Wrap Text
Unbundling by Old Mutual of the Majority of its Shareholding in Nedbank
Old Mutual Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2017/235138/06)
ISIN: ZAE000255360
JSE Share Code: OMU
NSX Share Code: OMM
("Old Mutual")
LEI: 213800MON84ZWWPQCN47
Ref 52/18
26 September 2018
UNBUNDLING BY OLD MUTUAL OF THE MAJORITY OF ITS SHAREHOLDING IN NEDBANK
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE IT IS
UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.
The definitions contained in Part IV of this announcement apply to this entire announcement, except
where otherwise indicated.
This announcement does not constitute an offer or form part of any offer or invitation to purchase,
subscribe for, sell or issue, or a solicitation of any offer to purchase, subscribe for, sell or issue, any
securities (whether pursuant to this announcement or otherwise) in any jurisdiction, including an offer to
the public or section of the public in any jurisdiction. This announcement does not comprise a prospectus
or a prospectus equivalent announcement.
Peter Moyo, CEO of Old Mutual, will host a conference call for investors today, Wednesday,
26 September 2018, at 5:00 p.m. (SA time) to discuss the developments at Old Mutual. Those wishing to
join the conference call can do so using the details below. Participants are advised to allow 15 minutes for
registration prior to commencement at 5:00 p.m. (SA time).
South Africa: +27 21 672 4118
UK: +44 33 3300 0804
PIN code: 14681431#
Audio playback will be available for 30 days after the event on the following numbers.
South Africa: +27 21 672 4123
UK: +44 33 3300 0819
PIN code: 301246956#
PART I EXPLANATORY NOTE FROM THE OLD MUTUAL BOARD
The Old Mutual Board is pleased to announce that Old Mutual will unbundle the majority of its
shareholding in the issued share capital of Nedbank on Monday, 15 October 2018, in line with the
anticipated timeline previously communicated by Old Mutual plc to its shareholders on 20 April 2018. In
consultation with Nedbank and following engagement with our advisors, we believe that now is the
appropriate time to complete this distribution. This announcement sets out the necessary information for
Old Mutual Shareholders regarding the Nedbank Unbundling and the key dates for noting.
Overview of Nedbank Unbundling
Rationale for distribution
The Nedbank Unbundling is the final step of the Managed Separation, which was materially completed
during the six months ended 30 June 2018. The Old Mutual Board believes that the Nedbank Unbundling
continues to be in the best interests of Old Mutual Shareholders as it:
- allows investors to participate in the substantially different investment cases of Old Mutual and
Nedbank;
- provides a substantial return of capital to Old Mutual Shareholders; and
- supports the efficient allocation of capital and underpins mutually beneficial arm's length
commercial arrangements through the retention of a minority stake of 19.9% in Nedbank in the
Group's shareholder funds.
Each qualifying Old Mutual Shareholder will receive Nedbank Shares (which are listed on the
Johannesburg Stock Exchange and the Namibian Stock Exchange) in the ratio illustrated below:
For every 100 3.21176
Old Mutual => Nedbank
Shares Shares
Shares held in Old Mutual will be unaffected. Other than as detailed below, if you are an Old Mutual
Shareholder as at the Record Time, Nedbank Shares will be distributed to you in addition to the Old
Mutual Shares held by you as at the Record Time.
The distribution of Nedbank Shares to Old Mutual Shareholders could result in fractional entitlements for
recipients. For example, if you hold 100 Old Mutual Shares, you will receive 3 Nedbank Shares and a
fractional entitlement to 0.21176 of a Nedbank Share. If you hold 1,000 Old Mutual Shares, then you will
receive 32 Nedbank Shares and a fractional entitlement to 0.1176 of a Nedbank Share. You will receive
cash in respect of this fractional entitlement. Refer to paragraph 3.2 of Part II below for more detail on the
treatment of such fractional entitlements.
Certain restricted Old Mutual Shareholders will have their entitlements to Unbundled Nedbank Shares
sold for cash and the proceeds distributed to them. Refer to paragraph 2 of Part III of this announcement
for more information.
The Nedbank Unbundling will take place on Monday, 15 October 2018. Refer to paragraph 3.3 of Part II
below for the detailed expected timeline.
Based on the Nedbank Share price on the Johannesburg Stock Exchange on the Last Practicable Date,
the total distribution to Old Mutual Shareholders is approximately R43.2 billion.
The Nedbank Unbundling was approved by Old Mutual plc shareholders as part of the scheme of
arrangement in terms of which the Managed Separation was approved. Approvals for the Nedbank
Unbundling were also received from all applicable regulators and stock exchanges as part of the
Managed Separation regulatory engagement process.
Impact of the Nedbank Unbundling on key financial metrics
The financial information presented below is the responsibility of the directors of Old Mutual and has been
based on the most recently published Interim Results of Old Mutual for the six months ended 30 June
2018. The impact of the Nedbank Unbundling has been calculated using the financial information and
accounting policies as disclosed in the Interim Results of Old Mutual for the six months ended 30 June
2018 and the Nedbank Share price on the Last Practicable Date. Shareholders are advised that the
financial information included in this announcement has not been reviewed or reported on by the Group's
auditors.
The financial information has been prepared to illustrate the impact of the Nedbank Unbundling on certain
key financial metrics of the Group, and is therefore included for illustrative purposes only and due to the
nature thereof does not reflect the actual financial position or results of Old Mutual. No account has been
taken of the trading results or other changes in the financial position since 30 June 2018 except for the
adjustments in respect of the Nedbank Unbundling.
Unaudited pro forma financial Notes 6 months Impact of Pro forma
information ended 30 June Nedbank 6 months
2018 Unbundling ended 30 June
2018
Adjusted Headline Earnings ("AHE") 1
5,393 - 5,393
(Rm)1
Return on Net Asset Value 1
17.5% - 17.5%
("RoNAV")
Group Solvency ratio1 1 164% - 164%
IFRS profit after tax attributable to 2
10,648 22,155 32,803
equity holders of the parent (Rm)2
Total Equity (Rm)3 3 151,957 (61,749) 90,207
Notes to the unaudited pro forma financial information
1. There is no impact to the AHE and RoNAV outcomes and the Group Solvency ratio as these measures
have previously been disclosed in Old Mutual's 2018 Interim Results on the basis that the Nedbank
Unbundling had already occurred. For the six months ended 30 June 2018, these disclosures are
available in Old Mutual's 2018 Interim Results. For the 2017, 2016 and 2015 financial years, these
disclosures were included in the pre-listing statement in respect of Old Mutual which is available on Old
Mutual's website at www.oldmutual.com.
2. The illustrative impact to IFRS profit after tax attributable to equity holders of the parent for the six
months ended 30 June 2018 of R22,155 million comprises the following components:
- A profit of R24,439 million on the deemed distribution of all Nedbank Shares owned by Old
Mutual. The profit is calculated as the difference between the market value and the consolidated
net asset value of Nedbank Shares on the Distribution Date.
- A decrease of R2,284 million in IFRS profit after tax for the 6 months ended 30 June 2018. A
lower portion of profit after tax will be included in Old Mutual's results, reflecting this change in
ownership going forward. The IFRS profit after tax for the 6 months ended 30 June 2018 includes
income from the current holding in Nedbank on a consolidated basis. Post the Nedbank
Unbundling, the retained stake of 19.9% in Nedbank will be accounted for as an investment in an
associate per IFRS requirements. The decrease of R2,284 million reflects the pro forma impact
as if the Nedbank Unbundling had occurred on 1 January 2018.
3. The illustrative impact to Total Equity of R61,749 million as at 30 June 2018 comprises the following
components:
- Derecognition of the net asset value of Nedbank on a consolidated basis resulting in a decrease
of R88,850 million.
- An increase in Total Equity of R27,101 million representative of the retained stake of 19.9% in
Nedbank deemed to be acquired at fair value in accordance with IFRS requirements. The fair
value applied is expected to be the market value of the Nedbank Shares on the Distribution Date.
For illustrative purposes, we have applied the market value of the Nedbank Shares as at the Last
Practicable Date.
Old Mutual after the Nedbank Unbundling
The Group currently holds approximately 52% of the issued share capital of Nedbank in its shareholder
funds. After the Nedbank Unbundling, the Group will retain a minority interest of 19.9% of the issued
share capital of Nedbank in the shareholder funds of Old Mutual Life Assurance Company (South Africa)
Limited, a wholly-owned subsidiary of Old Mutual.
The existing arm's length commercial arrangements between Old Mutual and Nedbank will not be
affected by the Nedbank Unbundling. These arrangements are contained in the 'relationship agreement'
entered into between Old Mutual and Nedbank, which will govern the terms of their relationship upon
completion of the Managed Separation and replaces the historic relationship agreement between Old
Mutual plc and Nedbank, a copy of which is available on both the Old Mutual website at
www.oldmutual.com and the Nedbank website at www.nedbankgroup.co.za.
Nedbank odd-lot offer
Old Mutual Shareholders are referred to the announcement published by Nedbank on SENS on
Wednesday, 26 September 2018 simultaneously with the release of this announcement by Old Mutual.
Nedbank has indicated its intention to consider implementing an odd-lot offer following the Nedbank
Unbundling and as soon as practicably possible, subject to market conditions and all requisite approvals
and in accordance with JSE Listings Requirements, to all eligible Nedbank shareholders holding less than
100 Nedbank Shares, in order to enable these Nedbank shareholders to more efficiently dispose of their
odd lot holdings should they so wish and to manage the expanded nature of the Nedbank SA Register
and the Nedbank Namibian Register following the implementation of the Nedbank Unbundling.
Old Mutual Shareholders holding less than 100 Nedbank Shares are advised that, in the context of an
odd-lot offer, they will be required to make a positive election should they prefer to retain their Nedbank
Shares.
The Nedbank announcement is available on Nedbank's website at www.nedbankgroup.co.za.
PART II THE UNBUNDLING BY OLD MUTUAL OF NEDBANK SHARES
1. Background
1.1 On 11 March 2016, Old Mutual plc announced that its board of directors believed that the
long-term interests of Old Mutual plc shareholders and other stakeholders would be best
served by separating the four businesses then owned by the Old Mutual plc group from each
other so that they could operate as fully independent businesses. This strategic initiative was
described as the Managed Separation of the Old Mutual plc group. The Managed
Separation was materially completed in June 2018, following the demerger and listing of
Quilter plc on the London Stock Exchange and the Johannesburg Stock Exchange and the
listing of the Old Mutual Shares on the Johannesburg Stock Exchange, the Malawi Stock
Exchange, the Namibian Stock Exchange, the London Stock Exchange and the Zimbabwe
Stock Exchange.
1.2 The final step in the Managed Separation, being the distribution of a significant portion of the
Group's shareholding in Nedbank to Old Mutual Shareholders on the Register at that time
(i.e. the Nedbank Unbundling), was envisaged to take place in the final quarter of 2018. As
announced by Old Mutual plc in November 2017, the Group will retain a minority stake of
19.9% of the issued share capital of Nedbank in its shareholder funds after the
implementation of the Nedbank Unbundling.
1.3 Old Mutual Shareholders are referred to the Old Mutual plc scheme circular dated 20 April
2018 and are advised that the conditions to the Nedbank Unbundling, as set out in the
scheme circular, have been satisfied. A copy of the scheme circular may be accessed on
Old Mutual's website at www.oldmutual.com for information purposes only. The scheme
circular, however, does not form a part of this announcement and its provisions are not
incorporated by reference.
1.4 The Old Mutual Board has determined that the Nedbank Unbundling will be implemented on
Monday, 15 October 2018, being the Distribution Date.
2. Nedbank
2.1 The Old Mutual plc group acquired a majority interest in Nedbank, which was at the time
known as Nedcor Limited, in 1986. Nedbank is a diversified financial services provider
offering a wide range of wholesale and retail banking services, as well as insurance, asset
management and wealth management solutions. It delivers its products and services through
four main business clusters: (i) Nedbank Corporate and Investment Banking, (ii) Nedbank
Retail and Business Banking, (iii) Nedbank Wealth, and (iv) Nedbank Rest of Africa.
2.2 Nedbank ranks within the top-5 banks by capital on the African continent and Ecobank
Transnational Incorporated ("Ecobank"), in which Nedbank holds a 21.2% shareholding,
ranks within the top-10 banks by assets on the African continent. Nedbank is South Africa's
third-largest bank by market capitalisation and fourth-largest by total assets and headline
earnings. It is a leading corporate bank and a market leader in commercial property and
renewable energy finance and has a strong position in household motor finance, household
deposits and card acquiring. It operates a unique asset management model as part of an
integrated wealth management business. Through its pan-African banking alliance with
Ecobank, Nedbank provides its customers access to Africa's largest banking network.
2.3 For further information on Nedbank, Old Mutual Shareholders are referred to Nedbank's
public disclosures. Nedbank’s public disclosures are not part of this announcement and are
not incorporated by reference herein.
3. The Nedbank Unbundling
3.1 Ratio of entitlement
3.1.1 The Old Mutual Board has resolved to implement the Nedbank Unbundling by way of
a distribution in specie of Nedbank Shares in terms of section 46(1)(a)(i) of the
Companies Act and out of Old Mutual's contributed tax capital (as such term is
construed under the South African Income Tax Act, No. 58 of 1962). Old Mutual will
distribute 158,726,732 Nedbank Shares (i.e. the Unbundled Nedbank Shares),
(comprising 31.73% of the issued Nedbank Shares as at the Last Practicable Date) to
Old Mutual Shareholders on the Register at the Record Time, being 5:00 p.m. (SA
time) / 4:00 p.m. (UK time) on Friday, 12 October 2018.
3.1.2 Subject to the restrictions set out below, Old Mutual Shareholders reflected on the
Register at the Record Time will receive:
3.21176 Nedbank Shares
for every 100 Old Mutual Shares held.
3.1.3 Old Mutual Shareholders who sell or otherwise transfer their Old Mutual Shares prior
to the relevant LDT will not receive any Nedbank Shares.
3.2 Fractional entitlements, Cash Proceeds and Applicable Rate
3.2.1 As required by the JSE Listings Requirements, fractional entitlements to Unbundled
Nedbank Shares will be rounded down to the nearest whole number and the
aggregated fractions of the Unbundled Nedbank Shares to which an Old Mutual
Shareholder would otherwise be entitled will not be transferred to them, but will
instead be sold in the market as soon as practicable after the Nedbank Unbundling.
3.2.2 Old Mutual Shareholders will accordingly receive monetary compensation in respect of
their fractional entitlements to Nedbank Shares. In accordance with JSE Listings
Requirements, this amount will be determined with reference to the volume weighted
average price in Rand of a Nedbank Share traded on the Johannesburg Stock
Exchange on Wednesday, 10 October 2018, being the first trading day in Old Mutual
Shares on the SA Register after the LDT on Tuesday, 9 October 2018, reduced by
10% ("Cash Proceeds").
3.2.3 The Cash Proceeds will be paid (i) by Old Mutual to the relevant registered
Certificated Old Mutual Shareholders and (ii) by a nominee or CSDP to the relevant
Old Mutual Shareholders that hold their Old Mutual Shares in Uncertificated Form
within a nominee account or within a CSDP.
