Notes 27, 28
Cumulative preferred financing shares
Number
of shares
(x 1,000)
Share
capital
Issued cumulative preferred financing shares
Authorized cumulative preferred financing shares
(EUR 0.25 par value each)
369,217
500,000
92
125
Other non-current
financial liabilities
Group
equity
Total
Paid-in capital issued shares 67
Additional paid-in capital 430
LO "n|-
C\l
92
574
Balance as of December 31, 2006 497
169
666
On January 2, 2007, 100,802,061 cumulative preferred
financing shares were converted into 22,419,051 common
shares, which conversion was effected by (i) conversion of
22,419,051 cumulative preferred financing shares into
22,419,051 common shares; and (ii) the acquisition for no
consideration of 78,383,010 cumulative preferred financing
shares by Ahold. From the date Ahold received irrevocable
notification of the conversion to common shares (November
30, 2006), those cumulative preferred financing shares that
will be converted, are classified as a separate class of equity.
The cumulative preferred financing shares were issued in
four tranches. Dividends are paid on each cumulative
preferred financing share at a percentage (the "Financing
Dividend Percentage") based on the average effective yield
on Dutch state loans with a remaining life of nine to 10 years
and determined at the time that the shares were issued.
When a period of 10 years has elapsed after the issue date of
a tranche, and every 10 years thereafter (the "Reset date"),
the Financing Dividend Percentage is reset. The Company
and the holders of (depositary receipts of) cumulative
preferred financing shares have agreed that the rates are
adjusted as of March 4, 2006 until 10 years from the date of
issue to 7.17 percent per year for the shares issued in June
1996, 4.98 percent per year for the shares issued in August
1998, 6.27 percent per year for the shares issued in October
2000 and 7.33 percent per year for the shares issued in
December 2003. The nominal value plus additional paid-in
capital per tranche are EUR 113 (June 1996 tranche),
EUR 73 (August 1998 tranche), EUR 404 (October 2000
tranche) and EUR 76 (December 2003 tranche), in
aggregate EUR 666.
The total number of votes that can be exercised by the
cumulative preferred financing shares is approximately
100 million, representing approximately 6 percent of
the total vote (expressed as the sum of the outstanding
cumulative preferred financing shares plus the
common shares).
The cumulative preferred financing shares are convertible
into common shares as of March 4, 2006. The conversion
conditions have been set so as to avoid any transfer of value
from the common shares to the cumulative preferred
financing shares. The maximum number of common shares
to be received upon conversion of all outstanding cumulative
preferred financing shares has been capped at 120 million.
As a consequence of the conversion on January 2, 2007,
as described above, the total number of votes that can be
exercised by the cumulative preferred financing shares
after January 2, 2007 is approximately 75 million. The
maximum number of common shares to be received upon
conversion of all outstanding cumulative preferred financing
shares is approximately 90 million after the conversion on
January 2, 2007.
The conversion features are similar for all tranches.
Conversion is allowed for all shares in one tranche held by
one investor but not for fractions of tranches held by one
investor. Upon conversion, the holders of Depositary receipts
will receive a number of common shares that is calculated
by dividing the value of the cumulative preferred financing
shares on the day before the conversion date by the average
share price of Ahold common shares on the five trading days
preceding the notification date, the notification date and the
four trading days following the notification date. The value of
the cumulative preferred financing shares will for this
purpose be considered to equal the lower of the nominal
value plus the additional paid-in capital of the cumulative
preferred financing shares (the "Par Value") or the present
value of the remaining preferred dividends until the first
Reset date plus the present value of the Par Value at the first
Reset date. The Company can redeem the cumulative
preferred financing shares of a certain tranche, but not
fractions of a tranche. Redemption of a tranche is subject
to the approval of the holders of Depositary receipts of that
tranche, unless all (remaining) cumulative preferred
financing shares are redeemed. Redemption takes
place at the higher of the Par Value or the present value
of the cumulative preferred financing shares at the time
of redemption.
28 Other non-current liabilities
December 31,
2006
January 1,
2006
Step rent accruals
97
93
Deferred gains
71
69
Other
30
43
Total other non-current liabilities
198
205
Step rent accruals relate to the equalization of rent payments
relating to contracts with scheduled fixed rent increases
throughout the life of the lease contract. Deferred gains
predominantly represent the non-current portions of
deferred gains on sale and leaseback transactions.
Ahold Annual Report 2006 103
