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Dividend With Election To Reinvest: Tax Treatment And Salient Dates
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share code: FVT ISIN: ZAE000203808
(Approved as a REIT by the JSE)
(“Fairvest” or “the Company”)
DIVIDEND WITH ELECTION TO REINVEST: TAX TREATMENT AND SALIENT DATES
Fairvest shareholders ("Shareholders") are referred to Fairvest's condensed consolidated results
for the six months ended 31 December 2020, as published on SENS today, 4 March 2021,
wherein Shareholders were advised that Fairvest's board of directors has approved and declared
an interim gross dividend, out of income reserves, of 10.59000 cents per share for the six-month
period ended 31 December 2020, payable to shareholders registered as such at the close of
business on Friday, 9 April 2021 ("Record Date").
Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest
the cash dividend of 10.59000 cents per share, in return for Fairvest ordinary shares ("Shares")
("Reinvestment Alternative"), failing which they will receive the cash dividend ("Cash
Dividend"). Further details regarding the Reinvestment Alternative will be set out in a circular to
Shareholders, to be issued on Thursday, 18 March 2021 (“Circular”).
The entitlement of Shareholders to elect to participate in the Reinvestment Alternative is subject
to Fairvest's board of directors, either itself or through a board sub-committee appointed to set
the pricing and terms of the Reinvestment Alternative, having the discretion to withdraw the
entitlement to elect the Reinvestment Alternative should market conditions warrant such action.
A withdrawal of the entitlement to elect the Reinvestment Alternative would be communicated to
Shareholders before the publication of the finalisation announcement on Thursday, 25 March
2021 by 11:00 a.m.
By electing the Reinvestment Alternative, Shareholders will be able to increase their shareholding
in Fairvest without incurring dealing costs. In turn, Fairvest will benefit from an increase in the
amount of Shareholders' funds available to support continued growth.
SALIENT DATES AND TIMES
Please see below the salient dates and times relating to the Cash Dividend and Reinvestment
Alternative:
SALIENT DATES AND TIMES 2021
Record date to determine which Shareholders are entitled to receive Friday, 12 March
the Circular
Circular and form of election posted to Shareholders Thursday, 18 March
Announcement of Reinvestment Alternative issue price, ratio and Thursday, 25 March
finalisation information on SENS
Last day to trade cum Reinvestment Alternative and Cash Dividend Tuesday, 6 April
Trading commences ex Reinvestment Alternative and Cash Dividend Wednesday, 7 April
Listing of maximum possible number of Shares to be issued under the Friday, 9 April
Reinvestment Alternative
Last day to elect to receive Reinvestment Alternative by 12:00 p.m. Friday, 9 April
(South African time) on
Record Date Friday, 9 April
Electronic payment and Central Securities Depository Participant Monday, 12 April
(“CSDP”)/broker accounts updated in respect of Cash Dividend
Announcement of the results of the Reinvestment Alternative and Cash Monday, 12 April
Dividend on SENS
Share certificates posted and CSDP/broker accounts updated in Wednesday, 14 April
respect of Reinvestment Alternative on or about
Adjustment of number of new Shares listed on or about Friday, 16 April
Notes:
1. Shareholders electing the Reinvestment Alternative, should note that settlement of the
Shares will occur 3 business days after the Record Date, which differs from the
conventional one business day after the record date settlement process.
2. Shares may not be dematerialised or rematerialised between Wednesday, 7 April 2021
and Friday, 9 April 2021, both days inclusive.
3. The above dates and times are subject to change. Any changes will be announced on
SENS.
TAX IMPLICATIONS
In accordance with Fairvest’s status as a Real Estate Investment Trust (“REIT”), shareholders are
advised that the dividend meets the requirements of a “qualifying distribution” for the purposes of
section 25BB of the Income Tax Act, No. 58 of 1962, as amended (“Income Tax Act”).
