In 2009, ESV moved it's Headquarters to London and coverted it's shares to ADS instruments. That proved to be a fully taxable event, it counted just as though the shares were sold. Now, ESV is converting it's ADS shares back to their original U.S. shares. Is this going to be a taxable event also? I had to pay a lot of taxes on the original conversion. And now it appears as though I might have to pay more, without ever selling any of my original shares. If it is a taxable event the ADS shares were issued at a $42 price and now the pps is at $47, so it is possible that we could be taxed again for a $5 share gain for 2012.
I am a long term buy and hold investor and I don't appreciate having to pay taxes on shares I haven't sold. I think that ESV management is really screwing us around. Here is part of their press release concerning the conversion of the shares back to U.S. status shares:
Ensco plc (NYSE: ESV - News) announced today that the Company 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, and Ensco expects its Class A Ordinary Shares to begin trading on the NYSE on 22 May 2012 under the same symbol “ESV.”
Each Ensco ADS currently represents one Class A Ordinary Share of the Company. 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 for 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.
Thanks for that tax news update. I have been looking for a good offshore driller, and watching ESV for a month doing my DD research. Looks like I should wait until the 22nd of May to make my buy in. I have 15K to invest in this company as part of my energy portfolio.
Question: Do you think the price will drop with the share transfer offer? Money is going to the broker on Monday!
Thanks for any comments....my tip of the day for you is buy ARNA, it will get approved by the FDA for a triple from today's prices. Owned it for three years, up $40k from the recent approval by the AdComm a few days ago. It has room to run to $15 PPS with FDA approval on June 27th.
Okay, I've done my homework. I have found and reviewed the ESV FAQ sheet that addresses the new conversion. The FAQ sheet says that it is definitely NOT a taxable event. Here is a link to the ESV FAQ sheet: