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Cash payment in respect of fractional entitlements
RAND MERCHANT INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2010/005770/06)
JSE ordinary share code: RMI
ISIN: ZAE000210688
(“RMI” or the "Company")
CASH PAYMENT IN RESPECT OF FRACTIONAL ENTITLEMENTS
The ordinary shareholders of the Company ("RMI Shareholders") are referred to the Company’s
summarised audited results announcement including the dividend declaration for the year ended
30 June 2017 published on the Stock Exchange News Service (“SENS”) of the JSE Limited (“JSE”) on
19 September 2017.
The Company declared a final gross cash dividend of 65 cents per ordinary share for the financial year
ended 30 June 2017 ("Cash Dividend") and provided RMI Shareholders an alternative, the
implementation of which was subject to the approval of RMI shareholders, to elect to (i) receive fully
paid up RMI ordinary shares with a par value of R0.0001 (“RMI Shares”) in the Company in lieu of the
Cash Dividend (“Scrip Distribution Alternative”); or (ii) reinvest all or part of the Cash Dividend (net
of any applicable taxes) (subscription value) in RMI Shares by RMI (a) crediting such subscription
value to RMI Shareholders; and (b) applying such credit on behalf of RMI Shareholders to subscribe
for reinvestment shares (“Reinvestment Option”), in respect of all or a part of their shareholding
recorded in RMI’s securities register at 12:00 on the record date, being Friday, 6 October 2017
(“Record Date”). The ordinary resolution necessary to support the RMI board of directors’ stated
intention of making available to RMI Shareholders the Scrip Distribution Alternative and the
Reinvestment Option was proposed in terms of the section 60 of the Companies Act, 71 of 2008, was
supported by sufficient RMI Shareholders entitled to exercise voting rights and adopted on
19 September 2017.
The ratio of the Scrip Distribution Alternative and the Reinvestment Option has been determined
with reference to such RMI Shareholder’s ordinary shareholding in RMI (at 12:00 on the Record Date)
in relation to the ratio that 65 cents or the Cash Dividend (net of any applicable taxes), in the Scrip
Distribution Alternative or Reinvestment Option, respectively, bears to the issue price being R38.00
per share, which is a 3.9% discount to the closing price on Friday, 15 September 2017 for RMI
Shareholders electing such option.
The number of capitalisation shares which RMI Shareholders may elect to receive under the Scrip
Distribution Alternative has been determined in the ratio of 1.71053 fully paid RMI Shares for every
100 RMI Shares held on the Record Date.
The reinvestment shares will be issued in consideration for the amount of the Cash Dividend (net of
any applicable taxes) as elected to be reinvested by RMI Shareholders.
The number of reinvestment shares which RMI Shareholders may elect to receive under the
Reinvestment Option, assuming RMI Shareholders are liable for the full local 20% dividends tax, has
been determined in the ratio of 1.36842 reinvestment shares for every 100 RMI Shares held on the
Record Date. If no dividends tax is payable, the number of reinvestment shares which RMI
Shareholders may elect to receive under the Reinvestment Option has been determined in the ratio
of 1.71053 reinvestment shares for every 100 RMI Shares held on the Record Date.
Trading in the electronic settlement environment operated by Strate Proprietary Limited does not
permit fractions and fractional entitlements.
The JSE Listings Requirements contains a fractional entitlement principle which provides that
fractional entitlements of shares will be rounded down to the nearest whole number and a cash
payment will be paid for the fractional entitlement at beneficial owner level.
Accordingly, where an RMI Shareholder’s entitlement to new RMI Shares in respect of the Scrip
Distribution Alternative or the Reinvestment Option results in a fraction of a new RMI Share, such
fraction will be rounded down to the nearest whole number resulting in allocations of whole RMI
Shares to RMI Shareholders and a cash payment for the fraction will be made to such RMI
Shareholders (“Rounding Provision”).
The weighted average traded price for RMI Shares on Wednesday, 4 October 2017 (the “VWAP”) less
10% of such weighted average traded price has been be used as the cash value for fractional
entitlements to be paid to RMI Shareholders in accordance with the JSE Listings Requirements.
RMI Shareholders are accordingly advised that the basis applicable in determining the cash payment
of the fractional entitlement is 3738.95723 cents (i.e. 4154.39692 cents, being the VWAP, discounted
by 10%) and 2991.16578 cents, net of applicable 20% dividend withholding tax.
Examples of the fractional entitlement cash payments are set out below:
Example 1 - assumes that an RMI Shareholder holds 100 RMI Shares on the Record Date and elects
the Scrip Distribution Alternative:
New RMI Share entitlement = 1.71053 new RMI Shares.
The Rounding Provision described above is then applied and the RMI Shareholder will receive 1 new
RMI Share in respect of the 100 RMI Shares held and a cash payment for the fractional entitlement
of 0.71053 x 3738.95723 = 2656.64128 cents.
Assuming the fractional entitlement payment in respect of this example is subject to 20% dividend
withholding tax, the net cash payment will be 2125.31302 cents.
Example 2 - assumes that an RMI Shareholder holds 100 RMI Shares on the Record Date and elects
the Reinvestment Option and assuming the fractional entitlement payment is subject to 20%
dividend withholding tax:
New RMI Share entitlement = 1.36842 new RMI Shares.
The Rounding Provision described above is then applied and the RMI Shareholder will receive 1 new
RMI Share in respect of the 100 RMI Shares held and a cash payment for the (post tax) fractional
entitlement of 0.36842 x 3738.95723 = 1377.50662 cents.
Example 3 - assumes that an RMI Shareholder in respect of whom no dividend tax is payable holds
100 RMI Shares on the Record Date and elects the Reinvestment Option and the fractional
entitlement payment is not subject to dividend withholding tax:
New RMI Share entitlement = 1.71053 new RMI Shares.
The Rounding Provision described above is then applied and the RMI Shareholder will receive 1 new
RMI Share in respect of the 100 RMI Shares held and a cash payment for the fractional entitlement
of 0.71053 x 3738.95723 = 2656.64128 cents.
Johannesburg
5 October 2017
Corporate broker, financial adviser and transaction sponsor
Deutsche Securities (SA) Proprietary Limited
Legal advisers
Webber Wentzel
Date: 05/10/2017 11:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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