Questions and answers - Dividend and redemption programme 2008

Here is a collection of common asked questions and answers regarding the Scania share dividend and redemption programme:

Why is Scania proposing a redemption of shares?
Scania’s robust earnings and cash flow have strengthened the company’s financial position. This enables Scania’s Board of Directors to propose an extra distribution of capital, beyond the regular dividend, through a redemption of shares.
The proposal should be viewed as one element in Scania’s aim of achieving a more efficient capital structure and thereby maximising value for you as a shareholder. A redemption of shares is, moreover, advantageous from a tax standpoint for most shareholders.

Scania will increase its net debt by means of the redemption. Wouldn’t it be better to keep the money in the company?
Scania strives to have the most efficient capital structure possible, i.e. the best balance between capital and debt, and to generate good returns for the shareholders.

Why doesn’t Scania invest the money in its operations instead of “distributing” it?
Even after the regular dividend and the redemption, Scania will have a sufficiently strong financial position and ample room for investing and continuing to grow.

What does a mandatory redemption of shares mean?
A mandatory redemption means that every shareholder becomes entitled to redeem shares for a cash consideration. In practice, this means that Scania pays out capital to its shareholders. The shares that are designated as redemption shares in the VPC system after completion of the share split are automatically redeemed for a predetermined cash consideration, without your having to do anything as a shareholder. It is a simple and effective way for Scania to distribute funds to its shareholders.

As a shareholder, do I need to do anything?
You do not need to do anything. Scania will automatically redeem your redemption shares for a cash consideration of SEK 7.50 per redemption share.

Why is the redemption procedure mandatory?
A mandatory redemption procedure is relatively simple and cost-effective, since it occurs automatically and does not require any action from the shareholders.

How many shares will I have?
After redemption has been completed, you will have the same number of shares in Scania that you owned before the share split and redemption. All redemption shares are automatically redeemed.

What day is the record date for the share split?
The record date for the share split and entitlement to redemption shares is 20 May 2008.

As a shareholder, what options do I have?
Once the Annual General Meeting has given its approval, you can await the redemption
without having to do anything. The redemption shares you receive will then be automatically redeemed for SEK 7.50 per share in cash. You may also choose to sell your redemption shares before the redemption procedure is completed. Trading in redemption shares will occur on the OMX Nordic Exchange Stockholm between 21 May and 3 June 2008.

Where can I trade in redemption shares and when?
Redemption shares will be traded on the OMX Nordic Exchange Stockholm. Trading will occur between 21 May and 3 June 2008.

Why will there be trading in redemption shares?
One reason is that it may be advantageous from a tax standpoint for foreign shareholders to sell their redemption shares.

When and how is the redemption amount paid?
This amount will be paid around 12 June 2008. The money will be paid in the form of a deposit in the yield account that is linked to your VPC account.

What is the last day for buying shares to participate in the share split and receive redemption shares?
Scania shares will be traded including the entitlement to participate in the share split and to receive redemption shares until the end of trading on 15 May 2008. To participate in the share split and receive redemption shares, you need to be registered as a shareholder on the record date for the share split, which is proposed to be 20 May 2008.

How large will the redemption be?
The redemption will be SEK 7.50 per share.

What tax effects will the redemption have?
The tax effects for you as a shareholder depend on your specific situation. A bit simplified, as a Swedish shareholder you are taxed for the capital gain that arises upon redemption. In case you feel that you need to know more about the tax effects in you particular case, you should consult a tax advisor about what tax consequences may arise and how you should handle them.

• Swedish shareholders
If you are a tax resident of Sweden, a redemption share is regarded as sold upon redemption. In case a capital gain arises, you are taxed for the capital gain, in other words the portion of the redemption amount (SEK 7.50 per share) that exceeds your acquisition cost for the redemption share. When a Scania share is divided into two shares, of which one is a redemption share, a portion of the acquisition cost of the original share will be allocated to the Scania share and a portion to the redemption share. Alternatively, you may calculate the acquisition cost as 20 percent of the redemption amount.

• Foreign shareholders
If you are not a tax resident of Sweden, you normally have to pay withholding tax in Sweden on the amount disbursed on the redemption of shares. This applies regardless of whether you received the redemption shares in conjunction with a share split or whether you bought the redemption shares. The tax rate is 30 percent, but is generally reduced as provided by tax treaties between Sweden and other countries.

As a foreign shareholder, you may apply to the Swedish Tax Agency for a refund of a certain portion of the withholding tax that (after any reduction under the applicable tax treaty) is levied on the amount paid on redemption. You are entitled to a refund of the withholding tax that is attributable to your acquisition cost for the redeemed shares. This acquisition cost is calculated in the same way as for Swedish shareholders, that is, by an allocation of the acquisition cost of the original share or as 20 percent of the redemption amount.

As a foreign shareholder, if you instead choose to sell your redemption shares, no Swedish withholding tax is payable on the consideration you receive from the sale.

How large will the withholding tax be?
The size of the withholding tax for foreign shareholders may vary, depending on what country the shareholder is a resident of. For more information about withholding tax, please visit the Swedish Tax Agency’s website, www.skatteverket.se.