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ZARCLEAR HOLDINGS LIMITED - Proposed delisting and distribution to shareholders

Release Date: 24/11/2020 16:05
Code(s): ZCL     PDF:  
Wrap Text
Proposed delisting and distribution to shareholders

(Incorporated in South Africa)
(Registration number 2000/013674/06)
Share code: ZCL ISIN: ZAE000262820
(“Zarclear” or the “Company”)


1.   Proposed delisting

     Shareholders are referred to previous SENS announcements relating to the general offer by Legae Peresec Capital
     Proprietary Limited to Zarclear shareholders to purchase Zarclear’s listed securities (“ZCL shares”) at an offer
     price of R4.40 per ZCL share (the “general offer”) and in particular to the results of general offer announcement
     published on SENS on 2 November 2020.

     Shareholders are advised that as a result of the extensive take-up of the general offer, only c.4.22% of Zarclear’s
     total shares in issue are now held by public shareholders, well below the minimum spread requirements for Main
     Board JSE-listed companies.

     Shareholders are further advised that, having regard to the impact that the COVID-19 pandemic has had and is
     anticipated to continue to have on equity capital markets for an extended period, the Company’s board of directors
     (the “Board”) has determined that the costs and expenses associated with the Company’s listings on the JSE and
     A2X are no longer justified. Accordingly, the Board has resolved that it would be in the best interests of Zarclear
     and its shareholders to seek a delisting of Company’s shares from the JSE and A2X on the basis that the delisting
     be accompanied by a fair cash offer to relevant existing shareholders.

     Shareholders will be kept informed of developments by way of announcements as and when appropriate.

2.   Distribution to shareholders

     In anticipation of the proposed delisting, and given that Zarclear will not look to effect further investments at least
     until the delisting is completed, the Board has resolved to return excess cash to shareholders by declaring a capital
     reduction distribution as a return of contributed tax capital (the “distribution”).

     Pursuant to the distribution, Zarclear shareholders will receive R1.90 for every ZCL share held on the record date,
     as set out in paragraph 2.1 below, which equates to an aggregate distribution amount of R429 524 822.40.

     The distribution is not subject to shareholder approval.

     2.1.   Salient dates and times

            The salient dates and times in relation to the distribution are as follows:
            Distribution declaration and finalisation date                                        Tuesday, 24 November
            Last day to trade in ZCL shares in order to receive the distribution                   Tuesday, 8 December
            Trading in ZCL shares ‘ex’ the entitlement to receive the distribution               Wednesday, 9 December
            Record date for the distribution                                                       Friday, 11 December
            Payment of distribution to shareholders                                                Monday, 14 December
            Shares may not be dematerialised or rematerialised between Wednesday, 9 December 2020 and Friday,
            11 December 2020, both days inclusive.

      2.2.  Working capital statement

            The Board is of the opinion that, after considering the effect of the distribution and all reasonably
            foreseeable financial circumstances of the Company:

            2.2.1. following the distribution, the assets of the Company, as fairly valued, will equal or exceed the
                   liabilities of the Company, as fairly valued; and

            2.2.2. it appears that the Company will be able to pay its debts as they become due in the ordinary course
                   of business for a period of 12 months following the distribution.

      2.3.  Taxation considerations relating to the distribution

            The summary below contains a high-level, generic discussion of the most relevant South African tax
            implications applicable to South African tax residents that hold Zarclear shares.

            The distribution will be made in reduction of the contributed tax capital of Zarclear and should constitute
            a “return of capital” as defined in section 1 of the Income Tax Act. The proposed distribution is accordingly
            not a dividend as defined in the Income Tax Act and will therefore not attract dividends tax.

            Zarclear shareholders who hold their shares as capital assets will be required in terms of paragraph 76B of
            the Eighth Schedule to the Income Tax Act to reduce the base cost of their ZCL shares with the amount of
            the distribution. If the amount of the return of capital exceeds the base cost of the ZCL shares in the hands
            of the shareholders, the excess will constitute a capital gain in the hands of the shareholders and the
            shareholders must account for capital gains tax on such capital gain, unless the shareholders can rely on a
            capital gains tax exemption. Zarclear shareholders who hold their shares as trading stock should obtain
            advice on the correct tax treatment of the return of capital.

            The information provided above does not constitute tax advice and shareholders are advised to obtain
            appropriate advice from their professional advisers in this regard.

            ZCL shares in issue at the date of declaration of the proposed distribution: 226 065 696

            Zarclear’s income tax reference number: 9184137140

24 November 2020

Corporate advisor and sponsor to Zarclear
Java Capital

Date: 24-11-2020 04:05:00
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