Under the plan, announced by CFR on 8th August, the core luxury goods business will be retained in Geneva, Switzerland, and a separate investment vehicle will be set up and listed on the Luxembourg Stock Exchange. This restructuring will result in the distribution of 90% of Richemont's interest in British American Tobacco (BAT) to its shareholders.

"The necessary PC-holder and shareholder approvals having been obtained at meetings held on 8 and 9 October respectively, Compagnie Financière Richemont SA and Richemont SA (RSA) will proceed with the restructuring of their businesses to create a focused luxury goods business and a separately-listed investment vehicle, as previously announced," CFR explained in a statement published on October 9.

The company has said that the planned changes to tax legislation in Luxembourg would make the current group structure "significantly less attractive" to unitholders from 31 December 2010 onwards, when the '1929' holding regime is finally abolished.

The 1929 laws exempted qualifying companies from corporate income tax, withholding tax on dividend payments and certain other Luxembourg taxes. However, the regime fell foul of the European Union's state aid rules, which seek to banish tax breaks or subsidies biased to single regions or industries, because they granted "unjustified tax advantages" to providers of certain financial services who set up holding structures in Luxembourg.

The government of Luxembourg reluctantly announced the termination of the legislation on January 1, 2007. However, pre-existing publicly listed companies can continue to benefit from the regime until December, 31 2010.

CFR said that the the Richemont units will be de-twinned on October 20, as previously announced. As a result, the company will continue to be headquartered in Geneva, Switzerland, and it is expected to remain in the blue-chip SMI index on the Swiss Exchange. RSA will be converted into a Luxembourg-listed investment vehicle, to be renamed Reinet Investments SCA, which will focus on long term capital growth.