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Foreign cash dividend of R0.50 with election to utilise proceeds of dividend to subscribe for new shares
Tradehold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1970/009054/06)
JSE code: TDH
ISIN: ZAE000152658
(“Tradehold” or the “Company”)
A FOREIGN CASH DIVIDEND TO ORDINARY SHAREHOLDERS OF R0.50 PER SHARE WITH AN
ELECTION TO UTILISE THE PROCEEDS OF THE DIVIDEND TO SUBSCRIBE FOR NEW SHARES IN
TRADEHOLD
1. INTRODUCTION
Shareholders are advised that the board of directors of Tradehold (“the Board”) has declared a gross cash
dividend of R0.50 (“Cash Dividend”) per Tradehold ordinary share (“Share”) to its ordinary shareholders
recorded in the Company’s share register at the close of business on the record date, being Friday, 15 June
2018 (“Record Date”).
The net Cash Dividend after deducting dividend tax (“DT”) of 20%, if applicable, will be R0.40 (“Proceeds”).
Shareholders may elect to subscribe for new Tradehold ordinary shares (“New Shares”) by utilising all or
part of the Proceeds to which they are entitled.
Shareholders not electing to subscribe for the New Shares will, without any action on their part, receive the
Cash Dividend.
All of the Cash Dividend will be funded from the Company’s cash resources.
2. RATIONALE
The Board is of the view that the declaration of a cash dividend with the option to apply the Proceeds to
subscribe for New Shares is a prudent manner in which to manage the Company’s balance sheet in a
period of economic uncertainty. The option to subscribe for New Shares provides a cost effective
opportunity for shareholders to increase their shareholding, while strengthening the Company’s balance
sheet and accelerating the planned reduction in its gearing metrics over the medium term.
3. TERMS OF THE CASH DIVIDEND AND SUBSCRIPTION FOR NEW SHARES ALTERNATIVE
Shareholders will receive the Cash Dividend, if and to the extent that such Shareholders have not elected to
apply the Proceeds to subscribe for the New Shares. Shareholders are, however, entitled to elect to apply all
or part of their Proceeds to subscribe for New Shares by 12h00 on the Record Date.
The number of New Shares to which each of the shareholders will become entitled is determined as follows:
- The re-investment share price (or New Share subscription price) of a Share will be the volume weighted
average price (“VWAP”) of a Share traded on the JSE during the 5-day trading period ending at the
close of business on , Friday, 1 June 2018.
- Once the re-investment share price (or New Share subscription price) is known, it is possible to calculate
the number of New Shares which the Company will issue for each Share in respect of which an election
to subscribe for New Shares is made, being the ratio of entitlement.
- The ratio of entitlement applicable to the New Shares will only be known at the end of business on 1
June 2018, and will be released on the finalisation date on SENS on Monday, 4 June 2018 and
published in the press on Tuesday, 5 June 2018. It is calculated as the ratio that the Cash Dividend per
Share bears to the re-investment share price.
- Where the application of this ratio of entitlement gives rise to a fraction of a Share, the rounding
principles described in paragraph 4 below will be applied.
The following serves as an example of the application of the above:
Cash Dividend of R0.5 per share if a 100 shares are held : R0.5 x 100 = R50
DT @ 20% (assuming no exemption available) : R10
Cash available to re-invest in New Shares : R40
Re-investment share price: 5-day VWAP : R15
Portion of Cash Dividend applied to subscribe for New Shares : 100%
Number of New Shares to be issued : 2 (equalling R30)
Cash Dividend paid out in respect of fractional entitlements : R10
This formula ensures that all shareholders are treated equally from an economic perspective, irrespective of
whether they receive cash or elect to apply such Proceeds to subscribe for New Shares.
4. FRACTIONS
The JSE Limited (“JSE”) does not permit fractions and fractional entitlements of shares. Accordingly, where
a shareholder’s entitlement to New Shares calculated in accordance with the above formula gives rise to a
fraction of a New Share, such fraction of a New Share will be rounded down to the nearest whole number,
resulting in allocations of whole Shares and a cash payment for the fraction.
The applicable cash payment for any fraction arising in terms hereof is determined with reference to the
VWAP of a Share traded on the JSE during the 5-day trading period ending at the close of business on
Friday, 1 June 2018.
5. TAX IMPLICATION
The Cash Dividend (irrespective of whether paid out in cash or applied to subscribe for the New Shares) is
likely to have tax implications for both resident and non-resident shareholders. The following is not tax advice
and is only a summary of the salient tax principles typically applicable in the below mentioned instances.
Shareholders are therefore encouraged to consult their professional tax advisors if they are in any doubt as to
the appropriate action to take.
5.1 in the case of South African shareholders:
5.1.1 In terms of the Income Tax Act, No. 19 of 2012 (“Income Tax Act”), as amended, the Cash
Dividend (irrespective of whether paid in cash or applied to subscribe for New Shares) will,
unless it qualifies for an exemption, be subject to DT. South African resident Shareholders
that are liable for DT will be subject to DT at a rate of 20% of the Cash Dividend and this
amount will be withheld from the Cash Dividend by the Company. The net dividend per share
after DT, if applicable, will be R0.40 cents.
