To view the PDF file, sign up for a MySharenet subscription.

RMH - RMB Holdings Limited - Apportionment of cost for taxation and/or capital

Release Date: 16/03/2011 15:17
Code(s): RMH
Wrap Text

RMH - RMB Holdings Limited - Apportionment of cost for taxation and/or capital gains tax purposes in respect of the unbundling by RMBH of its 100% ordinary shareholding in Rand Merchant Insurance Holdings Limited RMB Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1987/005115/06) (Share Code: RMH) (ISIN: ZAE000024501) ("RMBH" or "the Company") APPORTIONMENT OF COST FOR TAXATION AND/OR CAPITAL GAINS TAX PURPOSES IN RESPECT OF THE UNBUNDLING BY RMBH OF ITS 100% ORDINARY SHAREHOLDING IN RAND MERCHANT INSURANCE HOLDINGS LIMITED ("RMI HOLDINGS") 1. Introduction RMB Holdings Limited ordinary shareholders ("RMBH shareholders") are referred to the circular dated 3 February 2011 regarding the restructuring of the Company including the unbundling by RMBH of its 100% ordinary shareholding in RMI Holdings to RMBH shareholders (the "circular"). On 14 March 2011, RMBH unbundled and distributed, in compliance with section 90 of the Companies Act, 1973 and in terms of section 46 of the Income Tax Act, 1962 ("Income Tax Act"), 1 351 290 313 RMI Holdings ordinary shares ("RMI Holdings shares") to RMBH shareholders recorded as such in the shareholders register of RMBH on 11 March 2011 ("record date") such that each RMBH shareholder received one RMI Holdings share for every RMBH ordinary share held on the record date (the "Unbundling"). As detailed in annexure 6 to the circular, RMBH shareholders will have a combined expenditure ("combined expenditure") in respect of their RMBH ordinary shares ("retained RMBH shares") and the RMI Holdings shares received pursuant to the Unbundling ("unbundled RMI Holdings shares"). For retained RMBH shares held on trading account, the combined expenditure will be equal to the original expenditure incurred in respect of such retained RMBH shares, as contemplated in section 11(a), section 22(1) or section 22(2) of the Income Tax Act. For retained RMBH shares held on capital account, the combined expenditure will be equal to the original expenditure incurred in respect of such retained RMBH shares, as contemplated in paragraph 20 of the Eighth Schedule to the Income Tax Act. The purpose of this announcement is to notify RMBH shareholders of the apportionment ratio to be applied to the combined expenditure in determining the portion of the combined expenditure to be allocated to the unbundled RMI Holdings shares and the retained RMBH shares. 2. The apportionment ratio The ratio of the respective market values of a retained RMBH share held after the Unbundling and an unbundled RMI Holdings share on the JSE as at close of trade on Tuesday, 15 March 2011 was 68.23% relating to a retained RMBH share held after the Unbundling and 31.77% relating to an unbundled RMI Holdings share ("apportionment ratio"). The apportionment ratio was calculated with reference to the closing share prices of a retained RMBH share and a RMI Holdings share on the JSE on Tuesday, 15 March 2011 of R24.38 and R11.35 respectively. The apportionment ratio is to be used to apportion the combined expenditure between the unbundled RMI Holdings shares and the retained RMBH shares for the determination of profits and losses, of a capital or trading nature, to be derived on any future disposals of the unbundled RMI Holdings shares and/or the retained RMBH shares. Similarly, the apportionment ratio is also to be used to apportion the capital gains tax valuation (where applicable) of the retained RMBH shares, as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act, between the unbundled RMI Holdings shares and the retained RMBH shares. Finally, in determining the base cost for the unbundled RMI Holdings shares and the retained RMBH shares for capital gains tax purposes, RMBH shareholders are deemed to have acquired both the retained RMBH shares and the unbundled RMI Holdings shares on the dates on which the retained RMBH shares were originally acquired. RMBH shareholders are advised to consult their own tax advisors should they have any queries regarding the taxation consequences of the Unbundling and the calculation of their costs for taxation purposes. 16 March 2011 Merchant bank and transaction sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Legal advisors Webber Wentzel Independent sponsor PricewaterhouseCoopers Corporate Finance (Proprietary) Limited Date: 16/03/2011 15:17:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

Share This Story