Ensco has agreed to terminate its American Depositary Share (ADS) facility and convert its outstanding ADSs into Class A Ordinary Shares. Recent regulatory developments involving shares of companies domiciled in the U.K. have facilitated the change. The conversion will allow Ensco shareholders to directly own and trade Class A Ordinary Shares on the NYSE, which is a requirement to be eligible in the S&P 500 Index.
Ensco previously was included in the S&P 500 Index until December 2009 when it changed its corporate domicile to the U.K. from Delaware. Regulations for U.K. companies at the time required Ensco’s Class A Ordinary Shares to be traded in ADS form and, since eligibility rules for the S&P 500 Index exclude companies listed in ADS form, Ensco was removed from the index. The Company’s decision to convert to a Class A Ordinary Share listing will restore Ensco’s eligibility for the S&P 500 Index, although there is no assurance that Ensco will be added to the index in the future.
Ensco will continue to trade under the symbol “ESV” on the New York Stock Exchange.
The conversion is a one-for-one exchange – one ADS is converted to one Share at your same cost basis.
Class A Ordinary Shares carry the right to receive dividends or other distributions paid by Ensco and shareholders have the right to receive notice of, and to attend and vote at all general meetings of Ensco.
If you previously signed up to have your dividends automatically deposited into your bank account, your dividends will continue to be processed in the same manner.
You many sign up online at www.computershare.com/investor or by contacting Computershare at (888) 926-3470 or if outside the US at (732) 491-0636.
U.S. Tax Considerations: For U.S. federal income tax purposes, the Conversion will not be treated as a sale, exchange or other taxable event. Therefore, for U.S. federal income tax purposes, U.S. holders and non-U.S. holders of ADSs will not recognize gain or loss with respect to the termination of the ADS facility and the Conversion of ADSs to Class A Ordinary Shares.
UK Tax Considerations: Based on most recently published HM Revenue & Customs ("HMRC") practice, it is not expected that the termination of the ADS facility and the conversion of ADSs to Class A Ordinary Shares should give rise to a chargeable gain or allowable loss for the purposes of U.K. capital gains tax and corporation tax on chargeable gains (together "CGT") if you are a holder of ADSs who is a resident of the U.K. for such purposes or a non-U.K. resident otherwise subject to CGT in respect of your ADSs.
If you are a tax resident of any country other than the U.S. or the U.K. or if you have questions regarding the state or local tax consequences, you should confirm the tax treatment of the Conversion with a personal tax advisor.
For purposes of U.S. federal income tax, U.S. holders and non-U.S. holders of ADSs will not recognize gain or loss with respect to the termination of the ADS facility and the Conversion of ADSs to Class A Ordinary Shares.
For holders of ADSs who are residents of the U.K. for CGT purposes or non-U.K. residents otherwise subject to CGT in respect of ADSs, it is not expected, based on the HMRC practice referred to above, that you will be subject to a further CGT charge on the termination of the ADS facility and conversion of your ADSs to Class A Ordinary Shares. If you have any questions about your personal U.K. tax position in respect to the termination of the ADS Facility and conversion of your ADSs to Class A Ordinary Shares, you are strongly advised to consult with your own tax advisor.
You can sell your ADSs up to the Conversion date expected to be on 22 May 2012. As of the Conversion date, Ensco shares will begin trading as a Class A Ordinary Shares. There is no sales facility for ADSs associated with the conversion.
Please contact our Transfer Agent: Computershare P. O. Box 43001 Providence, RI 02940-3001
If sending correspondence by overnight mail: 250 Royall Street Canton, MA 02021 U.S. Toll-free (888) 926-3470 or (732) 491-0636 Representatives are available from 8:30 a.m. to 6:00 p.m. EST, Monday through Friday. Internet: www.computershare.com/investor.
Other questions can be addressed to: Ensco Investor Relations Department 5847 San Felipe Street Suite 3300 Houston, TX 77057-3008 Phone: (713) 789-1400
Shareholders who hold their ADSs in a bank or brokerage account will not be required to take any action. Your brokerage firm will automatically convert the ADSs into Shares.
Our records indicate you hold Ensco plc American Depositary Shares (“ADSs”) in uncertificated (Direct Registration) form or American Depositary Receipts (“Certificates”) evidencing certificated ADSs that need to be exchanged for Ensco plc Class A Ordinary Shares (“Shares”) in connection with the termination of the Ensco plc ADR program expected to be effective 22 May 2012. In order to receive your Ensco plc Class A Ordinary Shares and any future dividend or distributions the Board of Directors may declare, you MUST return this Exchange Form and the Certificate, if applicable.
You will not receive your dividend payments until after your ADSs have been exchanged for shares. Any dividends that have been paid prior to you exchanging your ADSs will be accrued and paid at the time of exchange of your shares. You will not be entitled to vote your ADSs at the Ensco Annual General Meeting of Shareholders. You may be subject to abandoned property laws after a period of time determined by your place of residence.
