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DATATEC LIMITED - Cash dividend and scrip distribution alternative

Release Date: 03/07/2019 10:30
Code(s): DTC     PDF:  
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Cash dividend and scrip distribution alternative

Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec" or "the Company")

CASH DIVIDEND AND SCRIP DISTRIBUTION ALTERNATIVE

1. Introduction

Shareholders are referred to the announcements released on the Stock
Exchange News Service (“SENS”) on 6 June 2017 and on 4 September 2017,
detailing the terms and completion of the disposal of its Westcon-Comstor
business in North America and Latin America and 10% of the remaining part
of Westcon to SYNNEX Corporation (“SYNNEX Transaction”).

The proceeds of the SYNNEX Transaction comprised US$630 million payable in
cash on completion in September 2017 and up to US$200 million payable as a
cash earn-out, subject to Westcon Americas meeting certain agreed gross
profit performance targets (“SYNNEX earn out”).

In the Company’s announcement on SENS on 29 May 2019, the Board confirmed
the outcome of the arbitration to determine the quantum of the SYNNEX earn
out (US$14 million) and reiterated its intention to return the SYNNEX earn
out to Shareholders.

2. The distribution to Shareholders

Notice is hereby given that the board of directors of Datatec (“Board”) has
declared a gross Cash Dividend of 100 ZAR cents per ordinary Datatec share
held on the Record Date, being Friday 26 July 2019 (“Cash Dividend”).

Shareholders will, however, be entitled to elect to receive a scrip
distribution of new, fully-paid Datatec ordinary Shares in proportion to
their ordinary shareholding in Datatec on the Record Date, being Friday, 26
July 2019 (“Scrip Distribution Alternative”), instead of the Cash Dividend.
Shareholders are not required to pay for the Datatec ordinary shares to
which they are entitled in terms of an election to receive the Scrip
Distribution Alternative.

3. Terms of the Cash Dividend

The Cash Dividend is subject to approval by the Financial Surveillance
Department of the South African Reserve Bank (“SARB”). A finalisation
announcement confirming, inter alia, receipt of SARB approval will be
released on SENS by no later than Tuesday, 16 July 2019.

The Cash Dividend will be paid out of the Company’s distributable retained
profits. A Dividend Withholding Tax of 20% will be applicable to all
shareholders not exempt therefrom, after deduction of which the net Cash
Dividend is 80 ZAR cents per Datatec ordinary share.

Shareholders not electing to receive the Scrip Distribution Alternative in
respect of all or part of their ordinary shareholding will, without any
action on their part, be entitled to receive the Cash Dividend in
proportion to their ordinary shareholding as at the close of business on
the Record Date, being Friday, 26 July 2019.

The Board has conducted the solvency and liquidity test as required in
terms of section 4(1) of the Companies Act, Act 71 of 2008. The Company’s
total number of issued ordinary shares is 214,800,000 (of these issued
ordinary shares, the Company holds 650,000 ordinary shares in treasury).
Datatec’s South African income tax reference number is 9999/493/71/2.

2. Terms of the Scrip Distribution Alternative

The number of Scrip Distribution shares to which each shareholder will
become entitled pursuant to the Scrip Distribution Alternative (to the
extent that such shareholders elect to receive the Scrip Distribution
shares) will be determined by reference to such shareholder’s ordinary
shareholding in Datatec (at the close of business on the Record Date, being
Friday, 26 July 2019) in relation to the ratio that 100 ZAR cents bears to
the volume weighted average price (“VWAP”) of a Datatec ordinary share
traded on the JSE during the 30-day trading period ending on Monday,
15 July 2019. Details of the ratio will be announced on SENS in accordance
with the timetable below.

Where a shareholder’s entitlement to new Datatec ordinary shares calculated
in accordance with the above formula gives rise to a fraction of a new
ordinary share, such fraction of a new ordinary share will be rounded down
to the nearest whole number, resulting in allocations of whole ordinary
shares and a cash payment for the fraction.

The applicable cash payment will be determined with reference to the VWAP
of a Datatec ordinary share traded on the JSE on Wednesday,24 July 2019,
(being the day on which an ordinary Datatec share begins trading ‘ex’ the
entitlement to receive the Cash Dividend or the Scrip Distribution
Alternative), discounted by 10%. The applicable cash payment will be
announced on SENS on Thursday, 25 July 2019.

The Datatec new ordinary shares will, pursuant to the Scrip Distribution
Alternative, be settled by way of capitalisation of the Company’s
distributable retained profits.

3. Circular and salient dates

A circular providing shareholders with full details on the Cash Dividend
and the Scrip Distribution Alternative, including a Form of Election to
elect to receive the Scrip Distribution Alternative, will be posted to
shareholders today, Wednesday, 3 July 2019. The salient dates and events
thereafter are as follows:

EVENT                                                                   2019
Announcement released on SENS in respect of                 Tuesday, 16 July
the ratio applicable to the Scrip
Distribution Alternative, based on the 30-
day VWAP ending on Monday, 15 July 2019, by
11h00 on
Announcement published in the press of the                Wednesday, 17 July
ratio applicable to the Scrip Distribution
Alternative, based on the 30-day VWAP ending
on Monday, 15 July 2019 on
Last day to trade in order to be eligible                   Tuesday, 23 July
for the Cash Dividend and the Scrip
Distribution Alternative
Ordinary Shares trade ‘ex’ the Cash Dividend              Wednesday, 24 July
and the Scrip Distribution Alternative on
Listing and trading of maximum possible                   Wednesday, 24 July
number of Datatec ordinary Shares on the JSE 
in terms of the Scrip Distribution
Alternative from the commencement of
business on
Announcement released on SENS in respect of                Thursday, 25 July
the cash payment applicable to fractional
entitlements, based on the VWAP of a Datatec
ordinary share traded on the JSE on
Wednesday, 24 July 2019, discounted by 10%,
on
Last day to elect to receive the Scrip                       Friday, 26 July
Distribution Alternative instead of the Cash
Dividend, Forms of Election to reach the
Transfer Secretaries by 12h00 on
Record Date in respect of the Cash Dividend                  Friday, 26 July
and the Scrip Distribution Alternative
Cash Dividend payments made and Scrip                        Monday, 29 July
Distribution certificates posted,
CSDP/broker accounts credited/updated, as
applicable, on
Announcement relating to the results of the                  Monday, 29 July
Cash Dividend and the Scrip Distribution
Alternative released on SENS on
Announcement relating to the results of the                 Tuesday, 30 July
Cash Dividend and the Scrip Distribution
Alternative published in the press on
JSE listing of Datatec ordinary Shares in                 Wednesday, 31 July
respect of the Scrip Distribution
Alternative adjusted to reflect the actual
number of ordinary Shares issued in terms of
the Scrip Distribution Alternative at the
commencement of business on or about

All times provided are South African local times. The above dates and times
are subject to change. Any material change will be announced on SENS.

Share certificates may not be dematerialised or rematerialised between
Wednesday, 24 July 2019 and Friday, 26 July 2019, both days inclusive.


3 July 2019

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

Date: 03/07/2019 10:30:00 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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