3.2.4 Old Mutual Shareholders on the Namibian Register, Malawian Register, UK Register
and the Zimbabwean Register will be paid the local currency cash equivalents of the
Cash Proceeds. The Cash Proceeds will be converted to local currency at the
effective rate quoted by Old Mutual on or before the date upon which payment of the
Cash Proceeds is made to the relevant Old Mutual Shareholders ("Applicable Rate").
3.2.5 The basis for the Cash Proceeds and the Applicable Rate will be announced by Old
Mutual on SENS, the London Stock Exchange's Regulatory News Service ("RNS")
and the news services of the Malawi Stock Exchange, the Namibian Stock Exchange
and the Zimbabwe Stock Exchange on Thursday, 11 October 2018).
3.3 Expected timetable of principal events
The following timetable sets out expected dates for the implementation of the Nedbank
Unbundling. All references to times are to South African time unless otherwise stated.
Event Time and/or date
Publication of this announcement Wednesday,
26 September 2018
Last day for transfers between the Registers in order to participate in
Tuesday, 2 October 2018
the Nedbank Unbundling………………………………………………….
LDT on the SA Register, Malawian Register, Namibian Register and
Zimbabwean Register in order to participate in the Nedbank Tuesday, 9 October 2018
Unbundling .............................................................................................
LDT on the UK Register in order to participate in the Nedbank Wednesday, 10 October
Unbundling………………………………………………………………… 2018
Old Mutual Shares trade “ex” entitlement on the SA Register,
Wednesday, 10 October
Malawian Register, Namibian Register and Zimbabwean Register to
2018
receive the Unbundled Nedbank Shares ................................................
Old Mutual Shares trade “ex” entitlement on the UK Register to Thursday, 11 October
receive the Unbundled Nedbank Shares ................................................ 2018
Announcement expected to be released on SENS and RNS By 11:00 a.m. on
regarding the Cash Proceeds, the Applicable Rate in respect of Thursday, 11 October
fractional entitlements and cost apportionment ...................................... 2018
5:00 p.m. (SA time) /
Record date and Record Time ............................................................... 4:00 p.m. (UK time) on
Friday, 12 October 2018
Transfers between the Registers opened, commencement of trade
Monday, 15 October 2018
on ...........................................................................................................
9:00 a.m. on Monday,
Nedbank Unbundling implemented (Distribution Date) ..........................
15 October 2018
Old Mutual Shareholders’ accounts at CSDP or broker expected to
Monday, 15 October 2018
be updated and credited .........................................................................
Thursday, 18 October
Despatch of share certificates for Unbundled Nedbank Shares ............
2018
Old Mutual Shareholders should anticipate their holdings of Old Mutual Shares at the Record Time by
taking into account all unsettled trades concluded on or before the LDT which are due to be settled on or
before the Record Time.
Share certificates may not be dematerialised into Uncertificated Form or rematerialised into Certificated
Form between Wednesday, 10 October 2018, and Friday, 12 October 2018, both days inclusive.
3.4 Approvals
3.4.1 The Nedbank Unbundling was approved by Old Mutual plc shareholders as part of the
scheme of arrangement in terms of which the Managed Separation was approved.
3.4.2 Old Mutual has obtained approval from the applicable regulators for the
implementation of the Nedbank Unbundling.
PART III ADDITIONAL INFORMATION
1. Exchange control
This summary is based on the laws as in force and as applied in practice on the Last Practicable Date
and is subject to changes to those laws and practices subsequent to such date.
The following summary of the South African Exchange Control Regulations does not constitute advice, is
intended as a guide only and is not a comprehensive statement of the Exchange Control Regulations. Old
Mutual Shareholders who have any queries regarding the Exchange Control Regulations should contact
their own professional advisers without delay.
1.1 Emigrants from the Common Monetary Area consisting of South Africa, the Republic
of Namibia ("Namibia") and the Kingdoms of Lesotho and eSwatini (formerly named
Swaziland) ("CMA")
1.1.1 Any share certificates that may be issued by Nedbank to emigrants from the CMA will
be endorsed "non-resident" in accordance with the Exchange Control Regulations.
1.1.2 Uncertificated Unbundled Nedbank Shares will be credited directly to an Old Mutual
Shareholder's emigrant share account at the CSDP or broker controlling its remaining
portfolios and an appropriate electronic entry will be made in the relevant register
reflecting a "non-resident" endorsement. The CSDP or broker will ensure that the
emigrant adheres to the Exchange Control Regulations.
1.1.3 Any Unbundled Nedbank Shares issued in Certificated Form, cash dividends and
Cash Proceeds based on an emigrant's Unbundled Nedbank Shares controlled in
terms of the Exchange Control Regulations will be forwarded to the authorised dealer
in foreign exchange controlling their assets. Elections by emigrants must be made
through the authorised dealer in foreign exchange controlling their assets.
1.2 Residents outside of the CMA
1.2.1 Any share certificates that may be issued by Nedbank to non-residents of the CMA will
be endorsed "non-resident" in accordance with the Exchange Control Regulations.
1.2.2 Uncertificated Unbundled Nedbank Shares will be credited directly to an Old Mutual
Shareholder's non-resident share account at the CSDP or broker controlling its
portfolios and an appropriate electronic entry will be made in the relevant register
reflecting a "non-resident" endorsement. The CSDP or broker will ensure that the non-
resident adheres to the Exchange Control Regulations.
1.2.3 Cash dividends and Cash Proceeds due to non-residents are freely transferable from
South Africa, subject to being converted into a currency other than Rand or paid for
the credit of a non-resident Rand account.
2. Overseas Old Mutual Shareholders
2.1 This following summary describes the restrictions applicable to Old Mutual Shareholders
who have registered addresses outside South Africa, the United Kingdom, Malawi, Namibia
and Zimbabwe, who are nationals, citizens or residents of countries other than South Africa,
the United Kingdom, Malawi, Namibia and Zimbabwe ("Overseas Old Mutual
Shareholders"), or who are persons (including, without limitation, custodians, nominees and
trustees) who have a contractual or legal obligation to forward this announcement to a
jurisdiction outside South Africa, the United Kingdom, Malawi, Namibia and Zimbabwe or
who hold shares for the account or benefit of any such Overseas Old Mutual Shareholder.
2.2 The distribution of Unbundled Nedbank Shares to Overseas Old Mutual Shareholders in
terms of the Nedbank Unbundling may be affected by the laws of such Overseas Old Mutual
Shareholders’ relevant jurisdiction. Overseas Old Mutual Shareholders should consult their
professional advisers as to whether they require any governmental or other consent or need
to observe any other formalities to enable them to take up their entitlements with respect to
the Unbundled Nedbank Shares.
2.3 It is the responsibility of any Overseas Old Mutual Shareholder (including, without limitation,
nominees, agents and trustees for such persons) being notified by this announcement of the
Nedbank Unbundling and wishing to take up their entitlement to Unbundled Nedbank Shares
to satisfy themselves as to the full observance of the applicable laws of any relevant territory,
including obtaining any requisite governmental or other consents, observing any other
requisite formalities and paying any issue, transfer or other taxes due in such territories.
2.4 Overseas Old Mutual Shareholders are obliged to observe the applicable legal requirements
of their relevant jurisdictions.
2.5 Restricted Overseas Old Mutual Shareholders
2.5.1 A restricted Overseas Old Mutual Shareholder ("Restricted Overseas Old Mutual
Shareholder") includes any Overseas Old Mutual Shareholder who is unable to
receive any of the Unbundled Nedbank Shares to be distributed to him/her/it because
of the laws of the jurisdiction of residence, establishment, incorporation or otherwise of
that Overseas Old Mutual Shareholder, or any Overseas Old Mutual Shareholder that
Old Mutual is not permitted to transfer any of the Unbundled Nedbank Shares to
because of the laws of the jurisdiction of residence, establishment, incorporation or
otherwise of that Overseas Old Mutual Shareholder. The Unbundled Nedbank Shares
to which Restricted Overseas Old Mutual Shareholders would be entitled in terms of
the Nedbank Unbundling will be aggregated and sold on the Johannesburg Stock
Exchange in an orderly manner by the SA Registrar on behalf of and for the benefit of
Restricted Overseas Old Mutual Shareholders as soon as is reasonably practical after
the implementation of the Nedbank Unbundling at the best price that can reasonably
be obtained at the time of sale.
2.5.2 CSDPs will be responsible for informing the SA Registrar of all Uncertificated Old
Mutual Shares held by them on behalf of such Restricted Overseas Old Mutual
Shareholders.
2.5.3 Restricted Overseas Old Mutual Shareholders will, in respect of their entitlement to the
Unbundled Nedbank Shares, receive the average consideration per Unbundled
Nedbank Share in Rand (net of currency conversion costs), to be converted at the
relevant spot rate on the date of payment of such consideration to the relevant
Overseas Old Mutual Shareholders), received by the SA Registrar pursuant to the
sale process as set out in paragraphs 2.5.1 and 2.5.2. The average consideration per
Unbundled Nedbank Share due to each Restricted Overseas Old Mutual Shareholder
will only be paid once all such Unbundled Nedbank Shares have been sold.
2.6 United States of America ("US")
2.6.1 Notice to US Investors
2.6.1.1 This announcement is not an offer of securities for sale in the United States.
The Unbundled Nedbank Shares have not been and will not be registered under
the US Securities Act of 1933 (“US Securities Act”), or with any securities
regulatory authority of any state or other jurisdiction in the United States and
may not be offered, sold, exercised, transferred or delivered, directly or
indirectly, in or into the United States at any time except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements
of the US Securities Act and applicable state and other securities laws of the
United States. The Unbundled Nedbank Shares will be issued in the United
States only to qualified institutional buyers ("QIBs") as defined in Rule 144A
under the US Securities Act in reliance on exemptions from registration under
the US Securities Act.
2.6.1.2 Accordingly, the Unbundled Nedbank Shares will be delivered to Old Mutual
Shareholders with a registered address in the United States ("US Old Mutual
Shareholders") only if such US Old Mutual Shareholders have demonstrated to
their relevant CSDP, broker, custodian or nominee (as applicable) that they are
QIBs and agree to certain transfer restrictions applicable to the Unbundled
Nedbank Shares delivered to QIBs. Each US Old Mutual Shareholder that
wishes to receive Unbundled Nedbank Shares in terms of the Nedbank
Unbundling will be required to execute an investor letter in a form to be provided
by (i) Old Mutual to Strate for distribution by Strate to all CSDPs and (ii) the
SA Registrar to all US Old Mutual Shareholders holding Old Mutual Shares in
Certificated Form on the Register ("US Investor Letter"). The US Investor
Letter must be returned by the Record Time to Old Mutual directly either by
email to the following email address: Ekirsten@oldmutual.com, or by courier to
1 Mutualpark, Jan Smuts Drive, Pinelands, Cape Town, Western Cape, South
Africa marked for the attention of E Kirsten (Company Secretary), with a copy to
the relevant CSDP, broker, custodian or nominee in the case of Uncertificated
Old Mutual Shareholders and the SA Registrar (to the following e-mail address:
qibs@linkmarketservices.co.za) in the case of Old Mutual Shareholders that
hold their Old Mutual Shares in Certificated Form on the SA Register, the
Malawian Register, the Namibian Register and the Zimbabwean Register or to
the UK Registrar (to the following email address: offer@equiniti.com) in the
case of the UK Register or Old Mutual DIs.
2.6.1.3 Any US Old Mutual Shareholder that is not a QIB or does not deliver a US
Investor Letter will be deemed to be an "Excluded US Old Mutual
Shareholder" and shall be treated as set out under 2.5.1 above.
2.6.1.4 The Unbundled Nedbank Shares delivered to QIBs will be "restricted securities"
within the meaning of Rule 144(a)(3) under the US Securities Act and no
representation is made as to the availability of the exemption provided by Rule
144 under the US Securities Act ("Rule 144") for resale of any Unbundled
Nedbank Shares. For so long as the Unbundled Nedbank Shares are restricted
securities, such Unbundled Nedbank Shares or any economic interest therein
may be offered, sold, pledged or otherwise transferred only: (i) to a person
whom the beneficial owner and/or any person acting on its behalf reasonably
believes is a QIB in a transaction meeting the requirements of Rule 144A; (ii) in
accordance with Rule 144 (if available); (iii) in accordance with another
applicable exemption from the registration requirements of the US Securities
Act; or (iv) in an offshore transaction complying with the provisions of
Regulation S under the US Securities Act (including, for the avoidance of doubt,
a bona fide sale on the Johannesburg Stock Exchange), in each case, in
accordance with any applicable securities laws of any state of the United States
or any other jurisdiction.
2.6.1.5 The Unbundled Nedbank Shares have not been and will not be listed on a US
securities exchange or quoted on any inter-dealer quotation system in the
United States. Neither Old Mutual nor Nedbank intends to take any action to
facilitate a market in the Unbundled Nedbank Shares in the United States.
Consequently, it is unlikely that an active trading market in the United States will
develop for the Unbundled Nedbank Shares.
2.6.1.6 The Unbundled Nedbank Shares have not been approved or disapproved by
the United States Securities and Exchange Commission, any state securities
commission in the United States or any other regulatory authority in the United
States, nor have any of the foregoing authorities passed comment upon, or
endorsed the merit of, the Nedbank Unbundling or the accuracy or the
adequacy of this announcement. Any representation to the contrary is a criminal
offence in the United States.
2.6.1.7 US Old Mutual Shareholders should consult their own legal and tax advisers
with respect to the legal and tax consequences of the Nedbank Unbundling in
their particular circumstances.
2.6.2 Notice to CSDPs, brokers, custodians and nominees holding Old Mutual Shares
on behalf of US Old Mutual Shareholders
Each US Old Mutual Shareholder that wishes to receive Unbundled Nedbank Shares
will be required to execute a US Investor Letter in a form to be provided by (i) Old
Mutual to Strate for distribution by Strate to all CSDPs and (ii) the SA Registrar to all
US Old Mutual Shareholders holding Old Mutual Shares in Certificated Form on the
Register, and must deliver such letter by the Record Time to Old Mutual directly either
by email to the following email address: Ekirsten@oldmutual.com, or by courier to
1 Mutualpark, Jan Smuts Drive, Pinelands, Cape Town, Western Cape, South Africa
marked for the attention of E Kirsten (Company Secretary), with a copy to the relevant
CSDP, broker, custodian or nominee (as applicable) in the case of Uncertificated Old
Mutual Shareholders and the SA Registrar (to the following e-mail address:
qibs@linkmarketservices.co.za) in the case of Old Mutual Shareholders that hold their
Old Mutual Shares in Certificated Form on the SA Register, the Malawian Register,
the Namibian Register and the Zimbabwean Register or to the UK Registrar (to the
following email address: offer@equiniti.com) in the case of the UK Register or Old
Mutual DIs. Any US Old Mutual Shareholder that does not deliver a valid US Investor
Letter will be deemed to be an Excluded US Old Mutual Shareholder.
