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DEMERGER OF LONRHO AFRICA TAX UPDATE

Release Date: 12/03/1998 08:45
Code(s): LON
Wrap Text

ON 4TH MARCH, 1998, LONRHO POSTED A CIRCULAR TO SHAREHOLDERS IN RELATION TO THE
DEMERGER. IN THAT CIRCULAR ON PAGE 9 SHAREHOLDERS WERE INFORMED THAT, CONTRARY
TO ADVICE GIVEN TO LONRHO BY LEADING TAX COUNSEL, THE INLAND REVENUE HAD
PREFERRED AN OPINION WHICH (IF CORRECT) WOULD MEAN THAT SHAREHOLDERS WOULD BE
TREATED AS HAVING RECEIVED INCOME FOR UK TAX PURPOSES AND WOULD BE TAXED IN THE
SAME WAY AS IF THEY HAD RECEIVED A CASH DIVIDEND EQUAL TO THE VALUE OF THEIR
LONRHO AFRICA SHARES. IN ADDITION, LONRHO WOULD HAVE A SUBSTANTIAL LIABILITY TO
ACCOUNT FOR ADVANCE CORPORATION TAX.

YOUR BOARD IS PLEASED TO INFORM SHAREHOLDERS THAT SUBSEQUENT TO POSTING THE
DOCUMENTS RELATING TO THE DEMERGER AND FOLLOWING FURTHER CORRESPONDENCE THE
INLAND REVENUE HAS CONFIRMED THAT IT IS NOW MINDED TO ACCEPT LONRHO'S ANALYSIS
OF THE DEMERGER.
DATED 11 MARCH 1998

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