You will become a “street name” holder, which means you will continue to be entitled to receive all dividends that may be declared from time to time, and your broker or bank will provide access to all shareholder communications and follow your voting instructions with respect to all matters submitted to a vote of shareholders.
As the laws of every country may be different with respect to offering custodial services, Computershare has determined to only offer custodial services to U.S. residents at this time.
Please call Computershare’s customer service inside the US at 1-888-926-3471 or outside the U.S. at 1-732-491-0636 to find out the cost and process for requesting a replacement. The certificate must be replaced prior to transferring the shares.
We recommend using a tracking service to verify receipt of mailed certificates. Ensco and Computershare are not responsible for lost/undelivered mail.
By Mail: Computershare Corporate Actions P.O. Box 43014 Providence, RI 02940-3014
By Overnight Delivery: Computershare Corporate Actions 250 Royall Street Canton, MA 02021
Please call Computershare’s customer service inside the U.S. at 1-888-926-3471 or outside the U.S. at 1-732-491-0636. The representative will walk you through the steps required of you and your broker for receiving a certificate. You should note that, if you elect to receive your Class A Ordinary Shares in certificated form, future transfers of your shares will generally be subject to Stamp Duty charge at a rate of 0.5 % (rounded up to the nearest £5) of the consideration paid for the transfer or 1.5% (rounded up to the nearest £5) of the value of the shares at such time for deposits into a brokerage account.
Yes. Non-business entity accounts can gain access through “Investor Centre” at www.computershare.com/investor. Computershare’s Investor Centre is a free online service that provides you with a wide variety of self-service tools to help track and manage your personal holdings in the companies it services. Investor Centre allows you to manage your holdings in several different companies simultaneously. Please note that Computershare does not permit online access to accounts registered as a business such as corporations, banks, associations, some trusts, nominees, etc.
You will need to complete a Share Transfer Request Form. Please contact Computershare to request the necessary form. Please read the instructions for information on the different account types that are available to you for the new account, e.g. an individual account listing just you as the holder. Also, the transfer may be subject to Stamp Duty. Please refer to “What are the exemptions from Stamp Duty.”
You will need to contact Computershare for the necessary form for transferring certificated shares to your stockbroker. In addition, you will need to contact your stockbroker to initiate and coordinate such a transfer. Please note that the transfer of shares to a brokerage account will be subject to payment of U.K. Stamp Duty. See “What is Stamp Duty?” and “How is Stamp Duty calculated?” for further information.
Computershare does not charge a fee to transfer stock; however, you may incur fees from other institutions. For example, you may be charged a fee by the institution that provides the Medallion Signature Guarantee. Also, as Ensco plc is a company incorporated in England and Wales, some types of transfer of the company shares are liable to UK Stamp Duty (for transfers outside DTC or for transfers from outside DTC into a brokerage account), levied by HMRC.
In the United States, a medallion signature guarantee is a special signature guarantee for the transfer of securities. It is a guarantee by the transferring financial institution that the signature is genuine and the financial institution accepts liability for any forgery. Medallion signature guarantees protect security holders by preventing unauthorized transfers and possible investor losses. Medallion signature guarantees may be obtained from most banks and brokerage firms.
HMRC is Her Majesty’s Revenue & Customs, the non-ministerial department of the U.K. Government responsible for the collection and administration of taxes in the U.K.
Stamp Duty is a tax applied by the U.K. authority, HMRC, to share transfer forms. If Stamp Duty is payable on a transfer form, then the transfer cannot be registered by the company’s registrar or transfer agent unless the Stamp Duty is paid. Stamp Duty is usually payable by the transferee, i.e. the recipient of shares from a transfer. You can find out more information about U.K. Stamp Duty from the Stamp Office Helpline +44845 603 0135 or http://www.hmrc.gov.uk/sd/shares/sharetransfers.htm.
Unless a transfer is exempt, Stamp Duty currently is calculated at the rate of 0.5% of the consideration money (in pounds sterling) paid for the transfer, rounded up to the nearest £5. If your certificate is being deposited into a brokerage account the Stamp Duty currently is calculated at the rate of 1.5% of the value (in pounds sterling) at such time as the deposit into the brokerage account.
Your completed Stock Transfer Request Form, and required payment, must be sent to: Birmingham Stamp Office 9th Floor, City Centre House 30 Union St BIRMINGHAM B2 4AR UNITED KINGDOM Tel: +44 845 603 0135 Fax: +44 121 643 8381 www.hmrc.gov.uk
Please contact the Stamp Office if you have any questions. It may also be possible to pay stamp duty online through HMRC’s website.
