I have Eircom shares that were issued in 1999 and I want to cash them in. Can you please advise me what I should do?
Ms MG, email
Oh no you don't. Any shares issued in 1999 ceased to have a value after the company was taken private by Sir Anthony O'Reilly's Valentia consortium in 2001. Of course, before that, the company had already sold its mobile business Eircell to Vodafone, giving the UK telco giant an entry into the Irish market.
If you still hold share certificates going back that far and if you never received any payment (or any Vodafone shares) in 2001, you should get in touch with Computershare, which is the share registrar for the company, ie it manages its shares and transactions in them.
It is hoped that you acted back then and that the shares you actually hold are Vodafone shares, the hangover from the sale of that mobile business in 2001.
Again they have gone through many iterations since then, not least selling a US business which would also leave you as the holder of some shares in a US telecoms company called Verizon.
None of this is particularly good.
First, apart from those clever souls who sold out of Eircom in its early days on the stock market, everyone has lost money on the venture.
To compound that, if you really have done absolutely nothing with the shares since you first bought them and filed them safely away, effectively forgotten, you have missed out on not one, but two chances to offload the shares at reduced – or even zero – commission.
Verizon and Vodafone have offered Irish investors special deals to sell out of the stock in the last six months – the Vodafone offer ended just last week – and both have been covered extensively in this paper.
The average, small Irish shareholder in Vodafone holds 27 shares worth just more than €80, so getting rid of them through normal broker channels will eat up a fair portion of that. Not good news when you are already losing money on the shares.
The situation with Verizon is even worse as, having missed the offer to sell at reduced commission, your shares are now based in the United States. This increases the difficulty of transacting in them, leaves you open to inquiries from the US tax office, the IRS and will cost you more to get rid of – before you even factor in the dollar/euro exchange rate.
All in all, your experience is a salutary lesson in the need to remain interested and engaged in events covering companies in which you have invested.
Having sold Vodafone shares, what’s my loss?
I recently sold my Vodafone shares which I purchased originally from Eircom. The price I received
was €2.91 gross per share. I would be grateful if you could outline how to calculate the loss incurred, particularly what Revenue regards as the cost price of these shares at this stage.
I am aware you have already covered this ground in the past, so I apologise for asking you to repeat it now. I imagine, however, that I am not the only one in need of this information.
Mr TM, email
Unlike my correspondent above you do at least appear to have sold the shares into the no-commission/low-commission offer that Vodafone was offering up to last week. But where does that leave you?
As you mention above, this is ground I have covered before on several occasions. I don’t think I need to go through it chapter and verse this time around as, effectively, you simply want to know the loss on your investment in Ireland’s great adventure in shareholder democracy, one that will no doubt become a thesis subject in how not to privatise and float a public sector company if it has not already been covered.
Revenue has determined that you would need to secure a price of €4.58 per Vodafone share just to break even after all the consolidations, share buybacks, etc of the last 16 years.
You received a price of €2.91, which even leaving aside costs incurred in the sale, leaves you with a loss of €1.67 on each of your Vodafone shares.
And just in case you think that is that, you will also be nursing a 35.5 cent a share loss on each original Telecom Éireann share, dating back to 2001 when Sir Anthony O’Reilly’s Valentia consortium took the company private.
While the “profit” you would have made on your “free” loyalty share – remember you got one of those for every 25 Telecom shares that you held for a year after flotation – will be offset against this, the effective loss per share dating back to 2001 is still 30.16 cent a share.
So, after all this time, you are nursing a loss of more than €1.97 per share unless you have already offset that 2001 loss against subsequent gains.
Until you offset this loss against gains made on other assets sold this year or in the future, you will have no capital gains tax issue to consider.
The irony of course is that most Telecom Éireann shareholders were so scarred by the experience, they might never have gains to offset those losses against.
Selling Ryanair shares
Last week, we answered a query about a shareholder who has a share certificate for Ryanair shares and is looking to sell. While a shareholder service was offered by registrars of other shares – such as Vodafone and Standard Life – he could not find one for Ryanair and nor could I.
However, Pat O’Donoghue, who is managing director of Shareholder Solutions Ireland for Capita Asset Services, was on to me quickly to set me straight.
“Capita does offer a dealing service for our client company’s shares including Ryanair,” he writes. “Please correct the record with today’s email correspondent, MK, who may be glad of the correction. He should visit our website www.capitadeal. com and click on ‘Dealing in Irish Stock’ on the right hand side.”
I am very happy to correct the record. But I would point out to Pat and his team at Capita that the main Capita website in Ireland has no link to this site that I can find, so if you weren’t already familiar with Capita, you would struggle to find its very helpful service which facilitates buying or selling of shares either online or by phone at commissions of 1 per cent and 1.5 per cent respectively. They might want to work on that.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