2.7 Other jurisdictions
The release, publication or distribution of this announcement in jurisdictions other than South
Africa, the United Kingdom, Malawi, Namibia and Zimbabwe may be restricted by law and
therefore persons in whose possession any of this announcement comes should inform
themselves about, and observe, any such applicable restrictions or requirements. Any failure
to comply with such restrictions or requirements may constitute a violation of the securities
laws and regulations of any such jurisdiction. To the fullest extent permitted by applicable
law, Old Mutual disclaims any responsibility or liability for the violation of such restrictions or
requirements by any person. This announcement has been prepared for the purposes of
complying with the JSE Listings Requirements, the UKLA Rules, the Malawi Stock Exchange
Listings Requirements, the Namibian Stock Exchange Listings Requirements and the
Zimbabwe Stock Exchange Listings Requirements and the information disclosed may not be
the same as that which would have been disclosed if this announcement had been prepared
in accordance with the laws and regulations of any jurisdiction outside of those outlined
above.
3. Trading and settlement
3.1 Entitlement to receive Unbundled Nedbank Shares
3.1.1 Record Time
3.1.1.1 Eligible Old Mutual Shareholders registered on the applicable Register as at the
Record Time will receive Unbundled Nedbank Shares (or a beneficial
entitlement to Unbundled Nedbank Shares) (as the case may be). Please see
paragraph 3.1.3 below for details of how dealings in Old Mutual Shares prior to
the Record Time will be treated.
3.1.1.2 The way in which Old Mutual Shareholders will receive Unbundled Nedbank
Shares (or a beneficial entitlement thereto) will depend on how they hold their
Old Mutual Shares on the applicable Register as at the Record Time. These
settlement arrangements are summarised in paragraph 3.2 below.
3.1.1.3 The Record Time applies to all Old Mutual Shareholders regardless of the
applicable Register on which their Old Mutual Shares are held.
3.1.2 Overseas Old Mutual Shareholders
3.1.2.1 If, in respect of any Overseas Old Mutual Shareholder, Old Mutual is advised
that the distribution of Unbundled Nedbank Shares would or may infringe the
laws of any jurisdiction outside South Africa, Malawi, Namibia, the United
Kingdom or Zimbabwe, or would or may require Old Mutual or Nedbank to
comply with any governmental or other consent or any registration, filing or
other formality with which Old Mutual or Nedbank is unable to comply or
compliance with which Old Mutual or Nedbank regards as unduly onerous, then
Old Mutual shall deliver the relevant Unbundled Nedbank Shares to the
SA Nominee, who shall receive the Unbundled Nedbank Shares on behalf of
the relevant Overseas Old Mutual Shareholders.
3.1.2.2 All Unbundled Nedbank Shares to which the restriction in paragraph 3.1.2.1
applies that are transferred to the SA Nominee shall be sold in the market as
soon as practicable following the Distribution Date. Any such sale/s shall be
carried out at the best price which can reasonably be obtained at the time of
sale and the net proceeds of such sale/s (after the deduction of all expenses
and commissions incurred in connection with such sale) shall be paid to the
relevant Overseas Old Mutual Shareholder by the SA Nominee by way of
electronic funds transfer to the extent that the SA Nominee has, or is provided
with, bank account details for such Overseas Old Mutual Shareholder, and
failing which, by sending a cheque as soon as reasonably practicable after the
SA Nominee receives such proceeds. Old Mutual Shareholders on the
Namibian Register, Malawian Register, UK Register and the Zimbabwean
Register will be paid the local currency cash equivalents of such net proceeds,
which will be converted to local currency at the relevant spot rate on the day
upon which such net proceeds are paid to the relevant Old Mutual
Shareholders. The SA Nominee shall further send to each such Overseas Old
Mutual Shareholder a statement of account reflecting the number of Unbundled
Nedbank Shares sold, the price achieved in respect of such sale and the
amount of all expenses and commissions incurred in connection with such sale.
3.1.2.3 The payment to any Overseas Old Mutual Shareholders of the proceeds from
the sale of Unbundled Nedbank Shares in accordance with paragraph 3.1.2.2
will be in full and final satisfaction of the rights of such Overseas Old Mutual
Shareholders to receive the relevant Unbundled Nedbank Shares.
3.1.3 Dealings in Old Mutual Shares as at the Record Time
3.1.3.1 For the purposes of determining which Old Mutual Shareholders are eligible to
receive Unbundled Nedbank Shares, dealings in Old Mutual Shares will be
recognised only if:
3.1.3.1.1 in the case of Old Mutual Shareholders registered on the SA Register
whose Old Mutual Shares are held in Uncertificated Form through the
Strate System, the transferee is registered on the Uncertificated section
of the SA Register as the holder of the beneficial entitlement to the
relevant Old Mutual Shares as at the Record Time;
3.1.3.1.2 in the case of Old Mutual Shareholders who hold a beneficial entitlement
to Old Mutual Shares that are registered in the name of (i) the
OMSAN Nominee on the OMSAN Nominee Register, (ii) the
OMBN Nominee on the OMBN Nominee Register or (iii) the
OMNAN Nominee on the OMNAN Nominee Register (as applicable), the
transferee is registered on the OMSAN Nominee Register, the
OMBN Nominee Register or the OMNAN Nominee Register (as the case
may be) as the holder of the beneficial entitlement to the relevant Old
Mutual Shares as at the Record Time;
3.1.3.1.3 in the case of Old Mutual Shareholders holding Old Mutual DIs through
the UK Register in Uncertificated Form in CREST, the transferee is
registered on the UK Register as the holder of the relevant Old Mutual
DIs as at the Record Time. In the event that there are dealings effected
and instructions inputted for settlement through CREST prior to the last
day for dealings on the London Stock Exchange where an entitlement to
Old Mutual DIs has not been settled by the Record Time, a corporate
action event will arise in CREST to notify the parties of the market claim
that the selling party will become credited with Unbundled Nedbank
Shares held through the SA Nominee, in order to assist those who are
party to open transactions;
3.1.3.1.4 in the case of Old Mutual Shareholders who hold a beneficial entitlement
to Old Mutual Shares that are registered in the name of a Zimbabwean
Nominee on the relevant Zimbabwean Nominee Register, the transferee
is registered on the applicable Zimbabwean Nominee Register as the
holder of the beneficial entitlement to the relevant Old Mutual Shares as
at the Record Time; and
3.1.3.1.5 in the case of Old Mutual Shareholders registered on the SA Register,
the Malawian Register, the Namibian Register, the UK Register or the
Zimbabwean Register whose Old Mutual Shares are held in Certificated
Form, registrable transmission applications or instruments of transfer (as
applicable) in respect of those Old Mutual Shares are received by the
relevant Registrar before the Record Time with sufficient time to allow for
registration of the transferee by the Record Time.
3.1.3.2 Based on the timetable as set out in paragraph 3.3 of Part II of this
announcement, in order for transferees to be registered in accordance with the
timings listed above (and noting certain trading and settlement requirements in
South Africa, Malawi, Namibia, the United Kingdom and Zimbabwe), the last
day of dealings in Old Mutual Shares is expected to be Tuesday, 9 October
2018 on the Johannesburg Stock Exchange, the Malawi Stock Exchange, the
Namibian Stock Exchange and the Zimbabwe Stock Exchange and
Wednesday, 10 October 2018 on the London Stock Exchange, though
depending on individual circumstances, the local requirements of brokers in the
relevant jurisdictions and other potential delays in processing a trade, dealings
may need to be made earlier than these dates in order for transfers of Old
Mutual Shares or beneficial entitlements to Old Mutual Shares to be registered
in accordance with the timings above.
3.1.3.3 Similarly, Old Mutual will not recognise any transfer or transmission application
in respect of Old Mutual Shares received after Tuesday, 2 October 2018 in
respect of either:
3.1.3.3.1 requests for transfers of Old Mutual Shares between the SA Register, the
Malawian Register, the Namibian Register, the UK Register (other than
through CREST), and the Zimbabwean Register; and
3.1.3.3.2 transfers of Old Mutual Shares completed on the UK Register or in
respect of Old Mutual DIs in CREST.
3.2 Summary of the methods of receipt of Unbundled Nedbank Shares
3.2.1 The way in which Old Mutual Shareholders will receive their Unbundled Nedbank
Shares (or beneficial entitlement thereto) will depend on how they hold their Old
Mutual Shares on the applicable Register as at the Record Time, as summarised
below. Further details are set out in paragraphs 3.3 and 3.4 below.
3.2.2 It is the responsibility of Old Mutual Shareholders to satisfy themselves as to the full
observance of applicable laws and regulatory requirements, including the obtaining of
any governmental, exchange control or other consents that may be required in order
for them, their nominee, custodian or trustee, as applicable, to receive and hold the
Unbundled Nedbank Shares (or a beneficial entitlement thereto) as set out below.
Manner in which Old Manner in which Form of confirmation
Mutual Shares or Old Unbundled Nedbank
Mutual DIs (as applicable) Shares (or a beneficial
are held as at the Record entitlement to Unbundled
Time Nedbank Shares) will be
received
South Africa
On the SA Register in On the Nedbank SA Nedbank Share
Certificated Form Register in Certificated certificates are expected
Form to be despatched
following the Distribution
Date, at the Old Mutual
Shareholder’s risk, on
Thursday, 18 October 2018
On the SA Register in A beneficial entitlement The relevant CSDP or
Uncertificated Form to Unbundled Nedbank broker account will be
Shares that is recorded credited on the
on the Nedbank SA Distribution Date
Register in Uncertificated (Monday, 15 October 2018)
Form and credited to the
same CSDP or broker
account in which the
holder’s Old Mutual
Shares are currently held
On the OMSAN Nominee A beneficial entitlement The SA Nominee Register
Register of beneficial to the Unbundled will be credited with the
entitlements Nedbank Shares that is beneficial entitlements to
recorded on the Unbundled Nedbank
SA Nominee Register and Shares on the
the holder will become an Distribution Date
SA Nominee Participant (Monday, 15 October 2018)
in respect of such
Unbundled Nedbank
Shares
Namibia
On the Namibian Register On the Written holding
in Certificated Form Nedbank Namibian confirmations are
Register in Certificated expected to be
Form despatched following the
Distribution Date, at the
Old Mutual Shareholder’s
risk, on Thursday,
18 October 2018
On the OMNAN Nominee On the Written holding
Register of beneficial Nedbank Namibian confirmations are
entitlements Register in Certificated expected to be
Form despatched following the
Distribution Date, at the
Old Mutual Shareholder’s
risk, on Thursday,
18 October 2018
Malawi
On the Malawian Register A beneficial entitlement The Malawian Nominee
in Certificated Form to the Unbundled Register will be credited
Nedbank Shares that is with the beneficial
recorded on the Malawian entitlements to
Nominee Register and Unbundled Nedbank
the holder will become a Shares on the
Malawian Nominee Distribution Date
Participant in respect of (Monday, 15 October 2018)
such Unbundled Nedbank
Shares
On the Malawian Register A beneficial entitlement The Malawian Nominee
in Uncertificated Form to the Unbundled Register will be credited
Nedbank Shares that is with the beneficial
recorded on the Malawian entitlements to
Nominee Register and Unbundled Nedbank
the holder will become a Shares on the
Malawian Nominee Distribution Date
Participant in respect of (Monday, 15 October 2018)
such Unbundled Nedbank
Shares
On the OMBN Nominee A beneficial entitlement The Malawian Nominee
Register of beneficial to the Unbundled Register will be credited
entitlements Nedbank Shares that is with the beneficial
recorded on the Malawian entitlements to
Nominee Register and Unbundled Nedbank
the holder will become a Shares on the
Malawian Nominee Distribution Date
Participant in respect of (Monday, 15 October 2018)
such Unbundled Nedbank
Shares
United Kingdom
On the UK Register in A beneficial entitlement The SA Nominee Register
Certificated Form to the Unbundled will be credited with the
Nedbank Shares that is beneficial entitlements to
recorded on the Unbundled Nedbank
SA Nominee Register and Shares on the
the holder will become an Distribution Date
SA Nominee Participant (Monday, 15 October 2018)
in respect of such
Unbundled Nedbank
Shares
On the UK Register A beneficial entitlement The SA Nominee Register
through Old Mutual DIs in to the Unbundled will be credited with the
Uncertificated Form Nedbank Shares that is beneficial entitlements to
through CREST recorded on the Unbundled Nedbank
SA Nominee Register and Shares on the
the holder will become an Distribution Date
SA Nominee Participant (Monday, 15 October 2018)
in respect of such
Unbundled Nedbank
Shares
Zimbabwe
On the Zimbabwean A beneficial entitlement The Corpserve Nominee
Register in Certificated to Unbundled Nedbank Register will be credited
Form Shares that is recorded with the beneficial
on the Corpserve entitlements to
Nominee Register and Unbundled Nedbank
the holder will become a Shares on the
Corpserve Nominee Distribution Date
Participant in respect of (Monday, 15 October 2018)
such Unbundled Nedbank
Shares
On a Zimbabwean A beneficial entitlement The Corpserve Nominee
Nominee Register to Unbundled Nedbank Register will be credited
(maintained by either the Shares that is recorded with the beneficial
Corpserve Nominee (i.e. on the Corpserve entitlements to
Old Mutual Shares held in Nominee Register and Unbundled Nedbank
Uncertificated Form) or the holder will become a Shares on the
the OMZN Nominee) of Corpserve Nominee Distribution Date
beneficial entitlements Participant in respect of (Monday, 15 October 2018)
such Unbundled Nedbank
Shares
3.3 Explanation of settlement arrangements and trading in respect of the Unbundled
Nedbank Shares
3.3.1 Settlement arrangements and trading of Unbundled Nedbank Shares on the
Johannesburg Stock Exchange
3.3.1.1 Settlement arrangements for Unbundled Nedbank Shares in respect of Old
Mutual Shareholders who hold their Old Mutual Shares on the SA Register
in Uncertificated Form (that is, in the Strate System), where such
Unbundled Nedbank Shares will be traded on the Johannesburg Stock
Exchange
3.3.1.1.1 In the case of Old Mutual Shareholders who hold their Old Mutual Shares
on the SA Register in Uncertificated Form as at the Record Time, the
Unbundled Nedbank Shares to which they are entitled will be
Dematerialised and delivered to them in Uncertificated Form.
3.3.1.1.2 Old Mutual will procure that the SA Registrar is instructed to make the
appropriate arrangements to credit the applicable Old Mutual
Shareholders’ CSDP accounts (or that of their nominee, where
applicable) with the entitlement to the relevant Unbundled Nedbank
Shares with effect from the Distribution Date.
3.3.1.1.3 Settlement of transactions in Unbundled Nedbank Shares on the
Johannesburg Stock Exchange may only take place in Uncertificated
Form within the Strate System.
3.3.1.1.4 Old Mutual Shareholders whose Old Mutual Shares are held in
Uncertificated Form are required to maintain an account with a CSDP or
broker, and should instruct their CSDP or broker regarding voting and
other matters in respect of their Unbundled Nedbank Shares in
accordance with the mandate entered into between the beneficial holder
and their CSDP or broker. If Old Mutual Shareholders wish to attend a
Nedbank shareholders' meeting in person, they will need to request a
proxy or voting instruction form from their CSDP or broker or appointed
nominee in accordance with the terms of the mandate entered into
between them and their CSDP, broker or nominee. Old Mutual
Shareholders can contact their CSDP, broker or nominee for further
information in this regard.
3.3.1.2 Settlement arrangements for Unbundled Nedbank Shares in respect of Old
Mutual Shareholders who hold their Old Mutual Shares on the SA Register
in Certificated Form, where such Unbundled Nedbank Shares will be
traded on the Johannesburg Stock Exchange
3.3.1.2.1 In the case of Old Mutual Shareholders who hold their Old Mutual Shares
on the SA Register in Certificated Form as at the Record Time, the
Unbundled Nedbank Shares to which they are entitled will be delivered to
them in Certificated Form.