On 31 May 2011, Ensco completed its acquisition of Pride International, Inc. Under the terms of the agreement, with exceptions for certain U.K. residents and dissenting stockholders, Pride International stockholders received 0.4778 newly-issued ADSs of Ensco plus $15.60 in cash for each share of Pride International common stock. For former Pride stockholders who did not timely certify as to U.K. residency status, their ADSs were sold at prevailing market prices, plus selling costs, and the proceeds have been retained by the exchange agent pending the receipt of the Pride stock certificates and a duly completed letter of transmittal from such former Pride stockholders.
Former holders of Pride International common stock should have surrendered their Pride stock certificates, along with a duly completed letter of transmittal, in order to receive the cash portion of the merger consideration plus cash proceeds of the sale of the ADSs discussed above. Computershare, as exchange agent for Ensco, will disburse the cash held for their account upon the valid presentation of the Pride stock certificates and a duly completed letter of transmittal. Furthermore holders who do not exchange could be subject to certain abandonment and escheatment laws whereby their property would be turned over as unclaimed property.
For U.S. federal income tax purposes, a U.S. holder of Pride common stock should have recognized gain or loss on the receipt of the cash proceeds of the merger consideration in exchange for Pride common stock equal to the difference, if any, between (1) the cash proceeds of the merger consideration, including any cash received in lieu of fractional ADSs, and (2) such U.S. holder’s adjusted tax basis in the Pride common stock exchanged therefor. Please note that you should consider prior stock splits in the calculation of your adjusted tax basis, if applicable.
The fair market value of the ADSs issued in the merger was reported as $53.32 based on the closing price of the ADSs on the effective date of the merger, 31 May 2011. Based on the fair market value that was reported, a U.S. holder’s new cost basis for ADSs received in the merger was $53.32 determined by the closing price of the ADSs on the effective date of the merger, 31 May 2011. Ensco encourages shareholders to consult a qualified tax advisor. Ensco is not able to provide tax advice to shareholders.
Effective 23 December 2009, Ensco’s parent company changed its legal domicile from Delaware, U.S.A. to the U.K. through a merger transaction. Due to the change, the parent company changed from ENSCO International Incorporated (Ensco Delaware) to Ensco plc (formerly known as Ensco International plc) in a transaction whereby the Ensco Delaware shareholders exchanged their shares for ADSs in Ensco plc.
Holders of Ensco International Incorporated shares who have not exchanged their shares for ADSs prior to the Conversion or for Class A Ordinary Shares after the Conversion will not receive any dividends or interest of distributions declared on the Class A Ordinary Shares until they validly exchange. Computershare, as exchange agent for Ensco, will perform the exchange directly into Class A Ordinary Shares upon valid presentation of the Ensco International Incorporated stock certificates along with a duly completed exchange form, which has been sent to the last known address of the holder of unexchanged shares of Ensco International Incorporated common stock. Furthermore, holders who do not exchange could be subject to certain abandonment and escheatment laws whereby their property would be turned over as unclaimed property.
Generally, for U.S. federal income tax purposes, a U.S. holder should have recognized a gain, but not loss, on the receipt of Class A Ordinary Shares in exchange for Ensco International Incorporated common stock. You should generally recognize gain equal to the excess of the fair market value of the Class A Ordinary Shares received in the merger over your adjusted tax basis in the shares of Ensco International Incorporated stock exchanged. U.S. holders are not permitted to recognize any loss realized on the exchange of their shares in the merger. If the exchange of your Ensco International Incorporated shares involves shares on which gains are realized and other shares on which losses are realized, you may not net the losses against the gains to determine the amount of gain recognized. Please note that you should consider prior stock splits in the calculation of your adjusted tax basis, if applicable.
In the case of a loss, the adjusted tax basis in each Class A Ordinary Shares received by a U.S. holder should equal the adjusted tax basis of each share of Ensco International Incorporated common stock exchanged therefor. For shares upon which a taxable gain is recognized as of December 23, 2009 due to the exchange, your new basis in the Class A Ordinary Shares received is the fair market value on the effective date of the merger. The fair market value of each Class A Ordinary Shares received by an Ensco International Incorporated shareholder pursuant to the merger is $42.18, determined by the average of the low ($41.75) and high ($42.60) selling prices of an ADS on December 23, 2009. The holding period for any ADSs received will include the holding period of the Ensco International Incorporated shares exchanged, i.e. the original purchase date of your Ensco common stock will dictate the holding period for any future sales of your Class A Ordinary Shares. Note for future tax purposes: the fair market value of $42.18 will become the new cost basis for an ADS that was received or receivable in exchange for a share of Ensco International Incorporated common stock upon which gain was recognized, and the determination of short/long term gain on the future sale of Class A Ordinary Shares will be based on the original purchase date of the share of Ensco International Incorporated common stock exchanged for such ADS. Please seek advice from your tax advisor.