Most Vodafone staff shares sold

The majority of the shares allocated to about 1,000 Irish Vodafone staff in May 2001 have now been sold, with most staff selling their allocations for between €12,000 and €13,000, it has emerged.

As part of the takeover of Eircell by Vodafone back in 2001 staff were given about 8.7 million shares and these were subsequently transferred to an Employee Share Ownership Trust (ESOT) working on behalf of staff.

Since June 2004, staff have been entitled to sell about 7.6 million of shares. The remainder have been held back for potential dispersal in the second half of 2006 by an ownership trust.

The incoming chairman of the trust, Mr Mike O'Connor, said about 65 to 70 per cent of the 7.6 million shares have now been sold by participants. He said the majority of participants gained between €12,000 and €13,000 following the transaction.

Vodafone staff were only allowed to sell their shares from June of this year because of Revenue rules. The shares had no great strategic value within the Vodafone group, although the use of an employee shareholding plan is highly unusual in the Vodafone group of companies.

The shares were bought - with funds from Eircom - for about €28 million on the London Stock Exchange.

Staff did not pay for the shares directly, but were given them in exchange for higher pension contributions and greater efficiencies at Vodafone.

The shares were sold by most participants in the range of between £1.18 and £1.22 sterling. When the shares were appropriated for staff they were bought in various price ranges: one tranche was purchased at 90p; another tranche at £1.50 sterling and another at £1.70 sterling. Because the shares were sold in most cases at a lower price, participants were able to escape capital gains tax.