3.3.1.2.2 Share certificates for the Unbundled Nedbank Shares are expected to be
despatched following the Distribution Date on Thursday, 18 October
2018. Pending the despatch of share certificates for Unbundled Nedbank
Shares, transfers of Unbundled Nedbank Shares by Old Mutual
Shareholders held in Certificated Form will be certified against the
Nedbank SA Register. Temporary documents of title will not be issued in
respect of the Unbundled Nedbank Shares.
3.3.1.2.3 Settlement of transactions in Unbundled Nedbank Shares on the
Johannesburg Stock Exchange may only take place in Uncertificated
Form within the Strate System. Accordingly, Old Mutual Shareholders
who hold their Unbundled Nedbank Shares in Certificated Form and who
wish to trade in such Unbundled Nedbank Shares on the Johannesburg
Stock Exchange will be required to have their registered holding of
Unbundled Nedbank Shares Dematerialised such that they are held
through a CSDP or broker in Uncertificated Form.
3.3.1.3 Settlement arrangements for Unbundled Nedbank Shares in respect of Old
Mutual Shareholders who hold a beneficial entitlement to Old Mutual
Shares on the OMSAN Nominee Register, where such Unbundled
Nedbank Shares will be traded on the Johannesburg Stock Exchange
3.3.1.3.1 In the case of Old Mutual Shareholders whose Old Mutual Shares are
registered on the OMSAN Nominee Register in the name of the OMSAN
Nominee (who holds such Old Mutual Shares on behalf of the Old Mutual
Shareholders) as at the Record Time, the Unbundled Nedbank Shares to
which they are entitled will be able to be traded and settled on the
Johannesburg Stock Exchange through the Strate System in
Uncertificated Form.
3.3.1.3.2 In order to facilitate this arrangement, such Old Mutual Shareholders will
hold a beneficial entitlement to Unbundled Nedbank Shares on the
SA Nominee Register with the SA Nominee holding the relevant
Unbundled Nedbank Shares on their behalf. Such Old Mutual
Shareholders will accordingly become SA Nominee Participants as
Underlying Shareholders.
3.3.1.3.3 The SA Registrar and SA Nominee shall make the appropriate
arrangements to update the SA Nominee Register with the relevant
ultimate beneficial entitlement held by each of the SA Nominee
Participants to the relevant Unbundled Nedbank Shares with effect from
the Distribution Date.
3.3.1.3.4 The beneficial interest in such Unbundled Nedbank Shares will be held
on the Nedbank SA Register in the name of the SA Nominee, in order for
the Unbundled Nedbank Shares to be held in a form that can be traded
on the Johannesburg Stock Exchange through the Strate System via the
SA Nominee’s CSDP. The SA Nominee will hold its interest in the
relevant Unbundled Nedbank Shares on behalf of the SA Nominee
Participants. In order for the SA Nominee Participants to be entitled to
trade in respect of the Unbundled Nedbank Shares to which they are
beneficially entitled, each SA Nominee Participant may be required to
complete certain “know your customer” checks that must be carried out
by the SA Nominee in order to satisfy certain legal and regulatory
requirements before these types of corporate actions can be completed
for and on behalf of the SA Nominee Participants. Once such checks are
completed, the transfer and settlement of such beneficial title to the
Unbundled Nedbank Shares can then be effected in the manner
described below. In addition, SA Nominee Participants who hold their
ultimate beneficial entitlement to the relevant Unbundled Nedbank
Shares under this arrangement and who are non-residents of South
Africa may also be eligible to claim a reduction in the applicable dividend
withholding tax rate payable on any dividends paid by Nedbank, subject
to the provisions of any double-taxation agreement between South Africa
and the country in which they are tax resident (if applicable).
3.3.1.3.5 The transfer and settlement of such beneficial title to the Unbundled
Nedbank Shares can be effected by providing an instruction to trade to
the SA Nominee. The SA Nominee will arrange for the transfer and
settlement of such beneficial title through the Strate System via its CSDP
in accordance with the Strate System Rules. If an SA Nominee
Participant wishes to attend a Nedbank shareholders' meeting in person,
they will need to request a proxy or voting instruction form from the
SA Nominee. Any dividends paid by Nedbank will be paid by the
SA Nominee into the nominated bank account of each SA Nominee
Participant. All such arrangements, amongst others, will be facilitated by
and performed in accordance with the terms of the mandates to which the
SA Nominee Participants and the SA Nominee will be subject. Further
detail in relation to the operation of the SA Nominee is set out in
paragraph 3.4.1 below.
3.3.1.4 Settlement arrangements for Unbundled Nedbank Shares in respect of Old
Mutual Shareholders who hold (i) Old Mutual Shares on a Branch Register
other than the Namibian Register (whether in Certificated or Uncertificated
Form, or through Old Mutual DIs) or (ii) a beneficial entitlement to Old
Mutual Shares on the OMBN Nominee Register or either of the
Zimbabwean Nominee Registers, where such Unbundled Nedbank Shares
will be traded on the Johannesburg Stock Exchange
3.3.1.4.1 In the case of the Old Mutual Shareholders referred to in
paragraph 3.3.1.4.2 below, the Unbundled Nedbank Shares to which they
are entitled will only be able to be traded and settled on the
Johannesburg Stock Exchange through the Strate System in
Uncertificated Form.
3.3.1.4.2 The Unbundled Nedbank Shares to which the following Old Mutual
Shareholders are entitled will be delivered to them in the following
manner:
3.3.1.4.2.1 as regards Old Mutual Shareholders (i) who hold their Old Mutual
Shares on the Malawian Register (whether in Certificated or
Uncertificated Form) or (ii) whose Old Mutual Shares are
registered on the OMBN Nominee Register in the name of the
OMBN Nominee (who holds the relevant Old Mutual Shares on
behalf of such Old Mutual Shareholders), in each case as at the
Record Time, such Old Mutual Shareholders will receive a
beneficial entitlement to Unbundled Nedbank Shares on the
Malawian Nominee Register with the Malawian Nominee holding
the relevant Unbundled Nedbank Shares on their behalf. Such Old
Mutual Shareholders will accordingly become Malawian Nominee
Participants;
3.3.1.4.2.2 as regards Old Mutual Shareholders who hold (i) Old Mutual DIs or
(ii) Old Mutual Shares in Certificated Form on the UK Register, in
each case as at the Record Time, such Old Mutual Shareholders
will receive a beneficial entitlement to Unbundled Nedbank Shares
which is recorded on the SA Nominee Register with the
SA Nominee holding the relevant Unbundled Nedbank Shares on
their behalf. Such Old Mutual Shareholders will accordingly
become SA Nominee Participants; and
3.3.1.4.2.3 as regards Old Mutual Shareholders (i) who hold their Old Mutual
Shares on the Zimbabwean Register (whether in Certificated or
Uncertificated Form) or (ii) whose Old Mutual Shares are
registered on a Zimbabwean Nominee Register in the name of
either of the Zimbabwean Nominees (who holds the relevant Old
Mutual Shares on behalf of such Old Mutual Shareholders), in
each case as at the Record Time, such Old Mutual Shareholders
will receive a beneficial entitlement to Nedbank Shares on the
Corpserve Nominee Register with the Corpserve Nominee holding
the relevant Unbundled Nedbank Shares on their behalf. Such Old
Mutual Shareholders will accordingly become Corpserve Nominee
Participants.
3.3.1.4.3 Old Mutual will procure that the Malawian Nominee, the SA Nominee or
the Corpserve Nominee (as applicable) are instructed to make the
appropriate arrangements to update each of the Malawian Nominee
Register, the SA Nominee Register or the Corpserve Nominee Register
(as applicable) with the relevant ultimate beneficial entitlement held by
each of the Malawian Nominee Participants, the SA Nominee Participants
and the Corpserve Nominee Participants (as applicable) to the relevant
Unbundled Nedbank Shares with effect from the Distribution Date.
3.3.1.4.4 In each case, the beneficial interest in Unbundled Nedbank Shares will
be held on the Nedbank SA Register in the name of the SA Nominee, in
order for the Unbundled Nedbank Shares to be held in a form that can be
traded on the Johannesburg Stock Exchange through the Strate System
via the SA Nominee’s CSDP. The SA Nominee will hold its interest in the
relevant Unbundled Nedbank Shares on behalf of each of the Malawian
Nominee, SA Nominee Participants referred to in paragraph 3.3.1.4.2.2
and the Corpserve Nominee (as applicable), and the SA Nominee will
record that the beneficial entitlement to such Unbundled Nedbank Shares
is held by the Malawian Nominee, the SA Nominee Participants referred
to in paragraph 3.3.1.4.2.2 or the Corpserve Nominee (as applicable).
The Malawian Nominee and the Corpserve Nominee will, in turn, each
record in the Malawian Nominee Register and the Corpserve Nominee
Register (as applicable) that the ultimate beneficial entitlements to such
Unbundled Nedbank Shares is held by the Malawian Nominee
Participants or the Corpserve Nominee Participants (as applicable).
3.3.1.4.5 In order for Malawian Nominee Participants and the SA Nominee
Participants to be entitled to trade in respect of the Unbundled Nedbank
Shares to which they are beneficially entitled, each Malawian Nominee
Participant and SA Nominee Participant may be required to complete
certain “know your customer” checks that must be carried out by the
Malawian Nominee (or provide their consent to the transfer of their
existing “know your customer” information held by the OMBN Nominee)
or the SA Nominee (as applicable), in order to satisfy certain legal and
regulatory requirements before these types of corporate actions can be
completed by the Malawian Nominee for and on behalf of the Malawian
Nominee Participants or by the SA Nominee for and on behalf of the
SA Nominee Participants. Once such checks are completed or the
relevant information transferred, the transfer and settlement of such
beneficial title to the Unbundled Nedbank Shares can then be effected in
the manner described below.
3.3.1.4.6 Subject to the checks described in paragraph 3.3.1.4.5 being completed,
the transfer and settlement of such beneficial title to the Unbundled
Nedbank Shares can be effected by providing an instruction to trade to
the Malawian Nominee, the SA Nominee or the Corpserve Nominee (as
applicable). The Malawian Nominee, the SA Nominee or the Corpserve
Nominee (as applicable) will arrange for the transfer and settlement of
such beneficial title through the Strate System via the SA Nominee and
its CSDP, in accordance with the Strate System Rules. Transfers of
beneficial title to the Unbundled Nedbank Shares through the Strate
System will be settled in ZAR, with such proceeds being converted to the
relevant local currency at the spot exchange rate on the day of payment.
If a Malawian Nominee Participant, an SA Nominee Participant or a
Corpserve Nominee Participant wishes to attend a Nedbank
shareholders' meeting in person, they will need to request a proxy or
voting instruction form from the Malawian Nominee, the SA Nominee or
the Corpserve Nominee (as applicable). Any dividends paid by Nedbank
will be paid by the Malawian Nominee, the SA Nominee or the Corpserve
Nominee (as applicable) into the nominated bank account of each
Malawian Nominee Participant, SA Nominee Participant or Corpserve
Nominee Participant. Such dividends will be paid by Nedbank in ZAR but
will thereupon be converted to the relevant local currency at the spot
exchange rate on the day of payment. All such arrangements, amongst
others, will be facilitated by and performed in accordance with the terms
of the mandates to which (i) Malawian Nominee Participants and the
Malawian Nominee, (ii) the SA Nominee Participants and the
SA Nominee and (iii) the Corpserve Nominee Participants and the
Corpserve Nominee, will be subject. Further detail in relation to the
operation of the Malawian Nominee, the SA Nominee or the Corpserve
Nominee is set out in paragraphs 3.4.2, 3.4.1 and 3.4.3 below.
3.3.1.4.7 Investment income arising from the Unbundled Nedbank Shares held
directly or indirectly by any Zimbabwean resident, and the disposal of any
such Unbundled Nedbank Shares, may be subject to applicable
exchange control restrictions.
3.3.2 Settlement arrangements and trading of Unbundled Nedbank Shares on the
Namibian Stock Exchange
Settlement arrangements for Unbundled Nedbank Shares in respect of Old
Mutual Shareholders who hold (i) Old Mutual Shares on the Namibian Register
in Certificated Form or (ii) a beneficial entitlement to Old Mutual Shares on the
OMNAN Nominee Register, where such Unbundled Nedbank Shares will be
traded on the Namibian Stock Exchange
3.3.2.1 The Unbundled Nedbank Shares to which the following Old Mutual
Shareholders are entitled will be delivered to them in Certificated Form and will
be held on the Nedbank Namibian Register:
3.3.2.1.1 Old Mutual Shareholders who hold their Old Mutual Shares on the
Namibian Register in Certificated Form as at the Record Time; and
3.3.2.1.2 Old Mutual Shareholders whose Old Mutual Shares are registered on the
OMNAN Nominee Register in the name of the OMNAN Nominee (who
holds the relevant Old Mutual Shares on behalf of such Old Mutual
Shareholders) as at the Record Time.
3.3.2.2 Written holding confirmations in respect of the Unbundled Nedbank Shares are
expected to be despatched following the Distribution Date on Thursday,
18 October 2018. Pending the despatch of such holding confirmations for
Unbundled Nedbank Shares, transfers of Unbundled Nedbank Shares by such
Old Mutual Shareholders whose Unbundled Nedbank Shares are held in
Certificated Form will be certified against the Nedbank Namibian Register.
Temporary documents of title will not be issued in respect of the Unbundled
Nedbank Shares.
3.3.2.3 The Unbundled Nedbank Shares so held by Namibian Shareholders can be
traded and settled on the Johannesburg Stock Exchange as well through the
Strate System in Uncertificated Form only. Settlement of transactions in
Unbundled Nedbank Shares on the Johannesburg Stock Exchange may only
take place in Uncertificated Form within the Strate System. Accordingly, Old
Mutual Shareholders who hold their Unbundled Nedbank Shares in Certificated
Form on the Nedbank Namibian Register and who wish to trade in such
Unbundled Nedbank Shares on the Johannesburg Stock Exchange will be
required to have their registered holding of Unbundled Nedbank Shares
Dematerialised such that they are held through a CSDP or broker in
Uncertificated Form.
3.3.3 Old Mutual reserves the right to distribute Unbundled Nedbank Shares to any or all
Old Mutual Shareholders who hold Old Mutual Shares in Uncertificated Form as at the
Record Time in Certificated Form and vice versa if, for reasons outside its reasonable
control, it is not able to effect settlement as anticipated.
3.4 Explanation of the various Nominee Terms and Conditions
3.4.1 Explanation of the principal SA Nominee Terms and Conditions
3.4.1.1 The SA Nominee will hold the Unbundled Nedbank Shares for SA Nominee
Participants subject to the SA Nominee Terms and Conditions. SA Nominee
Participants are the beneficial owners of the Unbundled Nedbank Shares and
may give instructions to transfer the relevant Unbundled Nedbank Shares.
3.4.1.2 By participating in the SA Nominee, each SA Nominee Participant warrants that
the Unbundled Nedbank Shares to which such beneficial title relates will be,
and will remain, free from any encumbrance.
