REG - NatWest Group plc - Notice of General Meeting and Class Meeting

NatwestAnnouncement

09/08/2022 07:00

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RNS Number : 3779V  NatWest Group plc  09 August 2022

9 August 2022

NatWest Group plc

("NatWest Group" or the "Company")

Publication of Circular and Notice of General Meeting and Notice of Class
Meeting relating to

a proposed Special Dividend and associated Share Consolidation

NatWest Group is pleased to announce that, following the announcement on 29
July 2022 in relation to the proposed Special Dividend and associated Share
Consolidation, a circular setting out the full details of the proposed Special
Dividend, Share Consolidation and related matters (the "Circular") has been
published today.

The Circular confirms that, in line with previous announcements, NatWest Group
intends to return approximately £1.75 billion to Ordinary Shareholders by way
of a proposed Special Dividend of £0.168 per Existing Ordinary Share in the
capital of NatWest Group. In addition, in order to maintain the comparability,
so far as practicable, of NatWest Group's share price before and after the
Special Dividend, it is proposed that the Special Dividend be accompanied by a
Share Consolidation resulting in Ordinary Shareholders receiving 13 New
Ordinary Shares with a nominal value of £1.0769 each for every 14 Existing
Ordinary Shares that they hold*.

Notice of General Meeting and Class Meeting

The Circular contains further details of these matters as well as: (i) a
notice convening a General Meeting of Shareholders to be held at Gogarburn,
Edinburgh EH12 1HQ at 2.00 p.m. on 25 August 2022; and (ii) a notice convening
a Class Meeting of Ordinary Shareholders to be held at Gogarburn, Edinburgh
EH12 1HQ at 2.30 p.m. on 25 August 2022, or as soon as the General Meeting has
completed or been adjourned.

Special Dividend

Assuming the conditions described below are satisfied, the Board is
recommending that Shareholders approve a Special Dividend in pounds sterling
to Ordinary Shareholders on the Register as at 6.00 p.m. (UK time) on 26
August 2022. The Special Dividend is expected to be paid to such Ordinary
Shareholders on 16 September 2022.

An equivalent amount in respect of the Special Dividend is proposed to be paid
in US dollars to holders of American depositary receipts ("ADRs", each
representing two Ordinary Shares in NatWest Group) (the "ADR Holders") on the
ADR Register as at 5.00 p.m. (New York time) on 26 August 2022 based on an
exchange rate determined in accordance with the deposit agreement pursuant to
which the ADRs were issued (the "Deposit Agreement"). Cheques for the payment
of such amount are expected to be despatched on or around 16 September 2022.

The Special Dividend is subject to the approval of Shareholders at the General
Meeting. It is also conditional upon: (i) the approval by Shareholders at the
General Meeting of the Share Consolidation; (ii) the approval by Shareholders
at the General Meeting of the proposed amendments to the Articles as a result
of the Share Consolidation; (iii) the approval by Ordinary Shareholders at the
Class Meeting of the Share Consolidation and proposed amendments to the
Articles as a result of the Share Consolidation; and (iv) Admission in respect
of the New Ordinary Shares taking place by or as soon as practicable after
8.00 a.m. (UK time) on 30 August 2022.

*Note: the nominal value of the New Ordinary Shares without rounding is
£1.076923076923077 per share

 

Share Consolidation

As all Existing Ordinary Shares will be consolidated, whilst each Ordinary
Shareholder will hold fewer Ordinary Shares following the Share Consolidation,
each Ordinary Shareholder will still hold the same proportion of NatWest
Group's Ordinary Share capital (i.e. the total number of Existing Ordinary
Shares in issue)  immediately before and after the Share Consolidation
(subject to any fractional entitlements, which will be dealt with in
accordance with the process described in the Circular). Although the New
Ordinary Shares will have a different nominal value (being £1.0769 each) to
the Existing Ordinary Shares, they will be traded on the London Stock Exchange
in the same way as the Existing Ordinary Shares and will carry the same rights
under the Articles as the Existing Ordinary Shares, subject to consequential
amendments to the Articles as set out in the Circular. The Share Consolidation
will apply to Ordinary Shareholders on the Register as at 6.00 p.m. (UK time)
on 26 August 2022.

As a result of the Share Consolidation, for each existing ADR held on the ADR
Register as at 5.00 p.m. (New York time) on 26 August 2022, ADR Holders will,
upon cancellation of their Existing ADRs, be issued and receive New ADRs in
the ratio of 13 New ADRs to replace every 14 Existing ADRs (to be distributed
in accordance with the Deposit Agreement after giving effect to the fees and
expenses provided for therein).

