German auto giant Volkswagen AG has terminated its ADR program effective July Aug 13, 2018. The ADR traded under the ticker VLKAY for many years. Below is the news of the termination from the company’s site:

Volkswagen AG has reached the approved registration limit for the American Depositary Receipt (“ADR”) programs and decided not to renew them.  Volkswagen AG has notified JPMorgan Chase Bank, N.A., as Depositary, that it is terminating each of its sponsored ADR programs, effective August 13, 2018.

Source: Company Site

Full Details of the ADR termination can be found here.

However though the sponsored ADR program was terminated, an unsponsored version is trading on the OTC markets under the ticker VWAGY.

1.So if you hold the old sponsored ADRs (VLKAY) what to do now?

The ADR depository will cancel the sponsored ADRs on February 11, 2019. So holders of VLKAY have until that date to either exchange the ADRs for the unsponsored ADS(VWAGY) or exchange the ADRs for the ordinary shares listed on the German stock exchanges.

Between Aug 11, 2018 and February 11, 2019 the custodian is waiting the cancellation fees for ADR holders.

2.What is the exchange ratio from VLKAY to VWAGY?

Each sponsored ADR(VLAKY) will be exchanged to two VWAGY shares.

So 1 VLKAY = 2 VWAGY shares.

3.What is the ratio of unsponsored ADs to the ordinary share?

The ratio is 1: 10. Or each VWAGY represents one-tenth of one ordinary common share trading on German exchanges.

4) If I want to exchange my VLKAY for the ordinary shares, what is the exchange ratio?

Each sponsored ADR (i.e. VLKAY) is worth 5 ordinary shares traded on the German exchanges.

Disclosure: No Positions