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Ensco plc Message Board

  • invest_2_bsecure invest_2_bsecure May 15, 2012 9:58 AM Flag

    Another ESV Taxable Event for Shareholders?

    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.

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