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PLD - Paladin Capital Limited - Curro unbundling PALADIN CAPITAL LIMITED Incorporated in the Republic of South Africa (Registration number: 2007/032836/06) Share Code: PLD ISIN Number: ZAE000138970 ("Paladin" or "the Company") Curro unbundling Paladin ordinary shareholders ("Paladin shareholders") are referred to the SENS announcement dated 2 August 2011 regarding the unbundling by Paladin of its 77.54% ordinary shareholding in Curro Holdings Limited ("Curro Holdings") to Paladin shareholders (the "announcement"). On 15 August 2011, Paladin unbundled and distributed, in compliance with section 46 of the Companies Act, 2008 and in terms of section 46 of the Income Tax Act, 1962 ("the Income Tax Act"), 125 007 040 Curro Holdings ordinary shares ("Curro Holdings shares") to Paladin shareholders recorded as such in the shareholders register of Paladin on 19 August 2011 ("record date") subsequent to which each Paladin shareholder will receive 21.53126 Curro Holdings shares for every 100 Paladin shares held on the record date (the "Unbundling"). The unbundling in terms of section 46 of the Income Tax Act will not have any tax consequence for the shareholders of Paladin other than having a new cost for tax purposes ("tax cost") for their Paladin shares as indicated below. In terms of section 46 of the Income Tax Act the original tax cost for the Paladin shares must be apportioned between the Paladin shares and the unbundled Curro Holdings shares and the purpose of this announcement is to notify Paladin shareholders of the apportionment ratio. For Paladin shares held on trading account, the tax cost to be apportioned will be equal to the original expenditure incurred in respect of such Paladin shares, as contemplated in the relevant sections of the Income Tax Act. The tax cost (i.e. base cost for Paladin shares held on capital account) will be determined on a similar basis. The apportionment ratio The tax cost must be apportioned in the ratio of 61.46% relating to a Paladin share held after the Unbundling and 38.54% relating to an unbundled Curro Holdings share ("apportionment ratio"). The apportionment ratio is based on Paladin`s closing share price of R1.82 per share and Curro Holdings` closing share price of R5.30 per share as at 15 August 2011. Paladin 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. PSG Group offer to Paladin minorities Subsequent to the Curro unbundling referred to above, PSG Group Limited ("PSG Group") made an offer to acquire the entire issued share capital of Paladin in exchange for either a cash payment or the issue of PSG Group shares ("the Scheme") through a scheme of arrangement. The tax treatment of Scheme participants is dependent on their individual circumstances and on the tax jurisdiction applicable to such Scheme participants. It is recommended that the Scheme participants seek appropriate advice in this regard. The following guide on the tax consequences of the Scheme for South African resident Paladin Shareholders has been set out for illustrative purposes only and should not be construed as tax advice by either PSG Group or Paladin. The tax consequences for Paladin Shareholders will depend on whether they elect to receive the Share Consideration or the Cash Consideration. Share Consideration Paladin Shareholders that elect to receive the Share Consideration will automatically qualify for roll-over relief in terms of section 42 of the Income Tax Act to the extent that the value of the PSG Shares equals or exceeds the cost of the Paladin Shares (determined according to the apportionment in respect of the Curro unbundling) disposed of by the respective Paladin Shareholders. In terms of the roll-over relief, the relevant Paladin Shareholders shall be deemed to have disposed of their Paladin Shares for proceeds equal to the base cost thereof. The application of section 42 of the Income Tax Act will therefore result in there being no immediate tax charge for the relevant Paladin Shareholders as such liability is rolled over. The cost of the Paladin Shares so disposed of will be attributed to the PSG Shares acquired in terms of the Scheme. Cash Consideration For Paladin Shareholders that elect to receive the Cash Consideration, the disposal will be an outright disposal of the shares by such Shareholder. Therefore if the Paladin Shares were held by such Shareholder on capital account, such disposal will be subject to capital gains tax and the Paladin Shareholder must account for a capital gain or loss on the difference between the tax cost of such shares and the Cash Consideration. Should the Paladin Shareholder hold the shares as trading stock, such Paladin Shareholder would have to account for any differentials between the tax cost of such shares and the Cash Consideration for Income Tax purposes. Special rules apply to Collective Investment Schemes and these Shareholders must also consult their professional advisors on the tax treatment of the Cash Consideration in regards to their specific circumstances. None of Paladin, PSG Group, PSG Capital or their advisors take any responsibility nor will they be held liable for any loss or damaged suffered by any Paladin Shareholder or any other person due to the tax consequences set out above differing to the actual tax consequences applicable to any respective Paladin Shareholder. Stellenbosch 22 August 2011 Corporate adviser PSG Capital Designated adviser QuestCo Sponsors (Pty) Limited Date: 22/08/2011 17:39:01 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.
