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RAND MERCHANT INVESTMENT HOLDINGS LIMITED - Cash payment in respect of fractional entitlements

Release Date: 18/10/2018 10:53
Code(s): RMI     PDF:  
 
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Cash payment in respect of fractional entitlements

RAND MERCHANT INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2010/005770/06
ISIN: ZAE000210688
Share code: RMI
("RMI" or "the Company")

CASH PAYMENT IN RESPECT OF FRACTIONAL ENTITLEMENTS

The ordinary shareholders of the Company ("RMI Shareholders") are
referred to the Company’s summarised audited results announcement
including the dividend declaration for the year ended 30 June 2018
published on the Stock Exchange News Service (“SENS”) of the JSE
Limited (“JSE”) on 11 September 2018.

The Company declared a final gross cash dividend of 65 cents per
ordinary share for the year ended 30 June 2018 ("Cash Dividend")
and provided RMI Shareholders an alternative to elect to (i)
receive fully paid up RMI ordinary shares with a par value of
R0.0001 (“RMI Shares”) in the Company in lieu of the Cash Dividend
(“Scrip Distribution Alternative”); or (ii) reinvest all or part
of the Cash Dividend (net of any applicable taxes) (“Subscription
Value”) in RMI Shares by RMI (a) crediting such Subscription Value
to RMI Shareholders; and (b) applying such credit on behalf of RMI
Shareholders to subscribe for reinvestment shares (“Reinvestment
Option”), in respect of all or a part of their shareholding
recorded in RMI’s securities register at 12:00 on the record date,
being Friday, 19 October 2018 (“Record Date”).

The ratio of the Scrip Distribution Alternative and the
Reinvestment Option has been determined with reference to such RMI
Shareholder’s ordinary shareholding in RMI (at 12:00 on the Record
Date) in relation to the ratio that 65 cents or the Cash Dividend
(net of any applicable taxes), in the Scrip Distribution
Alternative or Reinvestment Option, respectively, bears to the
issue price being R38.00 per share, which is a 4.3% discount to
the closing price on Friday, 7 September 2018 for RMI Shareholders
electing such option.

The number of capitalisation shares which RMI Shareholders may
elect to receive under the Scrip Distribution Alternative has been
determined in the ratio of 1.71053 fully paid RMI Shares for every
100 RMI Shares held on the Record Date.

The reinvestment shares will be issued in consideration for the
amount of the Cash Dividend (net of any applicable taxes) as
elected to be reinvested by RMI Shareholders. The number of
reinvestment shares which RMI Shareholders may elect to receive
under the Reinvestment Option, assuming RMI Shareholders are
liable for the full local 20% dividends tax, has been determined
in the ratio of 1.36842 reinvestment shares for every 100 RMI
Shares held on the Record Date. If no dividends tax is payable,
the number of reinvestment shares which RMI Shareholders may elect
to receive under the Reinvestment Option has been determined in
the ratio of 1.71053 reinvestment shares for every 100 RMI Shares
held on the Record Date.

Trading in the electronic settlement environment operated by
Strate   Proprietary  Limited   does   not permit  fractions  and
fractional entitlements. The JSE Listings Requirements contains a
fractional entitlement principle which provides that fractional
entitlements of shares will be rounded down to the nearest whole
number and a cash payment will be paid for the fractional
entitlement at beneficial owner level.

Accordingly, where an RMI Shareholder’s entitlement to new RMI
Shares in respect of the Scrip Distribution Alternative or the
Reinvestment Option results in a fraction of a new RMI Share, such
fraction will be rounded down to the nearest whole number
resulting in allocations of whole RMI Shares to RMI Shareholders
and a cash payment for the fraction will be made to such RMI
Shareholders (“Rounding Provision”).

The weighted average traded price for RMI Shares on Wednesday, 17
October 2018 (the “VWAP”) less 10% of such weighted average traded
price has been used as the cash value for fractional entitlements
to be paid to RMI Shareholders in accordance with the JSE Listings
Requirements.

RMI Shareholders are accordingly advised that the basis applicable
in determining the cash payment of the fractional entitlement is
3189.6 cents (i.e. 3544 cents, being the VWAP, discounted by 10%)
and 2551.68 cents, net of applicable 20% dividend withholding tax.

Examples of the fractional entitlement cash payments are set out
below:

Example 1 - assumes that an RMI Shareholder holds 1000 RMI Shares
on the Record Date and elects the Scrip Distribution Alternative:
New RMI Share entitlement = 17.1053 new RMI Shares.
The Rounding Provision described above is then applied and the RMI
Shareholder will receive 17 new RMI Shares in respect of the 1000
RMI Shares held and a cash payment for the fractional entitlement
of 0.1053 x 3189.6 = 335.86488 cents. Assuming the fractional
entitlement payment in respect of this example is subject to 20%
dividend withholding tax, the net cash payment will be 268.69190
cents.

Example 2 - assumes that an RMI Shareholder holds 1000 RMI Shares
on the Record Date and elects the Reinvestment Option and assuming
the fractional entitlement payment is subject to 20% dividend
withholding tax:
New RMI Share entitlement = 13.6842 new RMI Shares.
The Rounding Provision described above is then applied and the RMI
Shareholder will receive 13 new RMI Shares in respect of the 1000
RMI Shares held and a cash payment for the (post-tax) fractional
entitlement of 0.6842 x 3189.6 = 2182.32432 cents.

Example 3 - assumes that an RMI Shareholder in respect of whom no
dividend tax is payable holds 1000 RMI Shares on the Record Date
and elects the Reinvestment Option and the fractional entitlement
payment is not subject to dividend withholding tax:
New RMI Share entitlement = 17.1053 new RMI Shares.
The Rounding Provision described above is then applied and the RMI
Shareholder will receive 17 new RMI Shares in respect of the 1000
RMI Shares held and a cash payment for the fractional entitlement
of 0.1053 x 3189.6 = 335.86488 cents.

Sandton
18 October 2018

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 18/10/2018 10:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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