Demerger to be put to shareholder vote at General meeting of shareholders in May 2011
TNT has revealed that its preparation of the demerger transaction – which will separate TNT's Express and Mail operations - will continue unabatedly, with filing of documentation planned following the 2010 annual results. A General meeting of shareholders is planned for the end of May 2011 at which shareholders will be able to vote on the proposal. The separation will become effective very shortly thereafter. A second interim dividend is planned for distribution in March 2011 to precede the 2010 final, to allow for timely dividend payment to shareholders.
TNT distributable equity position TNT NV estimated at €2,000 million, with participation in Express of €2,900 million before demerger while distributable equity available in TNT NV's balance sheet for full demerger of Express is insufficient, with an equity gap of around €900 million at demerger.
The company assumed potential further equity write-down of around €900 million in 2012/13 as a direct result of changes to be introduced in the IAS19 'Employee Benefits' accounting standards. The estimated write-down is based on the current status of unrecognised actuarial losses included in TNT's pensions, after the demerger.
Martyn Wright, Managing Director, TNT SAB Express Saudi Arabia, said that the proposed demerger/separation will enable greater internal focus on each business, with single-business investment discipline and capital allocation and leaner, more flexible organisations. Externally, separation will provide more transparency and two distinct shareholding opportunities, with a clear choice of investment between a value and growth stock. Separation will also facilitate participation in sector consolidation and M&A."
The internal and organisational separation will be completed on January 1, 2011, with the transaction to be proposed to the General meeting of shareholders, including appointments to the new Executive and Supervisory Boards. TNT revealed it will retain a 29.9 per cent stake in the Express unit to cover separation costs. These shares will be returned to shareholders as soon as possible. In Europe, Express has identified profitable growth opportunities in high-end standard parcels and freight and in sector-specific value-added solutions. In emerging markets such as Saudi Arabia, Express will continue to lead the way in the development of day-certain express services and further grow its intercontinental business.