5.1.2 The subsequent disposal of New Shares obtained by applying the Proceeds (as is the case
with existing Shares) is likely to have income tax or capital gains tax implications for the
shareholders. Where proceeds realised from the disposal of New Shares in future are of a
capital nature, the base cost of such Shares will be an amount equal to so much of the
proceeds from the Cash Dividend applied by that shareholder to subscribe for such Shares
for purposes of paragraph 20 of the Eighth Schedule to the Income Tax Act (or the value at
which such Shares will be included in the determination of the weighted average base cost
method will be the amount of the Cash Dividend applied to subscribe for such shares).
Shareholders should confirm the tax implications where any such Shares will be held on
revenue or trading account with their tax advisors.
5.2 in the case of foreign shareholders:
Shareholders who are not residents of South Africa for tax purposes are exempt from DT in respect of
any Cash Dividend (irrespective of whether paid out in cash or applied to subscribe for New Shares).
Such shareholders should consult their own professional advisors regarding their tax implications.
6. FOREIGN SHAREHOLDERS
The rights to receive the Cash Dividend and/or to apply the Proceeds to subscribe for New Shares (in the
alternative) in jurisdictions other than South Africa, may be restricted by law and any failure to comply with
these restrictions may constitute a violation of the securities laws of such jurisdictions. Accordingly,
shareholders who are not entitled to subscribe for New Shares, directly or indirectly, in those
jurisdictions are deemed to have elected not to subscribe for New Shares and to receive the Cash
Dividend. Such non-resident shareholders should inform themselves about and observe any applicable legal
requirements in such jurisdictions. It is the responsibility of non-resident shareholders to satisfy themselves as
to the full observance of the laws and regulatory requirements of the relevant jurisdictions in respect of the
subscription for New Shares, including the obtaining of any governmental, exchange control or other
consents or the making of any filing which may be required, compliance with other necessary formalities
and payment of any issue, transfer or other taxes or other requisite payments due in such jurisdictions.
Shareholders who have any doubts as to their position, including, without limitation, their tax status, should
consult an appropriate advisor in the relevant jurisdictions without delay.
7. CIRCULAR TO SHAREHOLDERS
A circular containing full details of the Cash Dividend and New Shares subscription alternative, will be made
available on Tradehold’s website (www.tradehold.co.za) and mailed to shareholders on Friday, 25 May
2018.
8. SALIENT DATES AND TIMES
Record date for Shareholders eligible to receive the circular Friday, 18 May 2018
Declaration Date for Cash Dividend or subscription for New Shares and announcement on SENS Thursday, 24 May 2018
Circular and Form of Election posted to Shareholders and announcement in press on Friday, 25 May 2018
Finalisation information including the ratio of entitlement applicable to the subscription for New
Shares and re-investment price, based on the 5 day volume weighted average price ending at the
close of business on Friday, 1 June 2018, released on SENS by 11h00 on Monday, 4 June 2018
Finalisation information including the ratio of entitlement applicable to the subscription for New
Shares and re-investment price, based on the 5 day volume weighted average price ending at the
close of business on Friday, 1 June 2018, published in the press on Tuesday, 5 June 2018
Last day to trade in order to be eligible for the Cash Dividend or to elect to subscribe for the New
Shares Tuesday, 12 June 2018
Shares trade “ex” the Cash Dividend on Wednesday, 13 June 2018
Last day to elect to subscribe for the New Shares by utilizing the Proceeds
Forms of Election to reach the Transfer Secretaries by 12h00 noon on Friday, 15 June 2018
Record Date in respect of the Cash Dividend and the New Shares subscription Friday, 15 June 2018
Listing and trading of maximum possible number of Shares on the JSE in terms of the New Shares
subscription from the commencement of business on Friday, 15 June 2018
Announcement relating to the results of the Cash Dividend and the New Shares subscription
released on SENS by 11h00 on Monday, 18 June 2018
Cash Dividend payments made to applicable Shareholders, CSDP/Broker accounts
credited/updated, as applicable, on Monday, 18 June 2018
Announcement relating to the results of the Cash Dividend and the New Shares subscription
published in the press on Tuesday, 19 June 2018
New Shares issued to applicable Dematerialised Shareholders on the Register and certificates
posted to applicable Certificated Shareholders Wednesday, 20 June 2018
JSE listing of Shares in respect of the New Shares subscription adjusted to reflect the actual number
of Shares issued in terms of the New Share subscription at the commencement of business on or about Thursday, 21 June 2018
All times provided above are South African local times. The above dates and times are subject to change. Any material
change will be announced on SENS.
Share certificates may not be dematerialised or rematerialised between Wednesday, 13 June 2018, and Friday, 15
June 2018, both days inclusive.
Shareholders electing to utilise the Proceeds to subscribe for New Shares in Tradehold are alerted to the fact that the
New Shares will be listed three (3) business days after the last day to trade (“LDT”) and that these New Shares can
only be traded three (3) business days after the LDT, due to the fact that settlement of the shares will be three (3)
business days after the Record Date, which differs from the conventional one (1) business day after the Record Date
settlement process.
24 May 2018
JSE Sponsor to Tradehold
Mettle Corporate Finance Proprietary Limited
Date: 24/05/2018 08:52:00 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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