The Central Tax Board has issued a preliminary ruling (86/2004) to a Kemira Oyj shareholder concerning the acquisition cost of Kemira GrowHow Oyj shares distributed as dividend.
In accordance with this preliminary ruling, the acquisition cost of a Kemira GrowHow Oyj share in the shareholder's taxation is deemed to be either the weighted mean share price on the first quotation day including the pre-opening trades, or, secondarily, the corresponding mean share price of the first five stock-exchange days if the latter mean price is deemed to better reflect the fair market value of the share.
The weighted mean price of the Kemira GrowHow Oyj share on the first quotation day, including the pre-opening trades, was EUR 5.35. The corresponding mean price of the first five stock exchange days was EUR 5.36. Kemira Oyj's understanding is that the weighted mean price on the first quotation day, i.e. EUR 5.35, should be applied as the share-specific acquisition cost.
For shareholders who are partially taxed in Finland, the acquisition cost of a Kemira GrowHow Oyj share distributed as dividend will be determined on the basis of the tax legislation of such a tax-payer's country of residence and it can therefore differ from that presented above.
In accordance with the said preliminary ruling, the value of the dividend is also determined as described above from the viewpoint of the dividend-paying company, i.e. Kemira Oyj. In the company's Interim Report published on 3 November 2004, the impact on earnings of the dividend payout was calculated by applying the value EUR 5.67, which was the weighted mean price of first day of trading, less the pre-opening trades. It was announced at the same time that Kemira Oyj would be applying for a preliminary ruling and that the amount of the dividend payout and its impact on earnings would change insofar as the preliminary ruling differs from the mean share price of EUR 5.67. Taking into account the change in the value of the dividend, the impact of the dividend distribution and the disposal of shares within Kemira Oyj, including arrangement costs, is negative by about EUR 23 million (instead of the previously announced figure of about EUR 11 million), and this will have an impact on Q4 earnings.
The preliminary ruling is not yet legally valid. Kemira will inform shareholders in the event that the final decision differs from the preliminary ruling.
For further information please contact:
Kemira Oyj, tel. +358 (0)10 8611
Timo Leppä, Executive Vice President, Communications
Tel. +358 (0)10 862 1700
GSM +358 (0)50 301 6800