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Dividend with Election to Reinvest: Tax Treatment and Salient Dates
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/005011/06)
Share code: FVT ISIN: ZAE000203808
(Approved as a REIT by the JSE)
(“Fairvest”)
DIVIDEND WITH ELECTION TO REINVEST: TAX TREATMENT AND SALIENT DATES
Shareholders are referred to Fairvest’s summarised consolidated results for the six months ended
31 December 2017, as published on SENS today, 1 March 2018, wherein shareholders were advised that
Fairvest’s board of directors has approved and declared an interim gross distribution, out of income
reserves, of 9.806 cents per share for the six-month period ended 31 December 2017, payable to
shareholders registered as such at the close of business on Friday, 6 April 2018.
Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the cash
dividend of 9.806 cents per share, in return for Fairvest ordinary shares (“Reinvestment Alternative”),
failing which they will receive the cash dividend (“Cash Dividend”). Further details regarding the
Reinvestment Alternative will be set out in a circular to shareholders, to be issued on
14 March 2018.
The entitlement of shareholders to elect to participate in the Reinvestment Alternative is subject to the
board, either itself or through a board sub-committee appointed to set the pricing and terms of the
Reinvestment Alternative, having the discretion to withdraw the entitlement to elect the Reinvestment
Alternative should market conditions warrant such action. A withdrawal of the entitlement to elect the
Reinvestment Alternative would be communicated to shareholders before the publication of the
finalisation announcement on Thursday, 22 March 2018.
SALIENT DATES AND TIMES
Please see below the salient dates and times relating to the cash dividend and Reinvestment Alternative:
SALIENT DATES AND TIMES 2018
Record date to determine which shareholders are entitled to receive the circular
(“Circular”) Friday, 9 March
Circular and form of election posted to shareholders Wednesday, 14 March
Announcement of Reinvestment Alternative issue price, ratio and finalisation Thursday, 22 March
information on SENS
Last day to trade cum Reinvestment Alternative and Cash Dividend (“LDT”) Tuesday, 3 April
Trading commences ex Reinvestment Alternative and Cash Dividend Wednesday, 4 April
Listing of maximum possible number of shares to be issued under the Reinvestment
Alternative Friday, 6 April
Last day to elect to receive Reinvestment Alternative by 12:00 (South African time) on Friday, 6 April
Record Date Friday, 6 April
Electronic payment and CSDP/broker accounts updated in respect of Cash Dividend
on or about Monday, 9 April
Announcement of the results of the dividend on SENS Monday, 9 April
Share certificates posted and CSDP/broker accounts updated in respect of
Reinvestment Alternative on or about Wednesday, 11 April
Adjustment of number of new shares listed on or about Friday, 13 April
Notes:
1. Shareholders electing the Reinvestment Alternative, should note that settlement of the shares will occur 3 business days after
the Record Date, which differs from the conventional one business day after the record date settlement process.
2. Shares may not be dematerialised or rematerialised between Wednesday, 4 April 2018 and Friday, 6 April 2018, both days
inclusive.
3. The above dates and times are subject to change. Any changes will be announced on SENS.
TAX IMPLICATIONS
In accordance with Fairvest’s status as a REIT, shareholders are advised that the distribution meets the
requirements of a “qualifying distribution” for the purposes of section 25BB of the Income Tax Act, 58 of
1962 (“Income Tax Act”). The distribution on the shares will be deemed to be a dividend, for South African
tax purposes, in terms of section 25BB of the Income Tax Act. Accordingly, 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 have 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 transfer secretaries, 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 transfer secretaries, as the case may be,
both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are
advised to contact their CSDP, broker or the transfer secretaries, 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.
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. Any qualifying distribution received by a non-resident from a REIT
will be subject to dividend withholding tax at 20%, 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 will be withheld at a rate of 20%, the
net amount due to non-resident shareholders will be 7.8448 cents per 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 the
uncertificated shares, or the transfer secretaries, 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 transfer secretaries, as the case may be,
should the circumstances affecting the reduced rate change or the beneficial owner cease 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 transfer secretaries, 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.
Local tax resident shareholders as well as non-resident shareholders are encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action to take.
FURTHER INFORMATION
Trading in the Strate environment does not permit fractions and fractional entitlements. Where a
shareholder’s entitlement to the shares in relation to the Reinvestment Alternative, calculated in
accordance with the ratio to be announced in the finalisation announcement, gives rise to an entitlement
to a fraction of a new share, such fraction will be rounded down to the nearest whole number with the
cash balance of the dividend being paid to the shareholder. Certificated shareholders whose bank account
details are not held by the transfer secretaries, Computershare Investor Services, are requested to provide
such details to the transfer secretaries to enable payment of the fraction due to the shareholder in respect
of the Reinvestment Alternative. Should no details be on record, the funds will be held by the Company
until such time as the details have been provided and the cash fraction will be paid to the shareholder
upon its request.
The distribution of the Circular and/or accompanying documents and the right to elect the Reinvestment
Alternative in jurisdictions other than South Africa may be restricted by law and a failure to comply with
any of these restrictions may constitute a violation of the securities laws of any such jurisdictions. The
Shares have not been and will not be registered for the purposes of the election under the securities laws
of the United Kingdom, European Economic Area or EEA, Canada, United States of America, Japan or
Australia and accordingly are not being offered, sold, taken up, re-sold or delivered directly or indirectly
to recipients with registered addresses in such jurisdictions.
Shares in issue at the date of declaration of the final distribution: 861 100 145
Fairvest income tax reference number: 9205/066/06/1
1 March 2018
Cape Town
Sponsor
PSG Capital
Date: 01/03/2018 07:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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