3.4.1.3 The SA Nominee is appointed as agent, representative, custodian and
administrator for the relevant SA Nominee Participants in relation to the relevant
Unbundled Nedbank Shares and is authorised to settle transactions in relation
to Unbundled Nedbank Shares in accordance with the relevant SA Nominee
Participants’ instructions. SA Nominee Participants are required to indemnify
and hold the SA Nominee harmless against all liability, costs or expenses
incurred by the SA Nominee’s agents in connection with the due and proper
performance by the SA Nominee of all of its obligations under the SA Nominee
Terms and Conditions. The SA Nominee will be liable for direct damages
incurred by SA Nominee Participants by reason of the SA Nominee’s own wilful
default or gross negligence and (except in the case of fraud) will not be liable for
indirect, special or consequential loss or damage. It is the responsibility of the
SA Nominee Participants to keep abreast with the Strate System Rules. In the
event of any conflict between the SA Nominee Terms and Conditions and
applicable laws, the applicable laws shall prevail.
3.4.1.4 The SA Nominee will open and maintain securities accounts in the name of the
SA Nominee Participants to record the number of Unbundled Nedbank Shares
to which they are beneficially entitled and to record all transactions and entries
made with respect to the Unbundled Nedbank Shares.
3.4.1.5 The SA Nominee will, to the extent it is so able, notify SA Nominee Participants
electronically of all corporate events in relation to the Unbundled
Nedbank Shares, other than where the relevant details have been included in
other corporate documentation that has or will be sent directly to SA Nominee
Participants by Nedbank. Dividend information will be published in local
newspapers in accordance with standard market practice and the SA Nominee
will send a payment advice or statement once the payment or corporate action
has been processed.
3.4.1.6 Instructions given by an SA Nominee Participant to the SA Nominee must be
sent in writing to the address or to the email as stated in the SA Nominee Terms
and Conditions. SA Nominee Participants accept the risk of loss or damage
arising, directly or indirectly, as a result of any failure in, misuse of, or any fraud
or misrepresentation due to the SA Nominee Participants’ own failure to give a
valid instruction in accordance with the SA Nominee Terms and Conditions. The
SA Nominee incurs no liability for acting on any instruction, direction or other
communication on which the SA Nominee is authorised under the SA Nominee
Terms and Conditions or for any delay in delivery of non-delivery or error in
transmission.
3.4.1.7 The SA Nominee will only vote on behalf of SA Nominee Participants in relation
to their Unbundled Nedbank Shares if a voting instruction form is received by an
SA Nominee Participant by the required date and time.
3.4.1.8 The SA Nominee is entitled to interest that may accrue on any funds deposited
with the SA Nominee (for example, for the purchase of Unbundled Nedbank
Shares) to cover administration costs. SA Nominee Participants may claim
interest where the claim amounts to more than R50.00.
3.4.1.9 SA Nominee Participants are required to pay fees and charges as published by
the SA Nominee from time to time and notified to SA Nominee Participants
and/or indicated on the SA Nominee’s website. These charges may be varied
upon 30 days’ written notice.
3.4.1.10 SA Nominee Participants are required to be verified and the SA Nominee will
not be liable for any delays that might be caused as a result of the verification
process. SA Nominee Participants are required to indemnify and agree to hold
the SA Nominee harmless against all liability, cost, expense or damage incurred
by the SA Nominee or its agents arising as a consequence of the SA Nominees
having acted on any forged, fabricated, inaccurate, invalid or unauthorised
documentation except as a result of the SA Nominee’s own failure to comply
with its verification obligations.
3.4.1.11 SA Nominee Participants may terminate their participation in the SA Nominee
facility by giving the SA Nominee at least 30 days’ written notice. The
SA Nominee will advise the relevant Underlying Shareholder within three
business days of the termination of its participation in the SA Nominee facility.
The SA Nominee may also terminate an SA Nominee Participant’s participation
in the SA Nominee facility by giving at least 30 days’ written notice to the
relevant SA Nominee Participant.
3.4.1.12 Any addition to, variation or cancellation of the SA Nominee Terms and
Conditions must be communicated to SA Nominee Participants in writing.
3.4.1.13 The SA Nominee Terms and Conditions are governed by the laws of South
Africa.
3.4.1.14 The SA Nominee Terms and Conditions are available on Nedbank’s website at
www.nedbankgroup.co.za.
3.4.2 Explanation of the principal Malawian Nominee Terms and Conditions
3.4.2.1 The Malawian Nominee will hold the Unbundled Nedbank Shares for Malawian
Nominee Participants pursuant to the Malawian Nominee Terms and
Conditions. Under the Malawian Nominee Terms and Conditions, the Malawian
Nominee Participants are the beneficial owners of the Unbundled Nedbank
Shares and may give instructions to the Malawian Nominee to transfer the
relevant Unbundled Nedbank Shares.
3.4.2.2 By participating in the Malawian Nominee facility, each Malawian Nominee
Participant warrants that the Unbundled Nedbank Shares to which such
beneficial title relates will be, and will remain, free from any encumbrance.
3.4.2.3 The Malawian Nominee is appointed as agent, representative, custodian and
administrator for the relevant Malawian Nominee Participants in relation to the
relevant Unbundled Nedbank Shares and is authorised to settle transactions in
relation to such Unbundled Nedbank Shares in accordance with the relevant
Malawian Nominee Participants’ instructions. Malawian Nominee Participants
are required to indemnify and hold the Malawian Nominee harmless against all
liability, costs or expenses incurred by the Malawian Nominee and its agents in
connection with the due and proper performance by the Malawian Nominee of
all of its obligations under the Malawian Nominee Terms and Conditions. The
Malawian Nominee will be liable for direct damages incurred by Malawian
Nominee Participants by reason of the Malawian Nominee’s own wilful default
or gross negligence and (except in the case of fraud) will not be liable for
indirect, special or consequential loss or damages.
3.4.2.4 The Malawian Nominee will open and maintain share accounts in the name of
the Malawian Nominee Participant to record the number or nominal value of the
relevant Unbundled Nedbank Shares to which they are beneficially entitled and
to record all transactions and entries made with respect to the Unbundled
Nedbank Shares.
3.4.2.5 The Malawian Nominee will notify Malawian Nominee Participants electronically
of all corporate events in relation to the Unbundled Nedbank Shares, other than
where the relevant details have been included in other corporate documentation
that has or will be sent directly to Malawian Nominee Participants by Nedbank.
3.4.2.6 Instructions given by a Malawian Nominee Participant to the Malawian Nominee
must be sent in writing to the address or to the email as stated in the Malawian
Nominee Terms and Conditions. Malawian Nominee Participants accept the risk
of loss or damage arising, directly or indirectly, as a result of any failure in,
misuse of, or any fraud or misrepresentation due to the Malawian Nominee
Participants’ own failure to give a valid instruction in accordance with the
Malawian Nominee Terms and Conditions. The Malawian Nominee will not incur
any liability for acting on any instruction, direction or other communication on
which the Malawian Nominee is authorised to rely under the Malawian Nominee
Terms and Conditions.
3.4.2.7 The Malawian Nominee will only vote on behalf of Malawian Nominee
Participants in relation to their Unbundled Nedbank Shares if a voting instruction
form is received from a Malawian Nominee Participant by the required date and
time.
3.4.2.8 Malawian Nominee Participants are required to pay fees and charges as
published by the Malawian Nominee from time to time and notified to Malawian
Nominee Participants and/or indicated on the Malawian Nominee’s website.
These charges may be varied upon 30 days’ written notice.
3.4.2.9 Malawian Nominee Participants are required to be verified and the Malawian
Nominee will not be liable for any delays that might be caused as a result of the
verification process. Malawian Nominee Participants are required to indemnify
and agree to hold the Malawian Nominee harmless against all liability, costs,
expense or damage incurred by the Malawian Nominee or its agents arising as
a consequence of the Malawian Nominee having acted on any forged,
fabricated, inaccurate, invalid or unauthorised documentation, except as a result
of the Malawian Nominee’s own failure to comply with its verification obligations.
A Malawian Nominee Participant is solely responsible to, and agrees to submit,
a written dividend tax declaration if applicable, and to forthwith inform the
withholding agent in writing should the circumstances of the Malawian Nominee
Participant change.
3.4.2.10 Any addition to, variation or cancellation of the Malawian Nominee Terms and
Conditions must be communicated to Malawian Nominee Participants in writing.
3.4.2.11 The Malawian Nominee Terms and Conditions are governed by Malawian law.
3.4.2.12 The Malawian Nominee Terms and Conditions are available on Nedbank’s
website at www.nedbankgroup.co.za.
3.4.3 Explanation of the principal Corpserve Nominee Terms and Conditions
3.4.3.1 The Corpserve Nominee will hold the Unbundled Nedbank Shares for
Corpserve Nominee Participants pursuant to the Corpserve Nominee Terms
and Conditions. Under the Corpserve Nominee Terms and Conditions, the
Corpserve Nominee Participants are the beneficial owners of the relevant
Unbundled Nedbank Shares and may give instructions to transfer the relevant
Unbundled Nedbank Shares.
3.4.3.2 By participating in the Corpserve Nominee facility, each Corpserve Nominee
Participant warrants that the Unbundled Nedbank Shares to which such
beneficial title relates will be, and will remain, free from any encumbrance.
3.4.3.3 The Corpserve Nominee is appointed as agent, representative, custodian and
administrator for the relevant Corpserve Nominee Participants in relation to the
relevant Unbundled Nedbank Shares and is authorised to settle transactions in
relation to Unbundled Nedbank Shares in accordance with the relevant
Corpserve Nominee Participants’ instructions. Corpserve Nominee Participants
are required to indemnify and hold the Corpserve Nominee harmless against all
liability, costs or expenses incurred by the Corpserve Nominee and its agents in
connection with the due and proper performance by the Corpserve Nominee of
all of its obligations under the Corpserve Nominee Terms and Conditions. The
Corpserve Nominee will be liable for direct damages incurred by Corpserve
Nominee Participants by reason of the Corpserve Nominee’s own wilful default
or gross negligence and (except in the case of fraud) will not be liable for
indirect, special or consequential loss or damages.
3.4.3.4 The Corpserve Nominee will open and maintain share accounts in the name of
the Corpserve Nominee Participant to record the number or nominal value of
Unbundled Nedbank Shares to which they are beneficially entitled and to record
all transactions and entries made with respect to the Unbundled Nedbank
Shares.
3.4.3.5 The Corpserve Nominee will notify Corpserve Nominee Participants
electronically of all corporate events in relation to the Unbundled Nedbank
Shares, other than where the relevant details have been included in other
corporate documentation that has or will be sent directly to Corpserve Nominee
Participants by Nedbank. Instructions given by a Corpserve Nominee
Participant to the Corpserve Nominee must be sent in writing to the address or
to the email as stated in the Corpserve Nominee Terms and Conditions.
Corpserve Nominee Participants accept the risk of loss or damage arising,
directly or indirectly, as a result of any failure in, misuse of, or any fraud or
misrepresentation due to the Corpserve Nominee Participants’ own failure to
give a valid instruction in accordance with the Corpserve Nominee Terms and
Conditions. The Corpserve Nominee incurs no liability for acting on any
instruction, direction or other communication on which the Corpserve Nominee
is authorised to rely under the Corpserve Nominee Terms and Conditions.
3.4.3.6 The Corpserve Nominee will only vote on behalf of Corpserve Nominee
Participants in relation to their Unbundled Nedbank Shares if a voting instruction
form is received from a Corpserve Nominee Participant by the required date
and time.
3.4.3.7 Corpserve Nominee Participants are required to pay fees and charges as
published by the Corpserve Nominee from time to time and notified to
Corpserve Nominee Participants and/or indicated on the Corpserve Nominee’s
website. These charges may be varied upon 30 days’ written notice.
3.4.3.8 Corpserve Nominee Participants are required to be verified and the Corpserve
Nominee will not be liable for any delays that might be caused as a result of the
verification process. Corpserve Nominee Participants are required to indemnify
and agree to hold the Corpserve Nominee harmless against all liability, costs,
expense or damage incurred by the Corpserve Nominee or its agents arising as
a consequence of the Corpserve Nominee having acted on any forged,
fabricated, inaccurate, invalid or unauthorised documentation, except as a result
of the Corpserve Nominee’s own failure to comply with its verification
obligations. A Corpserve Nominee Participant is solely responsible to, and
agrees to submit, a written dividend tax declaration if applicable, and to
forthwith inform the withholding agent in writing should the circumstances of the
Corpserve Nominee Participant change.
3.4.3.9 Any addition to, variation or cancellation of the Corpserve Nominee Terms and
Conditions must be communicated to Corpserve Nominee Participants in
writing.
3.4.3.10 The Corpserve Nominee Terms and Conditions are governed by Zimbabwean
law.
3.4.3.11 The Corpserve Nominee Terms and Conditions are available on Nedbank’s
website at www.nedbankgroup.co.za.
3.5 Nominee arrangements put in place by Old Mutual Shareholders
Where Old Mutual Shareholders hold their Old Mutual Shares through a nominee, custody or
trust arrangement (other than through the OMBN Nominee, the OMSAN Nominee, the
OMNAN Nominee or a Zimbabwean Nominee) such that the nominee, custodian or trustee is
the registered holder of the Old Mutual Shares on the relevant Register as at the Record
Time, it is the responsibility of such Old Mutual Shareholders holding their Old Mutual
Shares in this manner to confirm whether their nominee, custodian or trustee is eligible to
receive Unbundled Nedbank Shares on their behalf, vote at general meetings of Nedbank
and receive payments by Nedbank (among other things), pursuant to the arrangements
described above. Old Mutual Shareholders holding their Old Mutual Shares through a
nominee, custodian or trust arrangement should contact their nominee, custodian or trustee
for further information in this regard.
4. Taxation
The following summary describes certain tax consequences in connection with the Nedbank
Unbundling in South Africa, Malawi, Namibia, Sweden, the United Kingdom, the US and Zimbabwe
only. This summary is based on the tax law and practice in force in the relevant jurisdiction as at the
Last Practicable Date only, which are subject to change occasioned by future legislative
amendments and court decisions, including changes that could have a retrospective effect. In the
case of persons who are non-residents of South Africa for income tax purposes, this summary
should be read in conjunction with the provisions of any applicable double tax agreement between
South Africa and their country of residence.
This summary is general and non-exhaustive commentary to certain tax consequences of the
Nedbank Unbundling and is intended to be used only as a general guide and does not constitute
legal or tax advice. If you are in any doubt as to your tax position, you should consult an
independent professional adviser immediately.
4.1 South African Taxation
4.1.1 This section 4.1 summarises the South African income tax treatment for an Old Mutual
Shareholder that is a South African resident company, a non-South African resident
company with a permanent establishment in South Africa or a South African resident
retail shareholder that holds Old Mutual Shares as capital assets or as trading stock.
For the purposes of this section 4.1, the term Old Mutual Shareholder must be
construed accordingly.
4.1.2 The Old Mutual Board has specifically resolved to distribute the Unbundled Nedbank
Shares as a return of capital (paid out of "contributed tax capital" ("CTC")). The
distribution of the Nedbank Shares on the Nedbank Unbundling should therefore qualify
as an “unbundling transaction” for purposes of section 46(1) of the South African Income
Tax Act, 58 of 1962 (as amended) ("Income Tax Act") and should not be treated as a
taxable event for Old Mutual Shareholders who are resident in South Africa.
