FAIRVEST PROPERTY HOLDINGS LIMITED - Dividend with Election to Reinvest: Tax Treatment and Salient Dates

Release Date: 04/09/2018 07:06
Code(s): FVT
 
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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


Fairvest shareholders (“Shareholders”) are referred to Fairvest’s audited summarised consolidated results
for the year ended 30 June 2018, as published on SENS today, 4 September 2018, wherein Shareholders
were advised that Fairvest’s board of directors has approved and declared a final gross distribution, out
of income reserves, of 10.344 cents per share for the six-month period ended 30 June 2018, payable to
shareholders registered as such at the close of business on Friday, 5 October 2018 (“Record Date”).

Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the cash
dividend of 10.344 cents per share, in return for Fairvest ordinary shares (“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 September 2018.

The entitlement of Shareholders to elect to participate in the Reinvestment Alternative is subject to the
Fairvest’s board of directors, 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 Friday, 21 September 2018 by 11:00.

By electing the Reinvestment Alternative, Shareholders will be able to increase their shareholding in
Fairvest without incurring dealing costs. In turn, Fairvest will benefit from an increase in the amount of
Shareholders’ funds available to support continued growth.



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, 7 September

 Circular and form of election posted to Shareholders                                                  Friday, 14 September

 Announcement of Reinvestment Alternative issue price, ratio and finalisation information on           Friday, 21 September
 SENS

 Last day to trade cum Reinvestment Alternative and Cash Dividend (“LDT”)                                Tuesday, 2 October

 Trading commences ex Reinvestment Alternative and Cash Dividend                                     Wednesday, 3 October

 Listing of maximum possible number of Shares to be issued under the Reinvestment                          Friday, 5 October
 Alternative

 Last day to elect to receive Reinvestment Alternative by 12:00 (South African time) on                    Friday, 5 October

 Record Date                                                                                               Friday, 5 October

 Electronic payment and CSDP/broker accounts updated in respect of Cash Dividend                         Monday, 8 October

 Announcement of the results of the Reinvestment Alternative and Cash Dividend on SENS                   Monday, 8 October

 Share certificates posted and CSDP/broker accounts updated in respect of Reinvestment              Wednesday, 10 October
 Alternative on or about

 Adjustment of number of new Shares listed on or about                                                    Friday, 12 October
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, 3 October 2018 and Friday, 5 October 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 Real Estate Investment Trust (“REIT”), Shareholders are advised
that the dividend meets the requirements of a “qualifying distribution” for the purposes of section 25BB
of the Income Tax Act, No. 58 of 1962 (“Income Tax Act”).

Qualifying distributions received by Shareholders who are South African 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 Fairvest’s transfer secretaries (“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,
    should the distribution cease to be exempt from dividend withholding tax.
both in the form prescribed by the Commissioner for the South African Revenue Service (“SARS”) and
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 8.2752 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 SARS. 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
Fractions

Trading in the electronic Strate environment does not permit fractions and fractional entitlements in
respect of shares. Accordingly, should a Shareholder’s reinvestment in new Shares, calculated in
accordance with the ratio to be announced in the finalisation announcement, give rise to a fraction of a
new Share, such fraction will be rounded down to the nearest whole number, resulting in the allocation
of whole Shares and a payment to the Shareholder in respect of the remaining cash amount due to that
Shareholder under the dividend. Certificated Shareholders whose bank account details are not held by
the Transfer Secretaries, 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.
Foreign shareholders

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: 991 020 553

Fairvest income tax reference number: 9205/066/06/1



4 September 2018

Cape Town



Sponsor

PSG Capital

Date: 04/09/2018 07:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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