction of various conditions,
including the company having obtained the approval of its shareholders in
relation to the Acquisitions.
The company and HM Treasury further agreed the terms of the £8 billion
Contingent Subscription of the Contingent B shares in the Acquisition and
Contingent Capital Agreement. For a period of five years from 22
December 2009 or, if earlier, until the occurrence of a termination event
or until the company’s decision (with PRA (formerly FSA) consent) to
terminate such Contingent Subscription (the "Contingent Period"), if the
Core Tier 1 ratio of the company fell below five per cent (and if certain
other conditions were met) HM Treasury would be committed to
subscribe for the Contingent B shares in no fewer than two tranches of £6
billion and £2 billion (or such smaller amounts as the company and HM
Treasury may agree). Any unused portion of the £8 billion could be
subscribed in one or more further tranches.
On December 16, 2013, the company announced that, having received
approval from the PRA, it had terminated the £8 billion Contingent
Subscription. The Group was able to cancel the Contingent Subscription
as a result of the actions announced in the second half of 2013 to further
strengthen its capital position.
On entering into the Contingent Subscription in 2009, the company
recognised the present value of the annual fees payable under the
agreement (£1,208 million) as a liability and debited a contingent capital
reserve within equity. Following termination of the Contingent
Subscription, the outstanding final annual fee of £320 million will no
longer be payable. The balance sheet liability for this fee has been
extinguished with a corresponding entry to equity.
The company gave certain representations and warranties to HM
Treasury on the date of the Acquisition and Contingent Capital
Agreement, on the date the circular was posted to shareholders, on the
first date on which all of the conditions precedent were satisfied, or
waived, and on the date of the Acquisitions.
The company agreed to reimburse HM Treasury for its expenses incurred
in connection with the Acquisitions.
The company agreed to a number of undertakings, including with respect
to: (i) restrictions on the payment of dividends or other distributions on,
and the redemption of, certain securities; (ii) expectations regarding the
repurchase of the B shares by the company; (iii) negotiating in good faith
to maintain the status of the B shares and Dividend Access Share as
Core Tier 1 capital; and (iv) restrictions in relation to the company's share
premium account.