HOSPITALITY PROPERTY FUND LIMITED - Tsogo Sun To Acquire Control Of Hospitality Clean Out Dividend And Finalisation Announcement

Release Date: 23/09/2016 14:32
Code(s): HPB HPA
 
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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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