Qualifying distributions received by shareholders who are South African tax residents must be
included in the gross income of such shareholders (as a non-exempt dividend in terms of section
10(1)(k)(aa) of the Income Tax Act), with the effect that the qualifying distribution is taxable as
income in the hands of the shareholder. These qualifying distributions are, however, exempt from
dividend withholding tax in the hands of South African tax resident shareholders, provided that
the South African resident shareholders have provided the following forms to their CSDP or
broker, as the case may be, in respect of uncertificated Shares, or Fairvest’s transfer secretaries,
Computershare Investor Services Proprietary Limited (“Transfer Secretaries”), in respect of
certificated Shares:
(a) a declaration that the distribution is exempt from dividends tax; and
(b) a written undertaking to inform the CSDP, broker or the Transfer Secretaries, as
the case may be, should the distribution cease to be exempt from dividend
withholding tax,
both in the form prescribed by the Commissioner for the South African Revenue Service
(“SARS”) and shareholders are advised to contact their CSDP, broker or the Transfer
Secretaries, as the case may be, to arrange for the abovementioned documents to be
submitted prior to payment of the distribution, if such documents have not already been
submitted.
Qualifying distributions received by non-resident shareholders will not be taxable as income and
instead will be treated as ordinary dividends but which are exempt in terms of the usual dividend
exemptions per section 10(1)(k) of the Income Tax Act. Any qualifying distribution received by a
non-resident from a REIT will be subject to dividend withholding tax at 20%, unless the rate is
reduced in terms of any applicable agreement for the avoidance of double taxation (“DTA”)
between South Africa and the country of residence of the shareholder. Assuming dividend
withholding tax will be withheld at a rate of 20%, the net amount due to non-resident shareholders
will be 8.47200 cents per share. A reduced dividend withholding tax rate in terms of the applicable
DTA, may only be relied on if the non-resident shareholder has provided the following forms to
their CSDP or broker, as the case may be, in respect of the uncertificated Shares, or the Transfer
Secretaries, in respect of certificated Shares:
(a) a declaration that the dividend is subject to a reduced rate as a result of the
application of a DTA; and
(b) a written undertaking to inform their CSDP, broker or the Transfer Secretaries, as
the case may be, should the circumstances affecting the reduced rate change or
the beneficial owner cease to be the beneficial owner,
both in the form prescribed by SARS. Non-resident shareholders are advised to contact
their CSDP, broker or the Transfer Secretaries, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the distribution if such
documents have not already been submitted, if applicable.
Local tax resident shareholders as well as non-resident shareholders are encouraged to consult
their professional advisors should they be in any doubt as to the appropriate action to take.
FURTHER INFORMATION
Fractions
Trading in the electronic Strate environment does not permit fractions and fractional entitlements
in respect of Shares. Accordingly, should a Shareholder’s reinvestment in new Shares, calculated
in accordance with the ratio to be announced in the finalisation announcement, give rise to a
fraction of a new Share, such fraction will be rounded down to the nearest whole number, resulting
in the allocation of whole Shares and a payment to the Shareholder in respect of the remaining
cash amount due to that Shareholder under the dividend. Certificated Shareholders whose bank
account details are not held by the Transfer Secretaries, are requested to provide such details to
the Transfer Secretaries to enable payment of the fraction due to the Shareholder in respect of
the Reinvestment Alternative. Should no details be on record, the funds will be held by the
Company until such time as the details have been provided and the cash fraction will be paid to
the Shareholder upon its request.
Foreign shareholders
The distribution of the Circular and/or accompanying documents and the right to elect the
Reinvestment Alternative in jurisdictions other than South Africa may be restricted by law and a
failure to comply with any of these restrictions may constitute a violation of the securities laws of
any such jurisdictions. The Shares have not been and will not be registered for the purposes of
the election under the securities laws of the United Kingdom, European Economic Area or EEA,
Canada, United States of America, Japan or Australia and accordingly are not being offered, sold,
taken up, re-sold or delivered directly or indirectly to recipients with registered addresses in such
jurisdictions.
Shares in issue at the date of declaration of the final distribution: 1 018 125 441
Fairvest income tax reference number: 9205/066/06/1
Cape Town
4 March 2021
Sponsor
PSG Capital
Date: 04-03-2021 07:16:00
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