Annual Report 1997/1998 - Munich Re

Munich Re Report of the Board of Management
Prospects
Measures related to our share capital
The stock market reacted very favourably to the parent company’s
rights issue in summer 1998, which raised a total of approximately
DM 2.1bn. After our very positive experience with the innovative 1994
capital increase, we again attached a warrant to each new registered
share in this rights issue. The warrants were separated from the shares
at the end of the subscription period and are being traded and quoted
separately. During the warrant exercise period, which runs until
3rd June 2002, four warrants entitle the holder to subscribe for one
further registered share. The exercise price is DM 635 until the full
paying-up of the registered shares, and DM 640 thereafter.
Full paying-up of shares followed by stock split
In a second step we want to convert our two share categories into
only one: restrictedly transferable no-par-value registered shares. For
this purpose, at the end of 1998 and beginning of 1999, we first intend
to call in the unpaid amounts on the registered shares – currently
partly paid-up to DM 5 – and then carry out a 1:2 stock split. For our
registered shareholders this doubling of the number of shares they
hold will mean a corresponding increase in their dividend earnings,
assuming the dividend amount per share can be maintained.
Conversion into no-par-value shares
Following this, Munich Re shares will be converted into no-par-value
units. In accordance with our traditional objective of endeavouring
to treat the holders of our two categories of share equally, we want
to offer the holders of our bearer shares the chance to double their
number of shares as well. In a special capital increase for these
shareholders we will given them the opportunity to acquire one new
no-par-value registered share for each of their bearer shares at an
issue price of DM 247 and also to convert each bearer share into a
further registered share.
These capital measures are geared to creating the preconditions for
the changeover to the euro whilst at the same time unifying our share
structure and making Munich Re shares more transparent, liquid and
thus more attractive for both German and foreign investors
Earlier reporting to shareholders
As from 1998 the Munich Reinsurance Company is changing its
balance sheet date. Its next consolidated accounts will therefore
be for a short business year which covers its underwriting business
for the whole calendar year 1998 but the rest of its business – in
particular, investment earnings – only for the period from 1st July
to 31st December 1998.
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