Consequently, the receipt of the Unbundled Nedbank Shares by South African tax
resident Old Mutual Shareholders should qualify for tax relief and should not constitute
a “return of capital” or a “dividend” for South African tax purposes only. Dividends tax
should therefore not apply. Consequently, the receipt of the Unbundled Nedbank
Shares by Old Mutual Shareholders who are non-resident of South Africa should still,
however, be treated as a "return of capital" under general South African tax principles.
4.1.3 Old Mutual Shareholders should be required to allocate a portion of the expenditure
attributable to the Old Mutual Shares held by them to the Unbundled Nedbank Shares
received pursuant to the Nedbank Unbundling. The expenditure with respect to Old
Mutual Shareholders’ Old Mutual Shares must be apportioned in accordance with an
apportionment ratio described in more detail in paragraph 4.1.4 below.
4.1.4 The proportionate amount of the expenditure to be allocated to the Unbundled
Nedbank Shares must be determined in accordance with the ratio that the market
value of the Unbundled Nedbank Shares, as at the end of the day of that distribution,
bears to the sum of the market value, as at that date, of the Old Mutual Shares and of
the Unbundled Nedbank Shares (the “Apportionment Ratio”). The Apportionment
Ratio is based on the closing share price per Old Mutual Share and the closing share
price per Unbundled Nedbank Share on LDT+1 (as defined in the JSE Listings
Requirements), being Wednesday, 10 October 2018.
4.1.5 In instances where Old Mutual Shareholders hold their Old Mutual Shares as trading
stock, the expenditure used should be the amount originally taken into account by the Old
Mutual Shareholder in respect of those Old Mutual Shares held prior to the Nedbank
Unbundling as contemplated in section 11(a), section 22(1) and section 22(2) of the
Income Tax Act. The expenditure to be allocated to the Unbundled Nedbank Shares
should be determined by applying the Apportionment Ratio. Old Mutual Shareholders
should be deemed to have incurred the expenditure allocated to the Unbundled
Nedbank Shares on the date on which the expenditure was incurred in respect of the
Old Mutual Shares.
4.1.6 Old Mutual Shareholders holding their Old Mutual Shares as capital assets should be
deemed to have acquired a proportional number of Unbundled Nedbank Shares as
capital assets. The expenditure incurred in respect of the Old Mutual Shares in terms
of paragraph 20 of the Eighth Schedule to the Income Tax Act and the market value of
those Old Mutual Shares should similarly be apportioned between the Unbundled
Nedbank Shares and the Old Mutual Shares by applying the Apportionment Ratio.
The portion of the expenditure allocated to the Unbundled Nedbank Shares should
reduce the base cost of the Old Mutual Shares held. Old Mutual Shareholders should
be deemed to have incurred the expenditure allocated to the Unbundled Nedbank
Shares on the same date on which the expenditure was incurred in respect of the Old
Mutual Shares.
4.1.7 As an illustrative example, assume that an Old Mutual Shareholder currently holds
100 Old Mutual Shares and receives 3.21176 Unbundled Nedbank Shares pursuant
to the Nedbank Unbundling. The Old Mutual Shareholder's expenditure for his
100 Old Mutual Shares is assumed to be R2,000.00. The market value per Old
Mutual Share post the Nedbank Unbundling is assumed to be R22.22 per share
(using the Old Mutual Share price of R30.96 as at the Last Practicable Date as a
proxy) and that the market value of the Unbundled Nedbank Shares post the
Nedbank Unbundling is R272.24 per share (using the Nedbank Share price at the
Last Practicable Date as a proxy). The Apportionment Ratio would then be
calculated as follows:
Apportionment Ratio = (A / (A + B))
Where:
A = the market value of the Unbundled Nedbank Shares at the close of the
day after the Nedbank Unbundling (R874.37, being 3.21176 x R272.24 per
share);
B = the market value of the Old Mutual Shares at the close of the day after the
Nedbank Unbundling (R2,222.00, being 100 x R22.22 per share);
= (R874.37 / (R874.37 + R2,222.00));
= 28.24%
4.1.7.1 The deemed expenditure to be attributed to the Unbundled Nedbank Shares
(3.21176 Unbundled Nedbank Shares) would be calculated as 28.24% x
R2,000, being R564.77, equating to deemed expenditure of R175.84 per
Nedbank Share.
4.1.7.2 The deemed expenditure to be attributed in turn to the Old Mutual Shares
(100 Old Mutual Shares) would be R2,000.00 - R564.77, being R1435.23,
equating to deemed expenditure of R14.35 per Old Mutual Share.
4.1.8 No securities transfer tax should be payable by the Old Mutual Shareholders in
respect of the receipt of the Unbundled Nedbank Shares, given that the distribution
qualifies as an “unbundling transaction” for purposes of section 46(1) of the Income
Tax Act and is consequently exempt.
4.1.9 Note, however, that for purposes of Old Mutual Shareholders who are non-resident of
South Africa, where the Unbundled Nedbank Shares are transferred through the
agency of or from a member (i.e. a Johannesburg Stock Exchange stockbroker) or
when the transfer of shares listed on the Johannesburg Stock Exchange is effected by a
participant (i.e. a person that holds in custody and administers a listed share), the
member or participant should be liable for the securities transfer tax. That member or
participant may, however, recover the securities transfer tax payable from the Old Mutual
Shareholders who are not resident in South Africa in respect of whose Old Mutual
Shares the security transfer tax is payable.
4.1.10 For the purposes of the calculation of the securities transfer tax, the taxable amount
shall be the following:
4.1.10.1 where shares listed on the Johannesburg Stock Exchange are transferred through
the agency of or from a member (i.e. a Johannesburg Stock Exchange
stockbroker), the securities transfer tax must be calculated on the purchase
consideration; or
4.1.10.2 where the transfer of shares listed on the Johannesburg Stock Exchange is
effected by a participant, the securities transfer tax must be calculated with
reference to the declared consideration. If no consideration is declared or if the
declared consideration is less than the lowest Johannesburg Stock Exchange
traded price on the date of the transaction, the securities transfer tax must be
calculated with reference to the closing price on that date.
4.2 Malawian Taxation
4.2.1 This section 4.2 summarises the Malawi income tax treatment for an Old Mutual
Shareholder that is a Malawi resident company or a non-Malawi resident company with
a Malawi permanent establishment that holds its Old Mutual Shares as capital assets
and not as trading stock.
4.2.2 As the Unbundled Nedbank Shares will be distributed by Old Mutual from its CTC,
the Nedbank Unbundling should, for Malawian tax purposes, not be treated as an in
specie dividend distribution and will accordingly not be subject to withholding tax in
Malawi.
4.2.3 However, in Malawi, any receipt of cash or asset is taxable as "income" in the hands of a
Malawian resident. Therefore the receipt of the Unbundled Nedbank Shares will be
regarded as “income” in the hands of Malawian tax resident Old Mutual Shareholders.
4.2.4 Where income received is regarded as capital in nature, the taxpayer will need to identify
a "tax basis" which may be offset against that taxable income. Malawian tax resident Old
Mutual Shareholders will therefore establish a tax basis for the Unbundled Nedbank
Shares received.
4.2.5 As regards tax on capital gains, this is calculated as the difference between the "amount
realised" and the tax basis of the asset. Where there are no sale proceeds, the open
market value of the asset disposed of is the "amount realised", while the tax basis will be
the cost of the shares, adjusted for inflation/consumer price indices applicable from the
date of acquisition to the date of disposal.
4.2.6 Since the Malawian tax resident Old Mutual Shareholders will not incur any costs or
make any contributions for the receipt of the Unbundled Nedbank Shares, there will likely
be no tax basis for the Unbundled Nedbank Shares received, and hence the full open
market value of the Unbundled Nedbank Shares received will be taxable.
4.2.7 That market value will also form the tax basis of the Unbundled Nedbank Shares
received, for purposes of determining any capital gain or loss arising on the ultimate
disposal of the Unbundled Nedbank Shares in future by the Malawi tax resident Old
Mutual Shareholders.
4.3 Namibian Taxation
4.3.1 This section 4.3 summarises the Namibia income tax treatment for an Old Mutual
Shareholder that is a Namibia resident company or a non-Namibia resident company
with a Namibia permanent establishment and that holds its Old Mutual Shares as capital
assets, not as trading stock (for purposes of this section 4.3 only, a "Namibian
Shareholder").
4.3.2 The Nedbank Unbundling should, for Namibian income tax purposes, be treated as an
in specie distribution of Unbundled Nedbank Shares by Old Mutual. Such distribution
should not be taxable in the hands of the Namibian Shareholders.
4.4 United Kingdom Taxation
4.4.1 Save where expressly indicated, the comments below apply only to Old Mutual
Shareholders resident and, in the case of an individual, domiciled or deemed domiciled
for tax purposes in the United Kingdom and to whom "split year" treatment does not apply,
who hold Old Mutual Shares as an investment and who are the absolute beneficial
owners thereof. Certain categories of Old Mutual Shareholders, including those
carrying on certain financial activities, those subject to specific tax regimes or benefiting
from certain reliefs or exemptions, those connected with Old Mutual or the Group and
those for whom the Old Mutual Shares are employment-related securities may be
subject to special rules and this summary does not apply to such Old Mutual
Shareholders.
4.4.2 Receipt of Unbundled Nedbank Shares and Cash Proceeds:
4.4.2.1 The receipt of Unbundled Nedbank Shares and any Cash Proceeds pursuant to
the Nedbank Unbundling will be a taxable event for Old Mutual Shareholders
who are resident in the United Kingdom for United Kingdom tax purposes. As
there is some technical uncertainty, Old Mutual has requested HMRC's views on
whether the Nedbank Unbundling will be treated as income or as a capital
distribution (part disposal) for United Kingdom tax purposes.
4.4.2.2 Based on an initial indication received by Old Mutual from HMRC, Old Mutual
Shareholders who are resident in the United Kingdom for United Kingdom tax
purposes should be subject to United Kingdom tax in respect of the Nedbank
Unbundling in the same way as a dividend, with the consequences described
below. This is subject to ongoing discussion with HMRC, and Old Mutual will
provide an update in the event of any material change. Old Mutual Shareholders
are recommended to consult with their own professional advisers to consider the
implications for them in light of their own circumstances.
4.4.2.3 Individual Old Mutual Shareholders
4.4.2.3.1 On the basis of the initial indication received from HMRC, a United
Kingdom resident individual Old Mutual Shareholder should not be
subject to income tax in respect of the Nedbank Unbundling if the total
amount of dividend income received by the individual in the tax year does
not exceed a dividend allowance of £2,000, which will be taxed at a nil
rate (the "Dividend Allowance"). The amount of the dividend income
received by the individual in the tax year in which the Nedbank
Unbundling occurs should include an amount equal to the market value
(at the time of the Nedbank Unbundling) of the Unbundled Nedbank
Shares and any Cash Proceeds received by the individual on the
Nedbank Unbundling.
4.4.2.3.2 In determining the income tax rate or rates applicable to a United
Kingdom resident individual Old Mutual Shareholder’s taxable income,
dividend income is treated as the highest part of such individual Old
Mutual Shareholder’s income. Dividend income that falls within the
Dividend Allowance will count towards the basic or higher rate limits (as
applicable) which may affect the rate of tax due on any dividend income
in excess of the Dividend Allowance. To the extent that a United Kingdom
resident individual Old Mutual Shareholder’s dividend income (which
should include an amount equal to the market value (at the time of the
Nedbank Unbundling) of the Unbundled Nedbank Shares and any Cash
Proceeds received pursuant to the Nedbank Unbundling) for the tax year
exceeds the Dividend Allowance and, when treated as the top slice of
such individual shareholder’s income, falls above such individual
shareholder’s personal allowance but below the basic rate limit, such an
individual shareholder will be subject to tax on that dividend income at the
dividend basic rate of 7.5%. To the extent that such dividend income falls
above the basic rate limit but below the higher rate limit, such an
individual Old Mutual Shareholder will be subject to tax on that dividend
income at the dividend upper rate of 32.5%. To the extent that such
dividend income falls above the higher rate limit, such an individual
shareholder will be subject to tax on that dividend income at the dividend
additional rate of 38.1%.
4.4.2.4 Corporate Old Mutual Shareholders
On the basis of the initial indication received from HMRC, Old Mutual
Shareholders who are within the charge to United Kingdom corporation tax
should be subject to corporation tax on the market value (at the time of the
Nedbank Unbundling) of the Unbundled Nedbank Shares and the amount of
any Cash Proceeds distributed to them pursuant to the Nedbank Unbundling,
unless (subject to special rules for such shareholders that are small companies)
the distribution falls within an exempt class and certain other conditions are met.
Each Old Mutual Shareholder’s position will depend on its own individual
circumstances, although it would generally be expected that the Nedbank
Unbundling should fall within an exempt class.
4.4.3 Base Cost in Unbundled Nedbank Shares:
Old Mutual Shareholders who are resident in the United Kingdom or otherwise subject
to United Kingdom corporation tax or capital gains tax should obtain an initial base
cost in their Unbundled Nedbank Shares equal to the market value of their Unbundled
Nedbank Shares at the time of the Nedbank Unbundling.
4.4.4 Stamp duty and stamp duty reserve tax:
No United Kingdom stamp duty or stamp duty reserve tax should be payable by Old
Mutual Shareholders in respect of their receipt of Unbundled Nedbank Shares pursuant
to the Nedbank Unbundling.
4.5 Zimbabwean Taxation
4.5.1 This section 4.5 summarises the Zimbabwe income tax treatment for an Old Mutual
Shareholder that is a Zimbabwe resident company or a non-Zimbabwe resident
company with a permanent establishment in Zimbabwe or an individual Old Mutual
Shareholder that holds Old Mutual Shares as capital assets, not as trading stock. For
the purposes of this section, the term “Old Mutual Shareholders” must be construed
accordingly.
4.5.2 As the Unbundled Nedbank Shares will be distributed by Old Mutual from its CTC, the
Nedbank Unbundling will therefore likely be regarded as a return of capital contribution
or initial investment in the Zimbabwean tax-resident Old Mutual Shareholders' hands.
Such receipts are likely to be regarded as capital receipts and not dividends.
4.5.3 The source of the capital receipts (being shares in a non-Zimbabwean company) is
offshore and not in Zimbabwe and thus no tax should arise in Zimbabwe.
4.5.4 No Zimbabwean taxation should arise on receipt of the Unbundled Nedbank Shares
by non-residents, even if they have a permanent establishment in Zimbabwe.
4.5.5 No Zimbabwean stamp duty should be payable by Zimbabwean tax-resident Old Mutual
Shareholders in respect of their receipt of Unbundled Nedbank Shares.
