PERSONAL FINANCE:Your queries answered
Q
About eight years ago, I purchased some Ryanair shares. I have been away for a few years and returned recently. A friend told me that these shares have been divided in two.
Should I have received a letter telling me this (if it’s true). I now want to sell these shares. What should I do to confirm that I have twice as many shares.
- Mr RB, e-mail
A
A lot has happened over the past eight years, very little of it good in the long run. However, shareholders in Ryanair have fared better than most.
The company has indeed carried out a share split following approval by a general meeting of shareholders in December 2006.
The actual split, which saw each Ryanair share split into two, took place in February 2007. At the time, Ryanair shares surged to the giddy heights of €12.60 on the back of speculation that the company would acquire Aer Lingus.
As a shareholder, you should have received notification of the shareholders’ meeting and the motions being presented. The fact that you were away might explain why you heard nothing, if you did not update your address with the company’s share registrar.
If Ryanair is known for one thing, it is Michael O’Leary’s relentless focus on cutting costs. Little surprise then that the company chose not to issue replacement share certificates but simply to update the share register, held by Capita, and deem that all certificates dated prior to the split would now represent twice the stated number of shares.
If you bought the shares in May 2003, you would have paid about €6.05 a share. They are now trading at about €3.40. Taking the split into account, that means your original holding is effectively trading at €6.80 a share. That’s not bad when you consider the mayhem in stock markets since the 2008 crash – and bearing in mind that Ryanair has also paid a once-off dividend amounting to about 30 cent a share in October 2010.
There should be no problem selling the shares. Your broker will be aware of the need to “double up” the stated number of shares on your certificate, although it would be no harm attaching a note with the certificate as a reminder when you are sending it in – if only for your own peace of mind. I also always advise photocopying your certificate before you mail in the original, just in case anything goes missing.
Default concern about An Post saving certs
Q
I have Saving Certificates with An Post and am concerned what would happen to their value in a sovereign default situation by the Irish State. I have been told that Saving Certs are considered a loan to the State and may not be paid back if the State was to default on its loans.
- Mr PT, Waterford
A
People are far too glib when discussing the concept of a default. There is no indication that the State will default, although there is an ongoing issue regarding a particular class of investor: bank bondholders. This will not, of itself, affect holders of guaranteed savings in institutions such as An Post.
Even in the event of a wider crisis, a cull of State-guaranteed deposit savings remains unlikely.
This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into. Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com