The Share Consolidation is subject to the approval of Shareholders at the
General Meeting. It is also conditional upon: (i) the approval by Shareholders
at the General Meeting of the Special Dividend; (ii) the approval by
Shareholders at the General Meeting of the proposed amendments to the Articles
as a result of the Share Consolidation; (iii) the approval by Ordinary
Shareholders at the Class Meeting of the Share Consolidation and the proposed
amendments to the Articles as a result of the Share Consolidation; and (iv)
Admission in respect of the New Ordinary Shares taking place by or as soon as
practicable after 8.00 a.m. (UK time) on 30 August 2022.

Additional resolutions

The Share Consolidation will have an impact on the authorities taken by the
Company at its 2022 AGM. To reflect this impact, at the General Meeting,
approval by Shareholders will also be sought to amend the annual authorities
to enable NatWest Group to make market purchases of its Ordinary Shares, allot
New Ordinary Shares and to disapply pre-emption rights, to cover the period
between the date of the General Meeting and the 2023 AGM. Additional
approvals, which are for consequential amendments required as a result of the
Share Consolidation only, will also be sought to amend the Directed Buyback
Contract in relation to the existing authority for off-market purchases of
Ordinary Shares from HM Treasury, and to amend the Articles. These resolutions
are conditional upon: (i) the approval by Shareholders of the Special Dividend
and the Share Consolidation; (ii) the sanction of Ordinary Shareholders to be
sought at the Class Meeting; and (iii) Admission in respect of the New
Ordinary Shares taking place by or as soon as practicable after 8.00 a.m. (UK
time) on 30 August 2022. Further details of these additional resolutions are
set out in the Circular. Additionally, at the Class Meeting of Ordinary
Shareholders, approval by Ordinary Shareholders will also be sought to amend
the Articles, which will be treated as a variation of the voting rights
attaching to Ordinary Shares.

Background

The strength of NatWest Group's balance sheet and financial performance mean
that it is well positioned to  grow its lending to customers responsibly and
provide support to those who are likely to need it most whilst also continuing
to transform the bank and deliver sustainable returns to Shareholders.

In 2021, NatWest Group returned £3.8 billion to Shareholders through a
combination of ordinary dividends, directed buybacks of Ordinary Shares from
HM Treasury and its on-market buyback programme. In 2022, NatWest Group
completed a £1.2 billion directed buyback from HM Treasury, a £750 million
on-market buyback programme and it has announced an interim dividend
equivalent to £364 million. Even after taking into account these
distributions, NatWest Group's CET1 ratio at the end of June 2022 was 14.3 per
cent. (including the accrual of the Interim Dividend and the accrual of the
Special Dividend), well above its target CET1 ratio for end of 2022 of 14 per
cent. and 2023 of 13 to 14 per cent. Given the significant surplus capital
within NatWest Group today, the Board is proposing a Special Dividend of
approximately £1.75 billion. NatWest Group's UK leverage ratio headroom and
liquidity coverage ratio are also both comfortably above regulatory
requirements.

The Board has chosen to implement this return of capital through a Special
Dividend and Share Consolidation (as is often done in the case of significant
special dividends) because it can be executed efficiently, treats all
Ordinary Shareholders equally, is financially attractive and avoids
increasing the proportion of NatWest Group owned by HM Treasury:

(i)         Speed of execution: this method of distribution allows
NatWest Group to return a significant amount of capital to Ordinary
Shareholders quickly compared to an on-market buyback programme which, to
return this amount of capital, would take many months given that it is
constrained by daily trading volume limits;

(ii)         Equal treatment of all Ordinary Shareholders: all
Ordinary Shareholders on the Register, and ADR Holders on the ADR Register, at
the record date are entitled to the same Special Dividend per share of
£0.168;

(iii)        Attractive financial impact: by undertaking the Share
Consolidation alongside the Special Dividend, it is accretive to NatWest
Group's earnings per share and tangible book value per share, similar to the
financial effects of an on-market buyback programme; and

(iv)        No change in HM Treasury's shareholding: further on-market
buyback programmes without sell-downs by HM Treasury would cause HM Treasury's
shareholding in NatWest Group to increase. The Special Dividend and the Share
Consolidation does not increase HM Treasury's shareholding.

NatWest Group has maintained capacity to participate in directed buybacks of
HM Treasury's shareholding in NatWest Group, recognising that any exercise of
this authority is dependent upon HM Treasury's intentions. As a result of the
completed directed buyback in March 2022, NatWest Group will not be able to
conduct a directed buyback under its current authorities until March 2023.

Expected timetable

The expected timetable for the General Meeting, the Class Meeting, the Special
Dividend and the Share Consolidation is set out below. All references to times
are to UK time unless stated otherwise.

