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The
demerger of mmO2, the group’s former mobile phone
business, was completed in November 2001. The demerger,
scheme of arrangement and associated reduction in capital
were approved by shareholders in October 2001 and the
High Court in November 2001. The demerger of mmO2 created
two new listed companies and dealings in BT Group and
mmO2 shares commenced on 19 November 2001. BT shareholders
on record on 16 November 2001, received one BT Group
plc share and one mmO2 plc share for each existing British
Telecommunications plc share held. Based on the first
day’s dealings on the London Stock Exchange, BT
Group represented approximately 78% of the equity value
of the former BT group and mmO2 represented approximately
22%.
On
the demerger, net assets of £19,490 million attributable
to mmO2 were distributed to shareholders in the form
of a demerger distribution. mmO2 assumed approximately
£500 million of debt, with the bulk of the outstanding
debt remaining with the continuing BT Group. The reduction
of capital had the effect of increasing distributable
reserves in BT Group plc by £9,537 million.
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