Share Split

On 5 July 2007 the annual general meeting of shareholders adopted a resolution to split the shares at a ratio of 1 : 10. This means that one existing share was divided into ten new shares. The aim was to increase trading liquidity and accessibility of shares to a broader investor base.

After the share split each shareholder held ten times more shares than before, while the value of each individual share was ten times lower than before. This share split did not alter the total value of shareholder investments in Krka shares.

Krka split its shares in September 2007. All efforts were made to ensure the minimum disturbance in share trading and Krka also ensured that shareholders and the general public were properly informed.

Reasons for share split

The value of Krka share on the stock exchange was approx. EUR 1,000, which is a substantial sum for individuals, who represent the most frequent group of Krka’s investors. The average net salary in Slovenia is actually lower than the price of one Krka share.

An individual who saved EUR 500.00 and decided to invest in Krka shares could not, as it is not possible to buy just half a share. After the share split the same investor was able to buy Krka shares as one share became a ten times lower ownership stake in Krka, consequently with the value also ten times lower.

A similar situation applied when a shareholder needed e.g. EUR 500.00. This is an awkward situation, as the shareholder was forced to sell the whole share worth EUR 1,000.00 although the shareholder would be anxious to keep the amount which is not needed in shares.

The share split will create a broader investor base, and it will also make it easier to manage investments in Krka shares.

Practical example:

I have 20 Krka shares. Taking into account the share price on the market, i.e. approx. EUR 1,000.00 per share, my shares are worth ca. EUR 20,000.00. What will they be worth after the share split?

 The share split will not have a direct impact on the value of your investment in Krka shares. After the split the number of your shares will be ten times higher, and the value of one share ten times lower.

Number of shares 20 shares 20 shares x 10 = 200 shares
Price of 1 share EUR 1,000 EUR 1,000 / 10 = EUR 100
Value of investment 20 x EUR 1,000 = EUR 20,000 200 x EUR 100 = EUR 20,000