 Publication and posting of the Circular, including the Notice of General        9 August 2022
 Meeting and the Notice of Class Meeting
 Latest time and date for receipt of ADR Voting Cards from ADR Holders in        12.00 p.m. (New York time) on 19 August 2022
 respect of the General Meeting and the Class Meeting
 Proxy vote lodged on behalf of ADR voters                                       22 August 2022
 Latest time and date for receipt of Form of Proxy and CREST Proxy Instructions  2.30 p.m. on 23 August 2022
 from Shareholders in respect of the General Meeting and/or the Class Meeting
 Record time and date for entitlement to vote at the General Meeting             6.00 p.m. on 23 August 2022
 Record time and date for entitlement of Ordinary Shareholders to vote at the    6.00 p.m. on 23 August 2022
 Class Meeting
 General Meeting                                                                 2.00 p.m. on 25 August 2022
 Class Meeting of Ordinary Shareholders                                          2.30 p.m. on 25 August 2022 (or as soon as the General Meeting has completed
                                                                                 or been adjourned)
 Latest time for dealings in Existing Ordinary Shares                            4.30 p.m. on 26 August 2022
 Record time and date for entitlement to  Special Dividend and  Share            6.00 p.m. on 26 August 2022
 Consolidation for Ordinary Shareholders

 Effective time and date for entitlement to Special Dividend and Share           5.00 p.m. (New York time) on 26 August 2022
 Consolidation for ADR Holders
 Ordinary Shares (but not ADRs) marked ex-entitlement                            8.00 a.m. on 30 August 2022
 Effective time and date for the Share Consolidation for Ordinary Shareholders   8.00 a.m. on 30 August 2022
 Commencement of dealings in New Ordinary Shares on the London Stock Exchange    8.00 a.m. on 30 August 2022
 (after the Share Consolidation)
 CREST accounts credited with New Ordinary Shares (after the Share               30 August 2022
 Consolidation)
 Effective date for the Share Consolidation for ADR Holders                      30 August 2022
 ADRs marked ex-entitlement                                                      30 August 2022
 Commencement of dealings in New ADRs on a "When-Issued" basis                   30 August 2022
 Commencement of dealings in New ADRs on "Regular Way" basis                     1 September 2022
 Credit of New ADRs to ADR Holders                                               1 September 2022
 Despatch of share certificates in respect of New Ordinary Shares                No later than 14 September 2022
 Payment of the Special Dividend to Ordinary Shareholders (by CREST payment,     16 September 2022
 BACS/SEPA or by cheque)
 Despatch of cheques to ADR Holders in respect of the Special Dividend (and      On or around 16 September 2022
 Interim Dividend)

 

If any of the above times and/or dates change, NatWest Group will give notice
of the change by issuing an announcement through a regulatory information
service.

Availability of the Circular

Printed copies of the Circular will be posted today to Shareholders and any
other person entitled to receive a copy (other than those who have elected
for, or who have been deemed to have elected for, notification by electronic
communication).

A copy of the Circular and certain other documents in relation to the Special
Dividend and the Share Consolidation are available for inspection on NatWest
Group's website at
https://investors.natwestgroup.com/shareholder-centre/shareholder-meetings
(https://investors.natwestgroup.com/shareholder-centre/shareholder-meetings) .

A copy of the Circular (containing the Notice of General Meeting and Notice of
Class Meeting) has been submitted to the National Storage Mechanism, where it
will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .

Capitalised terms used but not otherwise defined in this announcement have the
same meaning given to them in the Circular.

For more information contact:

Investor Relations

+ 44 (0)207 672 1758

Media Relations

+44 (0) 131 523 4205

Merrill Lynch International

+44 20 7628 1000

Important notices

Merrill Lynch International, which is authorised in the UK by the Prudential
Regulation Authority and regulated in the UK by the Financial Conduct
Authority and the Prudential Regulation Authority, is acting as financial
adviser and corporate broker for NatWest Group and for no one else in
connection with the Special Dividend and the Share Consolidation, and will not
be responsible to anyone other than NatWest Group for providing the
protections afforded to clients of Merrill Lynch International nor for
providing advice in connection with the Special Dividend or Share
Consolidation or any other matters referred to in this announcement. Neither
Merrill Lynch International nor any of its affiliates, directors or employees
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, consequential, whether in contract, in tort, in delict,
under statute or otherwise) to any person who is not a client of Merrill Lynch
International in connection with this announcement, any statement contained
herein, the Special Dividend, the Share Consolidation or otherwise.

This announcement is not intended to, and does not constitute or form part of,
and should not be construed as, any offer, invitation, solicitation or
recommendation of an offer to purchase, sell, subscribe for or otherwise
dispose of or acquire any securities or the solicitation of any vote or
approval in any jurisdiction and neither the issue of the information nor
anything contained herein shall form the basis of or be relied upon in
connection with, or act as an inducement to enter into, any investment
activity. No shares are being offered to the public by means of this
announcement. This announcement does not constitute either advice or a
recommendation regarding any securities, or purport to contain all of the
information that may be required to evaluate any investment in NatWest Group
or any of its securities and should not be relied upon to form the basis of,
or be relied on in connection with, any contract or commitment or investment
decision whatsoever. Past performance is not an indication of future results
and past performance should not be taken as a representation that trends or
activities underlying past performance will continue in the future.

