Volkswagen sponsored an ADR program whereby investors could invest in Volkswagen using securities traded on US exchanges. This security traded using the symbol VLKAY. The company recently terminated this Volkswagen sponsored security.
JP Morgan decided to create a non-sponsored ADS program to allow US investors to continue to hold a Volkswagen based security traded on US exchanges. This new security trades using the ticker symbol VWAGY. VLKAY and VWAGY shares did not share the same relationship to the parent shares traded on German exchanges.
The easiest way to handle this change is to treat it as a simple merger. The following instructions are based on publicly available information regarding the relationship between the sponsored ADR program and non-sponsored ADS program.
The Merger Entry
Go to Transactions > Merger or Accounting > Securities > Record merger of securities depending on the version of the software being used. If you are unfamiliar with merger transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asp?page=normal_merger
Here is the information you need to complete the merger.
Old Security or Merging Company: Volkswagen ADR (VLKAY)
Price per share of old Security / VLKAY: Use your last valuation statement price
Cash received: See your broker statement for cash-in-lieu
New Security: Volkswagen ADS (VWAGY)
Price per share of new Security: 15.90
Shares received : 2.0 x (#of VLKAY shares owned)
(Remember to include fractional shares.)
For example, if you owned 100 VLKAY shares, you should receive 2.0 x 100 = 200 VWAGY shares.
Save the transaction and the merger has been entered.
Note: Owners of VLKAY shares may still have the option of exchanging these shares for the parent company German shares. This will depend on your broker. Your broker may not hold shares traded only on foreign exchanges and will only allow an exchange for the new VWAGY shares or may have automatically made this exchange.