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NIVEUS INVESTMENTS LTD - Base Cost of Niveus Investments shares and dividend tax information

Release Date: 21/09/2012 11:45
Code(s): NIV HCI     PDF:  
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Base Cost of Niveus Investments shares and dividend tax information

         NIVEUS INVESTMENTS LIMITED                    HOSKEN CONSOLIDATED INVESTMENTS LIMITED
    (Incorporated in the Republic of South Africa)        (Incorporated in the Republic of South Africa)
        Registration number: 1996/005744/06                   Registration number: 1973/007111/06
                   Share code: NIV                                       Share code: HCI
                ISIN: ZAE000169553                                    ISIN: ZAE000003257
               (“Niveus Investments”)                                         (“HCI”)


         BASE COST OF NIVEUS INVESTMENTS SHARES AND DIVIDENDS TAX INFORMATION


Shareholders of both HCI and Niveus Investments are referred to the previous SENS announcements, the
latest of which was released on 17 September 2012, in connection with the listing of Niveus Investments and
the Pro-rata Repurchase and Distribution. Words and expressions in this announcement shall bear the same
meaning as words and expressions defined in the previous SENS announcements.

The purpose of this announcement is to provide HCI shareholders, who elected to participate in the Pro-rata
Repurchase and Distribution, with information regarding the base cost of their Niveus Investments Shares and
with the relevant Dividends Tax information.

HCI Shareholders need to assess, based on their specific circumstances, whether they hold the HCI Shares on
income or capital account.

Various provisions contained in the draft Taxation Laws Amendment Bill 2012 (“TLAB”) will, if promulgated in
its current form, impact on the capital gains tax and dividends tax implications of the Pro-rata Repurchase and
Distribution. In particular and in addition to the issues noted below, in terms of the TLAB, there are various
dates in respect of the Pro-rata Repurchase and Distribution which should be considered for purposes of
determining the base cost of the Niveus Investments Shares and the quantum of the dividend. However, on
the basis that the closing price of the Niveus Investments Shares remained unchanged at R7.68 per share
from 14 September 2012 to 18 September 2012, the market value per Niveus Investments Share for capital
gains tax and dividends tax purposes should be R7.68 per share.

Capital gains tax:
HCI Shareholders will, in terms of the TLAB, be treated as having acquired the Niveus Investment Shares on
the date of distribution (as defined) for expenditure equal to the market value of such shares on that date,
which expenditure must be treated as an amount of expenditure actually incurred for capital gains tax
purposes. If the TLAB is promulgated in its current form, these provisions will apply to the transaction with
retrospective effect.

If these provisions are not passed, the HCI Shareholders will receive a base cost in the Niveus Investments
Shares equal to the market value of their HCI Shares which have been bought back as at the date of the Pro-
rata Repurchase and Distribution.

If the TLAB is passed, the base cost per Niveus Investments Share will be R7.68 per share.

If the TLAB is not passed, the base cost per Niveus Investments Share will be R7.74 per share being the
closing HCI share price of R92.50 on Friday, 14 September 2012 divided by 11.95191.

.
Dividends tax:
The distribution in specie of Niveus Investments Shares as consideration for the specific buy-back of HCI
shares does NOT constitute a reduction of contributed tax capital, but constitutes a dividend, and accordingly,
in respect of the new Dividends Tax (“DT”) effective 1 April 2012, the following additional information is
disclosed:
     • The amount of the dividend must be deemed to be equal to the market value of the Niveus
        Investments Shares distributed on the date that the dividend is deemed to be paid.
     • As noted above, the closing price per Niveus Investment Share remained unchanged from Friday, 14
        September 2012 to Tuesday, 18 September 2012 at R7.68 per share.
        The South African DT rate is 15%, unless reduced in terms of a double tax agreement. A dividend
        paid by a company is not subject to dividends tax to the extent that the dividend does not exceed the
        STC credit of the company and the company has, in terms of current law, by the date of payment
        notified the person to whom the dividend is paid of the amount by which the dividend reduces the STC

                                                      
        credit of the company. In terms of the TLAB, the required notice must be given within 21 days after
        the date of payment of the dividend.
        The total Secondary Tax on Companies (“STC”) credits utilised as part of this declaration amount to
        R370,202,473.
        The number of HCI Shares in issue at the date of this declaration is 132 976 996.
        The total STC credits utilised per HCI share that participated in the Pro-rata Repurchase and
        Distribution amounts to R91.79 and the total STC credits utilised per HCI Share that received Niveus
        Investments Shares in terms of the Excess Applications amounts to R91.79.
        On the basis that the dividend does not exceed the STC credit of HCI and that the required notice is
        given timeously, the dividend subject to DT is nil.
        Hosken Consolidated Investments Limited’s income tax reference number is 9050/177/71/7.

All shareholders should declare their status to their regulated intermediary as they may qualify for a reduced
DT rate or exemption in future.


Cape Town
21 September 2012

                 Investment bank                                              Sponsor
            Investec Corporate Finance                                  Investec Bank Limited

                 Legal advisers                                 Reporting accountants and auditors
          Edward Nathan Sonnenbergs Inc                                      PKF Inc




                                                      

Date: 21/09/2012 11:45:00 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.

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