Shareholders are advised to carefully read the Circular. Any response to the
Share Consolidation and Special Dividend should be made only on the basis of
the information in the Circular. If you are in any doubt as to what action you
should take in relation to this announcement or the Circular, you are
recommended to seek your own personal financial advice immediately from your
stockbroker, bank manager, solicitor, accountant or other independent
financial adviser authorised under the Financial Services and Markets Act
2000, or from another appropriately authorised independent financial adviser.

The distribution of this announcement in jurisdictions in or from certain
jurisdictions may be restricted or prohibited by the laws of any jurisdiction
other than the United Kingdom. Recipients are required to inform themselves
of, and comply with, all restrictions or prohibitions in such other
jurisdictions. Any failure to comply with applicable requirements may
constitute a violation of the laws and/or regulations of other such
jurisdiction.

This announcement has been prepared for the purposes of complying with the
applicable law and regulation of the United Kingdom (including the Listing
Rules and the Disclosure Guidance and Transparency Rules) and the information
disclosed may not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and regulations of
any jurisdiction outside of the United Kingdom.

This announcement is being distributed to all shareholders in NatWest Group
and holders of NatWest Group's ADRs. A copy of this announcement can be found
on our website at www.natwestgroup.com.

Forward-looking statements

This document may include forward-looking statements within the meaning of the
United States Private Securities Litigation Reform Act of 1995, such as
statements that include, without limitation, the words 'expect', 'estimate',
'project', 'anticipate', 'commit', 'believe', 'should', 'intend', 'will',
'plan', 'could', 'probability', 'risk', 'Value-at-Risk (VaR)', 'target',
'goal', 'objective', 'may', 'endeavour', 'outlook', 'optimistic', 'prospects'
and similar expressions or variations on these expressions. These statements
concern or may affect future matters, such as NatWest Group's future economic
results, business plans and strategies. In particular, this document may
include forward-looking statements relating to NatWest Group in respect of,
but not limited to: its economic and political risks, its regulatory capital
position and related requirements, its financial position, profitability and
financial performance (including financial, capital, cost savings and
operational targets), the impact of the Share Consolidation and the Special
Dividend, the implementation of its purpose-led strategy, its environmental,
social, governance and climate related targets, its access to adequate sources
of liquidity and funding, increasing competition from new incumbents and
disruptive technologies, the impact of the COVID-19 pandemic, its exposure to
third party risks, its ongoing compliance with the UK ring-fencing regime and
ensuring operational continuity in resolution, its impairment losses and
credit exposures under certain specified scenarios, substantial regulation and
oversight, ongoing legal, regulatory and governmental actions and
investigations, the transition of LIBOR and IBOR rates to alternative risk
free rates and NatWest Group's exposure to operational risk, conduct risk,
cyber, data and IT risk, financial crime risk, key person risk and credit
rating risk. Forward-looking statements are subject to a number of risks and
uncertainties that might cause actual results and performance to differ
materially from any expected future results or performance expressed or
implied by the forward-looking statements. Factors that could cause or
contribute to differences in current expectations include, but are not limited
to, future growth initiatives (including acquisitions, joint ventures and
strategic partnerships), the outcome of legal, regulatory and governmental
actions and investigations, the level and extent of future impairments and
write-downs (including with respect to goodwill), legislative, political,
fiscal and regulatory developments, accounting standards, competitive
conditions, technological developments, interest and exchange rate
fluctuations, general economic and political conditions, the impact of
climate-related risks and the transitioning to a net zero economy and the
impact of the COVID-19 pandemic. These and other factors, risks and
uncertainties that may impact any forward-looking statement or NatWest Group's
actual results are discussed in NatWest Group's UK 2021 Annual Report and
Accounts (ARA), NatWest Group's Interim Results for Q1 2022 and H1 2022 and
NatWest Group's filings with the US Securities and Exchange Commission,
including, but not limited to, NatWest Group's most recent Annual Report on
Form 20-F and Reports on Form 6-K. The forward-looking statements contained in
this document speak only as of the date of this document and NatWest Group
does not assume or undertake any obligation or responsibility to update any of
the forward-looking statements contained in this document, whether as a result
of new information, future events or otherwise, except to the extent legally
required.

No statement in this document is or is intended to be a profit forecast or to
imply that the earnings of NatWest Group for the current or future financial
years will necessarily match or exceed the historical or published earnings of
NatWest Group.

Any information contained in this document on the price at which shares or
other securities in NatWest Group have been bought or sold in the past, or on
the yield on such shares or other securities, should not be relied upon as a
guide to future performance.

 

LEI: 2138005O9XJIJN4JPN90

 

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