CGT - 2009 Entitlement Offer

Section 8 of the 2009 BlueScope Steel Limited Entitlement Offer Prospectus provided shareholders with information on taxation implications of the Offer.

Further, sub-section 8.3 of the Prospectus covered capital gains tax ("CGT") cost base matters arising from the exercise of Entitlements.

This page provides further information concerning the cost base of New Shares for holders who exercised their Entitlement arising from BlueScope Steel Shares they had effectively owned prior to 20 September 1985 ("Pre-CGT Shares") - refer to demerger cost base information for more details on whether Shares are Pre-CGT Shares. This page should be read in conjunction with, and uses the same defined terms as, the Prospectus.

Sub-section 8.3 of the Prospectus includes the following comment:

For Eligible Retail Shareholders who acquired their original Shares prior to 20 September 1985 (i.e. pre-CGT shares), the cost base of the New Shares may be the amount paid by the Eligible Retail Shareholder plus any non-deductible incidental costs incurred by the Eligible Retail Shareholder in connection with the acquisition of the New Shares, and the market value of the Entitlement relating to pre-CGT Shares.

Section 130-40(6) of the Income Tax Assessment Act 1997 covers this topic. A market value of the Entitlement is the market value of BlueScope Steel Shares on the day the Entitlement was exercised, less the $1.55 per share Offer Price.

The daily volume weighted average share price of ordinary course trades on the ASX could be used as the market value of BlueScope Steel Shares. The following information is provided to assist you determine the market value of an Entitlement to one new share during the period that Entitlements could be exercised.

DateVolume Weighted Average Share PriceEntitlement to a New Share
11 May $2.31 $0.76
12 May $2.33 $0.78
13 May $2.27 $0.72
14 May $2.06 $0.51
15 May $1.99 $0.44
18 May $1.94 $0.39
19 May $2.07 $0.52
20 May $2.04 $0.49
21 May $2.07 $0.52
22 May $2.07 $0.52
25 May $2.13 $0.58
26 May $2.10 $0.55
27 May $2.16 $0.61
28 May $2.27 $0.72
29 May $2.40 $0.85

We note that the addition to cost base to New Shares for the market value of the Entitlement relating to Pre-CGT shares may not be applicable in a variety of circumstances, including:

  • on New Shares allotted in the Offer exceeding in number, based on a one for one Entitlement, the number of Pre-CGT Shares held at the Record Date; and -
  • on New Shares allotted in the Offer arising from an Entitlement based on Shares that are not Pre-CGT Shares.

This summary is general in nature and is based on the law in force in Australia at 9.00am on 5 May 2009. The precise taxation implications from participating in the Offer will depend upon each Eligible Retail Shareholder's specific circumstances. Eligible Retail Shareholders should seek their own independent taxation advice before reaching conclusions as to the possible taxation consequences of the Offer.