4.6 Certain US Federal Income Tax Considerations
4.6.1 This section 4.6 summarises certain United States federal income tax consequences
relevant to Old Mutual Shareholders receiving Unbundled Nedbank Shares (or Cash
Proceeds) pursuant to the Nedbank Unbundling that are US Holders (as defined
below) that hold their Old Mutual Shares as capital assets. The discussion does not
cover all aspects of United States federal income taxation that may be relevant to, or the
actual tax effect that any of the matters described herein will have on the receipt of
Unbundled Nedbank Shares (or Cash Proceeds) by particular investors (including
consequences under the alternative minimum tax or net investment income tax) and
does not address state, local, non-United States or other tax laws. This summary also
does not address tax considerations applicable to investors that own (directly, indirectly
or by attribution) 5% or more of the shares (by vote or value) of Old Mutual, nor does this
summary discuss all of the tax considerations that may be relevant to certain types of
investors subject to special treatment under United States federal income tax laws (such
as financial institutions, insurance companies, entities and arrangements treated as
partnerships for United States federal income tax purposes or holders of interests in
such entities, individual retirement accounts and other tax-deferred accounts, tax-
exempt organisations, dealers in securities or currencies, holders who acquired their Old
Mutual Shares upon the exercise of employee stock options or otherwise as
compensation, holders that have held their Old Mutual Shares as part of straddles,
hedging transactions or conversion transactions for United States federal income tax
purposes, persons that have ceased to be United States citizens or lawful permanent
residents of the United States, investors holding the Old Mutual Shares in connection
with a trade or business conducted outside the United States, or investors whose
functional currency is not the US dollar).
4.6.2 As used in this section, the term "US Holder" means a beneficial owner of Old Mutual
Shares that is, for United States federal income tax purposes, (i) an individual citizen
or resident of the United States, (ii) a corporation created or organised in or under the
laws of the United States or any State thereof, (iii) an estate the income of which is subject
to United States federal income tax without regard to its source or (iv) a trust if a court
within the United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have the authority to control all substantial
decisions of the trust, or the trust has validly elected to be treated as a domestic trust for
United States federal income tax purposes.
4.6.3 The United States federal income tax treatment of a partner in an entity or arrangement
treated as a partnership for United States federal income tax purposes that holds Old
Mutual Shares will depend on the status of the partner and the activities of the
partnership. US Holders that are entities or arrangements treated as partnerships for
United States federal income tax purposes should consult their tax advisers concerning
the United States federal income tax consequences to them and their partners in
respect of the Nedbank Unbundling.
4.6.4 Except as otherwise noted, this summary assumes that Old Mutual is not currently and
was never a passive foreign investment company ("PFIC") for United States federal
income tax purposes. If Old Mutual is or has been a PFIC in any taxable year during
which a US Holder held its Old Mutual Shares, materially adverse consequences could
result for such US Holder (see paragraph 4.6.6 below). If Old Mutual is treated as a
PFIC with respect to a US Holder for the year in which the Nedbank Unbundling occurs,
material adverse tax consequences could arise for such US Holder. US Holders
should consult their tax advisers regarding the potential application of the PFIC regime
to the Nedbank Unbundling.
4.6.5 This section is based on the tax laws of the United States, including the Internal
Revenue Code of 1986, as amended ("Revenue Code"), its legislative history,
existing and proposed regulations thereunder, published rulings and court decisions,
as well as on the income tax treaty between the United States and South Africa (the
"Treaty"), all as of the Last Practicable Date and all of which are subject to change at
any time, possibly with retrospective effect.
4.6.6 The receipt of Unbundled Nedbank Shares (or Cash Proceeds) pursuant to the
Nedbank Unbundling is expected to be a taxable distribution by Old Mutual to
US Holders, with the amount realised in the distribution by a US Holder equal to the fair
market value of the Unbundled Nedbank Shares (or Cash Proceeds) distributed to it.
The distribution generally would be treated as a dividend to the extent of Old Mutual’s
current or accumulated earnings and profits (as determined for United States federal
income tax purposes). The amount of the distribution in excess of Old Mutual’s current
and accumulated earnings and profits generally would be treated as a non-taxable return
of capital to the extent of the US Holder’s basis in their Old Mutual Shares and
thereafter as capital gain. However, Old Mutual does not maintain calculations of its
earnings and profits for United States federal income tax purposes. US Holders should
therefore assume that the entire amount deemed realised pursuant to the Nedbank
Unbundling would be reported as ordinary dividend income. The distribution would not
be eligible for the dividends received deduction generally allowed to corporations. The
distribution generally would be taxable to a non-corporate US Holder at the reduced
rate normally applicable to long-term capital gains, provided Old Mutual qualifies for the
benefits of the Treaty, and certain other requirements are met.
4.6.7 A US Holder would have a tax basis in the Unbundled Nedbank Shares received equal to
their fair market value, determined in US dollars and the US Holder’s holding period for
the Unbundled Nedbank Shares would begin on the day of receipt of such Unbundled
Nedbank Shares.
4.6.8 A non-United States corporation will be a PFIC in any taxable year in which, after
taking into account the income and assets of the corporation and certain subsidiaries
pursuant to applicable "look-through rules", either (i) at least 75% of its gross income is
“passive income” or (ii) at least 50% of the average value of its assets is attributable to
assets which produce passive income or are held for the production of passive
income. For this purpose, "passive income" generally includes interest, dividends,
royalties, rents and gains from commodities and securities transactions. Exceptions are
provided for income derived in the active conduct of an insurance business and income
derived in the active conduct of a banking business. A substantial portion of the income
and assets of Old Mutual and its subsidiaries, including Nedbank and its subsidiaries,
is attributable to passive assets held in connection with insurance and banking
businesses conducted by certain of Old Mutual’s subsidiaries and Nedbank’s
subsidiaries. Accordingly, the eligibility of these businesses for such exceptions is central
to the determination of the PFIC status of Old Mutual.
4.6.9 Special rules under the PFIC regime generally allow banks to treat their banking
business income as non-passive in certain circumstances. To qualify for these rules, a
bank must satisfy certain requirements regarding its licensing and activities. Old Mutual
believes that its and Nedbank’s banking subsidiaries should currently meet these
requirements.
4.6.10 It is unclear how to apply the PFIC rules and the active insurance exception to non-
United States insurance companies, such as Old Mutual’s insurance subsidiaries and
Nedbank’s insurance subsidiaries, offering products that, while conforming to the
regulatory requirements applicable to insurance companies in their respective
jurisdictions, do not conform to those applicable to United States insurance companies.
Old Mutual believes that its insurance subsidiaries each met the requirements of the
active insurance exception for 2016 and 2017. However, the United States Congress
recently enacted legislation modifying certain aspects of the active insurance
exception rules applicable to taxable years beginning after 31 December 2017. As a
consequence, some of Old Mutual’s insurance subsidiaries may not meet the
requirements of the active insurance exception in 2018 or future years.
4.6.11 Based on its interpretation of the applicable law, the composition of its income, the
valuation of its assets and the activities conducted by it and its subsidiaries, Old
Mutual does not believe that it was a PFIC in the taxable year ended 31 December
2017 and does not expect to be a PFIC for the current taxable year. No assurance is
given that Old Mutual was not a PFIC in any prior year. In addition, because these
determinations are factual in nature and subject to change, there can be no assurance
that the income and activities of the insurance subsidiaries and banking subsidiaries of
Old Mutual and Nedbank have qualified in the past, currently qualify, or will qualify in
the future, for the active insurance exception and/or the active banking exception, or that
Old Mutual will not be a PFIC for the current year or in the future.
4.6.12 Distributions paid pursuant to the Nedbank Unbundling by a United States paying agent
or other United States intermediary will be reported to the US Internal Revenue
Service and to the US Holder as may be required under applicable regulations. Backup
withholding may apply to these distributions if the US Holder fails to provide an
accurate taxpayer identification number or certification of exempt status or fails to
comply with applicable certification requirements. Certain US Holders are not subject to
backup withholding. US Holders should consult their tax advisers about these rules and
any other reporting obligations that may apply to the receipt of Unbundled Nedbank
Shares (or Cash Proceeds), including requirements related to the holding of certain
“specified foreign financial assets”.
4.7 Sweden Taxation
4.7.1 This section 4.7 summarises certain Swedish income tax considerations in relation to
the Nedbank Unbundling for an Old Mutual Shareholder that is resident in Sweden for
tax purposes.
4.7.2 Special tax consequences that are not described below may apply for certain categories
of taxpayers, including investment companies, mutual funds, life insurance companies
and shares held by a partnership or as current assets in a business operation. Further,
specific tax consequences may be applicable if, and to the extent that, an Old Mutual
Shareholder realises a capital loss on the shares and to any currency exchange gains or
losses. Credit of foreign taxes is not addressed in these paragraphs.
4.7.3 The Nedbank Unbundling should, for Swedish income tax purposes, be treated as
distribution in kind of Unbundled Nedbank Shares (or Cash Proceeds) by Old Mutual.
Such distribution should normally be taxable in the hands of Swedish tax resident Old
Mutual Shareholders as a regular dividend.
4.7.4 Dividends are normally taxed at a rate of 30% for individuals (capital income) and 22% for
legal entities (business income). The rate applicable to business income may be reduced to
21.4% in 2019 and further reduced to 20.6% in 2021. The acquisition cost for the
Unbundled Nedbank Shares received by way of distribution in kind should be equal to
the amount taxed as income on receipt of the Unbundled Nedbank Shares.
Old Mutual Shareholders are reminded that the foregoing taxation summary is a general and non-
exhaustive commentary to certain tax consequences of the Nedbank Unbundling and that it does
not constitute legal or tax advice. If you are in any doubt as to your tax position, you should consult
an independent professional adviser.
5. HELPLINE AND WEBSITES
If you have any questions relating to this announcement or the Nedbank Unbundling in general,
please contact the relevant Registrar using the following contact details:
• South Africa – Link Market Services South Africa Proprietary Limited on telephone number: +27
(0)86 140 0110 or +27 (0)11 029 0253
• Malawi – National Bank of Malawi Limited on telephone number: +265 (0)182 0622/0054
• Namibia – Transfer Secretaries (Proprietary) Limited on telephone number: +264 (0)61 227647
• United Kingdom – Equiniti Limited on telephone number: 0333 207 5952 (if calling from the
United Kingdom) or +44 121 415 0805 (if calling from overseas)
• Zimbabwe – Corpserve Registrars (Private) Limited on telephone number: +263(0) 475 1559/61
• Nedbank's transfer secretary in South Africa - Link Market Services South Africa Proprietary
Limited on telephone number: +27 (0)11 713 0800
Lines are open on Mondays to Fridays (except for public holidays) from 8:00 a.m. to 4:30 p.m.
(local time) in respect of all Registrars other than the UK Registrar, and in the case of the
UK Registrar from 8.30 a.m. to 5.30 p.m. (London time). Please note that, for legal reasons, the
Helpline cannot provide any legal, tax or financial advice.
PART IV : DEFINITIONS
In this announcement, unless otherwise stated or the context clearly indicates otherwise, the words in the
first column have the meanings stated opposite them in the second column, words in the singular shall
include the plural and vice versa, words importing one gender include the other genders and references
to a person include juristic persons and associations of persons and vice versa:
"Branch Register" the Malawian Register in respect of Malawi, the Namibian
Register in respect of Namibia, the UK Register in respect
of the United Kingdom and the Zimbabwean Register in
respect of Zimbabwe, as the context may require;
"CDCL" Chengetedzai Depository Company Limited, incorporated
and registered in Zimbabwe with corporate registration
number 1716/2010, being the operator of the
Zimbabwean CSD;
"Certificated" or "in Certificated recorded in physical paper form on the relevant Register
Form" without reference to the Strate System, the Malawian CSD,
CREST or the Zimbabwean CSD;
"Companies Act" the South African Companies Act, 71 of 2008 (as
amended);
"Corpserve Nominee" Corpserve Nominees (Private) Limited, incorporated and
registered in Zimbabwe with corporate registration number
2421/2015, being a wholly-owned subsidiary of the
Zimbabwean Registrar, in its capacity as nominee holding
beneficial entitlements to Old Mutual Shares on behalf of
the relevant Underlying Shareholders or as administrator of
custody accounts holding dematerialised securities, as the
context requires;
"Corpserve Nominee Participant" an Underlying Shareholder who is a participant in the
Corpserve Nominee facility pursuant to the Corpserve
Nominee Terms and Conditions;
"Corpserve Nominee Register" the register of beneficial entitlements to Old Mutual Shares
or Nedbank Shares (as applicable), maintained by the
Corpserve Nominee;
"Corpserve Nominee Terms and the terms and conditions under which the Corpserve
Conditions" Nominee provides the Corpserve Nominee facility, as
amended from time to time, described in paragraph 3.4.3, a
copy of which is available on Nedbank’s website at
www.nedbankgroup.co.za.
