Demerger of Mondi Group in 2007
Shareholders who held Anglo American plc ordinary shares at 12.01am on 2 July 2007 (“Pre-Demerger Ordinary Shares”) will have received Shares, Mondi plc ordinary shares and Mondi Limited ordinary shares as a result of the demerger of the Mondi group, the Mondi plc reduction of capital, the Anglo American share consolidation and the Mondi plc share consolidation (together, the “Mondi Transactions”). The effect of the Mondi Transactions on shareholders' base cost is considered further below (see “Pre-Demerger Ordinary Shares held at 12.01am on 2 July 2007”).
The position of shareholders who acquired their Shares by virtue of holding shares in Minerals and Resources Corporation Limited, Minorco S.A. or Anglo American Corporation of South Africa Limited or by virtue of the De Beers transaction is considered below.
Pre-Demerger Ordinary Shares held at 12.01am on 2 July 2007
As a result of the Mondi Transactions, for every 100 Pre-Demerger Ordinary Shares held as at 12.01am on 2 July 2007, shareholders received (ignoring fractional entitlements) 91 Shares, 25 Mondi plc ordinary shares and 10 Mondi Limited ordinary shares.
The holders of Pre-Demerger Ordinary Shares at 12.01am on 2 July 2007 who, either alone, or together with persons connected with such holder, did not hold more than 5% of such shares, should not have been treated as making a disposal or part disposal of their Pre-Demerger Ordinary Shares for United Kingdom tax purposes as a consequence of the Mondi Transactions. Instead, such shareholders should have been treated as acquiring the Shares, the Mondi plc ordinary shares and the Mondi Limited shares for an aggregate amount equal to the amount for which their Pre-Demerger Ordinary Shares were acquired.
The base cost of a shareholder's holding in Pre-Demerger Ordinary Shares will therefore be apportioned between the Shares, the Mondi plc ordinary shares, and the Mondi Limited ordinary shares. HMRC have confirmed that an acceptable basis for making such apportionment in practice would be by reference to the opening quoted values of the Shares, the Mondi plc ordinary shares and the Mondi Limited ordinary shares on the first day of dealings in such shares.
The opening quoted values of these shares were such that a shareholder's base cost in the Shares would on that basis be approximately 94.25% of its original base cost in the Pre-Demerger Ordinary Shares (the exact percentage will depend on the amount of cash received by a shareholder in respect of fractional entitlements arising on the Mondi plc reduction of capital, the Mondi plc share consolidation and the Anglo American plc share consolidation and the stamp duty paid by Mondi plc in respect of the transfer of the Mondi Ltd ordinary shares pursuant to the Mondi plc reduction of capital).
This summary of the UK tax position on a disposal of Shares does not include any statement with regard to the tax position of shareholders in Mondi plc or Mondi Limited.