Wrap Text
Tax treatment of the Cash Dividend and the 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")
TAX TREATMENT OF THE CASH DIVIDEND AND THE SCRIP DISTRIBUTION ALTERNATIVE
Background
Shareholders are referred to the announcement released on the Stock Exchange
News Service (“SENS”) on Wednesday, 3 July 2019 in which they were advised of
the Company’s declaration of a gross Cash Dividend of 100 ZAR cents per ordinary
Datatec share held on the Record Date (“Cash Dividend”), with the opportunity 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
(“Scrip Distribution Alternative”), instead of the Cash Dividend.
A circular setting out the terms of the Cash Dividend and the Scrip Distribution
Alternative, including a Form of Election to elect to receive the Scrip
Distribution Alternative, was posted to shareholders on Wednesday, 3 July 2019
(“Circular”).
Tax treatment of the Cash Dividend
Shareholders are reminded that, in terms of the Income Tax Act 58 of 1962
(“Income Tax Act”), the Cash Dividend will, unless exempt, be subject to
Dividend Withholding Tax (“DWT”). South African resident Shareholders that are
liable for DWT will be subject to DWT at a rate of 20% of the Cash Dividend and
this amount will be withheld from the Cash Dividend with the result that they
will receive a net amount of 80 ZAR cents per share. Non-resident Shareholders
may be subject to DWT at a rate of less than 20%, depending on their country of
residence and the applicability of any Double Tax Agreement between South Africa
and their country of residence.
South African Reserve Bank approval for the Cash Dividend was obtained prior to
publication of the Circular.
Tax treatment of the Scrip Distribution Alternative
Shareholders are advised that paragraph 3.4.2 of the Circular erroneously states
that the Scrip Distribution Alternative is subject to DWT.
In fact, the Scrip Distribution Alternative is not subject to DWT in terms of
the Income Tax Act, but the subsequent disposal of Datatec ordinary shares
obtained as a result of the Scrip Distribution is likely to have Income Tax or
Capital Gains Tax implications. Where any future disposals of ordinary shares
obtained as a result of the Scrip Distribution are effected, the expenditure
incurred in respect of such shares will be deemed to be nil in terms of the
Income Tax Act.
Shareholders are encouraged to consult their professional advisors, if they are
in any doubt as to what action to take in respect of the Cash Dividend or Scrip
Distribution Alternative.
Remaining salient dates
The remaining salient dates and times applicable to the Cash Dividend and Scrip
Distribution Alternative, also contained in the Circular, are as follows:
EVENT 2019
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. Share certificates may not be
dematerialised or rematerialised between Wednesday, 24 July 2019 and Friday, 26
July 2019, both days inclusive.
Monday, 22 July 2019
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 22/07/2019 03:00:00
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