"CREST" the system for the paperless settlement of trades in
securities and the holding of Uncertificated securities
operated by Euroclear United Kingdom & Ireland Limited in
accordance with the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755) (as amended);
"CSDP" a Central Securities Depository Participant, a participant as
defined in section 1 of the FMA;
"Dematerialised" means:
(i). in relation to SA Shareholders and Namibian
Shareholders, the process by which Certificated
shares are deposited with a CSDP and documents
of title evidencing such shares are replaced by an
electronic record of such shares in the
Uncertificated portion of Old Mutual's securities
register;
(ii). in relation to Malawian Shareholders, the process
by which Certificated shares are deposited with a
Malawian Custodian and documents of title
evidencing such shares are replaced by an
electronic record of such shares in the sub-register
of shareholders maintained by the Malawian
Custodian or the Malawian CSD, as applicable; and
(iii). in relation to Zimbabwean Shareholders, the
process by which Certificated shares are deposited
with a Zimbabwean Custodian and documents of
title evidencing such shares are replaced by an
electronic record of such shares in the sub-register
of shareholders maintained by the Zimbabwean
Custodian or by an investment administrator to
which the Zimbabwean Custodian has outsourced
the professional administration of the sub-register
of shareholders;
"Distribution Date" Monday, 15 October 2018, being the date upon which the
Unbundled Nedbank Shares will be distributed to Old
Mutual Shareholders;
"Exchange Control Regulations" the South African Exchange Control Regulations, 1961 as
promulgated by Government Notice R.1111 of
1 December 1961 and amended up to Government Notice
R.445 of 8 June 2012, in terms of section 9 of the South
African Currency and Exchanges Act, 9 of 1933 (as
amended);
"FCA" the United Kingdom Financial Conduct Authority or its
successor from time to time;
"FMA" the South African Financial Markets Act, 19 of 2012 (as
amended);
"FSMA" the United Kingdom's Financial Services and Markets Act
2000 (as amended);
"Group" Old Mutual and its subsidiaries and subsidiary undertakings
from time to time;
"HMRC" HM Revenue & Customs;
"IFRS" International Financial Reporting Standards and
interpretations issued by the International Financial
Reporting Interpretations Committee published by the
International Accounting Standards Board as adopted by
the European Union;
"Johannesburg Stock Exchange" the exchange operated under the FMA by JSE Limited;
"JSE Limited" JSE Limited, incorporated and registered in South Africa
with registration number 2005/022939/06, licensed to
operate an exchange under the FMA;
"JSE Listings Requirements" the listings requirements issued by JSE Limited under the
FMA to be observed by issuers of equity securities listed on
the Johannesburg Stock Exchange (as amended);
"Last Practicable Date" Friday, 21 September 2018;
"LDT" last day to trade, as set out in the timetable in
paragraph 3.3 of Part II of this announcement;
"London Stock Exchange" the securities exchange operated by London Stock
Exchange plc under the FSMA;
"London Stock Exchange plc" London Stock Exchange plc, incorporated and registered in
England and Wales, with registered number 02075721;
"Malawi" the Republic of Malawi;
"Malawi Stock Exchange" the securities exchange operated by Malawi Stock
Exchange Limited under the Malawian Securities Act, 2010
(as amended) and the Malawian Companies Act, 2013 (as
amended), and licensed under the Malawian Financial
Services Act, 2010 (as amended);
"Malawi Stock Exchange Limited" Malawi Stock Exchange Limited, a company limited by
guarantee and operating under the Capital Market
Development Act (Cap 46.06) of the laws of Malawi and the
Companies Act (Cap 46:03) of Malawi with registration
number: 5510;
"Malawi Stock Exchange Listings the listings requirements issued by Malawi Stock Exchange
Requirements" Limited;
"Malawian CSD" the Central Securities Depository, operated by The Reserve
Bank of Malawi Electronic Central Securities Depository,
being an electronic clearing and settlement environment for
securities transactions on the Malawi Stock Exchange;
"Malawian Custodian" a registered custodian under the Malawian Financial
Services Act, 2010, being a custodian of the Dematerialised
shares deposited in the Malawian CSD and tradable on the
Malawi Stock Exchange;
"Malawian Nominee" The National Bank of Malawi Nominees Limited,
incorporated and registered in Malawi with corporate
registration number 970, in its capacity as nominee;
"Malawian Nominee Participant" an Underlying Shareholder who is a participant in the
Malawian Nominee facility pursuant to the Malawian
Nominee Terms and Conditions;
"Malawian Nominee Register" the register of beneficial entitlements to Nedbank Shares
maintained by the Malawian Nominee;
"Malawian Nominee Terms and the terms and conditions under which the Malawian
Conditions" Nominee provides the Malawian Nominee facility, as
amended from time to time, described in paragraph 3.4.2
above, a copy of which is available on Nedbank’s website at
www.nedbankgroup.co.za;
"Malawian Register" the Malawian branch of Old Mutual's securities register
maintained in Malawi on behalf of Old Mutual by the
Malawian Registrar;
"Malawian Registrar" The National Bank of Malawi Limited (Financial
Management Services Department), incorporated and
registered in Malawi with registration number 1428;
"Malawian Shareholders" Old Mutual Shareholders who hold Old Mutual Shares on
the Malawian Register;
"Namibia" the Republic of Namibia;
"Namibian Register" the Namibian branch of Old Mutual's securities register
maintained in Namibia on behalf of Old Mutual by the
Namibian Registrar;
"Namibian Registrar" Transfer Secretaries Proprietary Limited, incorporated and
registered in Namibia, with registration number: 93/731;
"Namibian Shareholders" Old Mutual Shareholders who hold Old Mutual Shares on
the Namibian Register;
"Namibian Stock Exchange" the Namibian Stock Exchange, an exchange licensed by
the Namibian Financial Institutions Supervisory Authority
and operated under and regulated by the Namibian Stock
Exchanges Control Act, 1 of 1985 (as amended);
"Namibian Stock Exchange the listings requirements issued by the Namibia Stock
Listings Requirements" Exchange under the Namibian Stock Exchanges Control
Act, 1 of 1985 (as amended), required to be observed by
issuers of securities listed on the Namibian Stock Exchange
(as amended);
"Nedbank" Nedbank Group Limited, incorporated and registered in
South Africa with registration number 1966/010630/06;
"Nedbank Namibian Register" the Namibian branch of Nedbank's securities register
maintained in Namibia on behalf of Nedbank by the
Namibian Registrar;
"Nedbank SA Register" Nedbank's principal securities register maintained in South
Africa on behalf of Nedbank by the SA Registrar;
"Nedbank Shares" ordinary shares of no par value in the issued share capital
of Nedbank;
"Nedbank Unbundling" the distribution by Old Mutual of the Unbundled Nedbank
Shares to Old Mutual Shareholders, as detailed in this
announcement;
"Old Mutual" Old Mutual Limited, incorporated and registered in South
Africa with registration number 2017/235138/06;
"Old Mutual Board" the board of directors of Old Mutual;
"Old Mutual DI" a depositary interest held in CREST representing an
entitlement to one underlying Old Mutual Share registered
in Equiniti Financial Services Limited's nominee's name,
Wealth Nominees Limited, as custodian for the Old Mutual
DIs;
"Old Mutual plc" Old Mutual plc, incorporated and registered in England and
Wales with registered number 03591559;
"Old Mutual Shareholders" the registered holders of Old Mutual Shares;
"Old Mutual Shares" ordinary shares of no par value in the issued share capital
of Old Mutual;
"OMBN Nominee" Old Mutual (Blantyre) Nominees Limited, incorporated and
registered in Malawi with registered number 5053;
"OMBN Nominee Register" the register of beneficial entitlements to Old Mutual Shares,
maintained by the OMBN Nominee;
"OMNAN Nominee" Old Mutual (Namibia) Nominees (Proprietary) Limited,
incorporated and registered in Namibia with registration
number 99/083;
"OMNAN Nominee Register" the register of beneficial entitlements to Old Mutual Shares,
maintained by the OMNAN Nominee;
"OMSAN Nominee" Old Mutual (South Africa) Nominees (RF) Proprietary
Limited, incorporated and registered in South Africa with
registration number 1999/004976/07;
"OMSAN Nominee Register" the register of beneficial entitlements to Old Mutual Shares,
maintained by the OMSAN Nominee;
"OMZN Nominee" Old Mutual Zimbabwe Nominees (Private) Limited,
incorporated and registered in Zimbabwe with corporate
registration number 2170/99;
"Overseas Old Mutual Old Mutual Shareholders with a registered address in, or
Shareholders" who are citizens, residents or nationals of, jurisdictions
outside South Africa, Malawi, Namibia, the United Kingdom
or Zimbabwe or whom Old Mutual reasonably believes to
be citizens, residents or nationals of jurisdictions outside
South Africa, Malawi, Namibia, the United Kingdom or
Zimbabwe;
"Quilter plc" Quilter plc, incorporated and registered in England and
Wales with registered number 06404270;
"Rand" or "ZAR" the lawful currency of South Africa;
"Record Time" 5:00 p.m. (SA time) / 4:00 p.m. (UK time) on Friday,
12 October 2018;
"Register" the securities register of Old Mutual, comprising the
SA Register, the Malawian Register, the Namibian Register,
the UK Register and the Zimbabwean Register, or where
applicable, any of such Registers;
"Registrar" the SA Registrar, the Namibian Registrar, the Malawian
Registrar, the UK Registrar and the Zimbabwean Registrar,
as applicable;
"SA Nominee" Pacific Custodians Nominees (RF) Proprietary Limited,
incorporated and registered in South Africa with registration
number 2014/113298/07;
"SA Nominee Participant" an Underlying Shareholder who is a participant in the
SA Nominee facility pursuant to the SA Nominee Terms and
Conditions;
"SA Nominee Register" the register of beneficial entitlements to Nedbank Shares
maintained by the SA Nominee;
"SA Nominee Terms and the terms and conditions under which the SA Nominee
Conditions" provides the SA Nominee facility, as amended from time to
time, described in paragraph 3.4.1, a copy of which is
available on Nedbank’s website at
www.nedbankgroup.co.za;
"SA Register" Old Mutual's principal securities register maintained in
South Africa on behalf of Old Mutual by the SA Registrar;
"SA Registrar" Link Market Services South Africa Proprietary Limited,
incorporated and registered in South Africa, with registration
number: 2000/007239/07;
"SA Shareholders" Old Mutual Shareholders who hold Old Mutual Shares on
the SA Register;
"SECZ" The Securities and Exchange Commission of Zimbabwe;
"SENS" the Johannesburg Stock Exchange's Stock Exchange News
Service;
"South Africa" the Republic of South Africa;
"Strate" Strate Proprietary Limited, incorporated and registered in
South Africa with registration number 1998/022242/07,
which is a registered central securities depository in terms
of the FMA, and which manages the Strate System;
"Strate System" the system operated for dealings in Uncertificated securities
listed on the Johannesburg Stock Exchange that take place
on the Johannesburg Stock Exchange and for dealings in
Certificated securities listed on the Johannesburg Stock
Exchange that take place off market;
"Strate System Rules" the depository rules, directives, regulations and notices
issued by Strate from time to time (as amended);
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;
"UK Register" the UK branch of Old Mutual's securities register
maintained in the UK on behalf of Old Mutual by the UK
Registrar;
"UK Registrar" Equiniti Limited, incorporated under the laws of England
and Wales, with registration number: 06226088;
"UKLA Rules" together, the rules and regulations made by the FCA in its
capacity as the United Kingdom Listing Authority under
FSMA; and contained in the Financial Services Authority's
publication of the same name, the United Kingdom
prospectus rules made by the FCA pursuant to Part VI of
the FSMA, referred to in section 73A(4) of the FSMA and
contained in the FCA's publication of the same name; and
the disclosure guidance and transparency rules made by
the FCA pursuant to section 73A of the FSMA;
"Unbundled Nedbank Shares" 158 726 732 Nedbank Shares distributed by Old Mutual to
Old Mutual Shareholders pursuant to the Nedbank
Unbundling;
"Uncertificated" or "in means:
Uncertificated Form" (i). in relation to SA Shareholders, recorded on the
SA Register as being held in uncertificated form in
the Strate System and title to which, by virtue of the
Companies Act, the FMA and the Strate System
Rules, may be transferred by means of the Strate
System;
(ii). in relation to Malawian Shareholders, recorded on
the Malawian Register as being held in
uncertificated form in the Malawian CSD and title to
which may be transferred by means of the
Malawian CSD;
(iii). in relation to UK Shareholders, recorded on the
UK Register as being held in uncertificated form in
CREST and title to which, by virtue of the
Uncertificated Securities Regulations, may be
transferred by means of CREST; and
(iv). in relation to Zimbabwean Shareholders, recorded
on the Zimbabwean Register as being held in
uncertificated form in the Zimbabwean CSD and
title to which, by virtue of the Zimbabwean
Securities and Exchange Act, may be transferred
by means of the Zimbabwean CSD;
"Underlying Shareholders" a holder of a beneficial entitlement to Old Mutual Shares or
Nedbank Shares (as applicable);
"Zimbabwe" the Republic of Zimbabwe;
"Zimbabwe Stock Exchange" the Zimbabwe Stock Exchange, established under the
Zimbabwe Stock Exchange Act Chapter 24:18, as
subsequently repealed and replaced by Chapter 24:25 of
the Zimbabwean Securities Act, 17 of 2004 (as amended);
"Zimbabwe Stock Exchange the listings requirements issued by the Zimbabwe Stock
Listings Requirements" Exchange;
"Zimbabwean CSD" the Central Securities Depository, operated by CDCL, being
an electronic clearing and settlement environment for
securities transactions on the Zimbabwe Stock Exchange;
"Zimbabwean Custodian" a registered custodian and licensee of the SECZ under the
Zimbabwean Securities and Exchange Act, being the
custodian of the Dematerialised shares deposited in the
Zimbabwean CSD and tradable on the Zimbabwe Stock
Exchange;
"Zimbabwean Nominee" the Corpserve Nominee or the OMZN Nominee as the
context requires;
"Zimbabwean Nominee Register" the register of beneficial entitlements to Old Mutual Shares
or Nedbank Shares (as applicable), maintained by the
relevant Zimbabwean Nominee;
"Zimbabwean Register" the Zimbabwean branch of Old Mutual's securities register
maintained in Zimbabwe on behalf of Old Mutual by the
Zimbabwean Registrar;
"Zimbabwean Registrar" Corpserve Registrars (Private) Limited, incorporated and
registered in Zimbabwe, with registration number: 9988/97;
"Zimbabwean Securities and the Zimbabwean Securities and Exchange Act, Chapter
Exchange Act" 24:25 (as amended);
"Zimbabwean Shareholders" Old Mutual Shareholders who hold Old Mutual Shares on
the Zimbabwean Register.
Sponsors
Merrill Lynch South Africa Proprietary Limited, Johannesburg Stock Exchange sponsor
Stockbrokers Malawi Limited, Malawi Stock Exchange sponsor
PSG Wealth Management (Namibia) Proprietary Limited, Namibian Stock Exchange sponsor
Imara Edwards Securities (Private) Limited, Zimbabwe Stock Exchange sponsor
Joint Financial Advisers
Merrill Lynch South Africa Proprietary Limited
Rothschild (South Africa) Proprietary Limited
Legal advisers
Webber Wentzel, South African legal adviser
Savjani & Co, Malawian legal adviser
Engling, Stritter and Partners, Namibian legal adviser
Linklaters LLP, legal adviser with respect to English law and U.S. law
Dube, Manikai & Hwacha Legal Practitioners, Zimbabwean legal adviser
DISCLAIMER
This announcement is not for distribution, directly or indirectly, in or into the United States (including its
territories and possessions, any State of the United States and the District of Columbia), Australia,
Canada or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase
or subscribe for, or otherwise invest in, securities in the United States, Australia, Canada or Japan. The
Unbundled Nedbank Shares mentioned herein have not been, and will not be, registered under the
US Securities Act. The Unbundled Nedbank Shares may not be offered or sold in the United States
except pursuant to an exemption from or in a transaction not subject to the registration requirements of
the US Securities Act. There will be no public offer of securities in the United States.
The information contained in this announcement constitutes factual information as contemplated in
section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act, 37 of 2002 (as
amended) ("FAIS Act") and should not be construed as an express or implied recommendation, guide or
proposal that any particular transaction in respect of the Old Mutual Shares or the Unbundled Nedbank
Shares or in relation to the business or future investments of Old Mutual or Nedbank is appropriate to the
particular investment objectives, financial situations or needs of a prospective investor, and nothing in this
announcement should be construed as constituting the canvassing for, or marketing or advertising of,
financial services in South Africa.
No representation or warranty, express or implied, is made by any person other than Old Mutual as to the
accuracy, completeness or verification of the information set out in this announcement, and nothing
contained in this announcement is, or shall be relied upon as, a promise or representation in this respect,
whether as to the past or the future. No person other than Old Mutual assumes responsibility for this
announcement's accuracy, completeness or verification and all other persons accordingly disclaim, to the
fullest extent permitted by applicable laws and regulations, any and all liability whether arising in delict,
tort, contract or otherwise that they might otherwise be found to have in respect of this announcement or
any such statement.
JSE Sponsor Merrill Lynch South Africa (Pty) Limited
Namibian Sponsor PSG Wealth Management (Namibia) (Proprietary) Limited
Enquiries
Investor Relations
Patrick Bowes T: +44 (0)20 7002 7440
(Interim Head of Investor Relations) E: Patrick.bowes@omg.co.uk
Communications:
Tabby Tsengiwe T: +27 (11) 217 1953
M: +27 (0)60 547 4947
E: ttsengiwe@oldmutual.com
Notes to Editors
About Old Mutual
Old Mutual is a premium African financial services group that offers a broad spectrum of financial
solutions to retail and corporate customers across key markets segments in 17 countries. Old Mutual's
primary operations are in South Africa and the rest of Africa, and it has niche businesses in Latin America
and Asia. With over 170 years of heritage across sub-Saharan Africa, we are a crucial part of the
communities we serve and broader society on the continent.
For further information on Old Mutual, and its underlying businesses, please visit the corporate website at
www.oldmutual.com.
Date: 26/09/2018 01:00:00 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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