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Tsogo Sun To Acquire Control Of Hospitality – Clean Out Dividend And Finalisation Announcement
HOSPITALITY PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/014211/06)
Share code for A shares: HPA
ISIN for A shares: ZAE000203022
Share code of B shares: HPB
ISIN for B shares: ZAE000203030
(Approved as a REIT by the JSE)
(“Hospitality” or “the company”)
TSOGO SUN TO ACQUIRE CONTROL OF HOSPITALITY – CLEAN OUT DIVIDEND AND FINALISATION ANNOUNCEMENT
Shareholders are referred to various announcements relating to the transaction in terms of which Tsogo Sun
Holdings Limited (“Tsogo Sun”) will acquire a controlling stake in Hospitality by vending a portfolio of ten
hotel properties into Hospitality in exchange for the issue of Hospitality ordinary shares (the “transaction”) and
the restructure of Hospitality’s dual-class share capital structure to a single-class share capital structure (the
“capital restructure”), the last of which was released by Hospitality on 20 September 2016.
CLEAN OUT DIVIDEND
Shareholders are advised that the board of directors has declared a dividend for the period from 1 July 2016 to
31 August 2016, payable to holders of A ordinary shares (“A shares”) only, of 9.28911 cents (gross) per
A share (the “clean out dividend”). The aggregate clean-out dividend represents the distributable profit of
Hospitality from the commencement of the 2017 financial year, being 1 July 2016, to the day immediately prior
to the effective date of the transaction, being 1 September 2016. In accordance with Hospitality’s distribution
policy, the A shares have a preferential claim to earnings with capped growth at the lesser of growth in the
Consumer Price Index or 5% and the B ordinary shares (“B shares”) receive the balance of the earnings. As a
result, no clean out dividend is payable to holders of B shares.
For the avoidance of doubt, the consideration shares to be issued to Southern Sun Hotels Proprietary Limited
(“SSH”) pursuant to the implementation of the transaction are to be issued ex entitlement to the clean out
dividend.
The clean out dividend meets the requirements of a qualifying distribution for the purposes of section 25BB of
the Income Tax Act 58 of 1962 (the “Income Tax Act”). Hospitality’s tax reference number is 9770/799/1/47.
The issued share capital of Hospitality at the declaration of the clean out dividend comprises 144 285 503
A shares of no par value and 144 285 503 B shares of no par value.
Local tax residents
Qualifying distributions received by local 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 provided the following forms to their
Central Securities Depository Participant (“CSDP”) or broker, as the case may be, in respect of uncertificated
shares, or the company, 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 company, as the case may be, should the
circumstances affecting the exemption change or the beneficial owner ceases to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Resident shareholders
are advised to contact their CSDP, broker or the company, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the clean out dividend, if such documents have
not already been submitted.
Non-resident
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. It should be noted that until 31 December 2013 qualifying distributions
received by non-residents were not subject to dividend withholding tax. From 1 January 2014, any qualifying
distribution received by a non-resident from a REIT will be subject to dividend withholding tax at 15%, 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 is withheld at
a rate of 15%, the net amount due to non-resident shareholders will be 7.89574 cents per A 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
uncertificated shares, or the company, 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 company, as the case may be, should the
circumstances affecting the reduced rate change or the beneficial owner ceases to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident
shareholders are advised to contact their CSDP, broker or the company, 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. Shareholders are requested to seek professional advice on the appropriate
action to take.
SALIENT DATES AND TIMES
The transaction and capital restructure, as well as payment of the clean out dividend, will be implemented in
accordance with the timetable set out below.
2016
Last day to trade in A and B shares on the JSE prior to the capital
restructure and in order to receive the clean out dividend Tuesday, 4 October
Consolidation of B shares under the existing share code HPB and
ISIN ZAE000214656, from the commencement of trade Wednesday, 5 October
Suspension of A shares under share code HPA and ISIN
ZAE000203022, from the commencement of trade Wednesday, 5 October
Reclassification of B shares as ordinary shares under the existing
share code HPB and ISIN ZAE000214656, from the commencement
of trade Wednesday, 5 October
Listing and commencement of trading of 144 285 503 Hospitality
ordinary shares (being the former A shares, now converted to
B shares and reclassified as ordinary shares) under the existing share
code HPB and ISIN ZAE000214656, such that the total number of
listed ordinary shares is approximately 185 509 932, from the
commencement of trade Wednesday, 5 October
A shares start trading ex the clean out dividend Wednesday, 5 October
Announcement on SENS of cash payment due to Hospitality
shareholders in terms of the fractional entitlement principle, Thursday, 6 October
determined with reference to the weighted average traded price of
B shares on the JSE on Wednesday, 5 October 2016, less 10%
Record date for implementation of the capital restructure and
participation in the clean out dividend (the “record date”) Friday, 7 October
Capital restructure becomes operative and is implemented Monday, 10 October
Dematerialised shareholders reflected in the register on the record
date have their accounts updated with ordinary shares and statements
of allocation posted to shareholders holding certificated shares
(provided their documents of title have been surrendered before
12:00 on Friday, 7 October 2016) Monday, 10 October
Clean out dividend paid to those A shareholders recorded in the
register on the record date Monday, 10 October
Listing of an additional 145 000 000 Hospitality ordinary shares (the
“consideration shares”) on the JSE, from the commencement of
trade Monday, 10 October
Consideration shares issued to SSH Tuesday, 11 October
Termination of listing of A shares, from the commencement of trade Tuesday, 11 October
Notes:
1. All dates and times are local dates and times in South Africa
2. Shares may not be dematerialised or rematerialised between Wednesday, 5 October 2016 and Friday,
7 October 2016, both days inclusive. In respect of dematerialised shareholders, the clean out dividend will be
transferred to such shareholders’ CSDP accounts/broker accounts on Monday, 10 October 2016. Certificated
shareholders’ clean out dividend payments will be posted on or paid to such shareholders’ bank accounts on or
about Monday, 10 October 2016.
23 September 2016
Corporate advisor and transaction sponsor to Hospitality
Java Capital
Corporate law and tax advisors to Hospitality
ENS Africa
Corporate advisor and transaction sponsor to Tsogo Sun
Investec Bank Limited
Corporate law advisor to Tsogo Sun
Tabacks
Date: 23/09/2016 02:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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