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SFN SFNP
SFN
SFN / SFNP - Sasfin Holdings Limited - Announcement
SASFIN HOLDINGS LIMITED
(Incorporated In the Republic Of South Africa)
(Registration Number 1987/002097/06)
("Sasfin" or "the Company")
Ordinary share code: SFN ISIN: ZAE000006565
Preference share code: SFNP ISIN: ZAE000060273
SASFIN HOLDINGS LIMITED (`SASFIN` OR "THE COMPANY") NON-REDEEMABLE, NON-
CUMULATIVE, NON-PARTICIPATING VARIABLE RATE PREFERENCE SHARES ("PREFERENCE
SHARES"): POTENTIAL EFFECTS OF THE PROPOSED CHANGES IN SECONDARY TAX ON
COMPANIES ("STC") AND THE TAXATION OF DIVIDENDS ON SASFIN PREFERENCE SHARES
INTRODUCTION
Sasfin preference shareholders are advised that in the 2007 budget speech the
Honourable Minister of Finance announced the phasing out of STC and the
introduction of a withholding tax on all company distributions received by a
shareholder, including dividends received in respect of preference shares.
These changes will be effected in two stages. Firstly, the rate of STC will be
reduced from 12,5% to 10% with effect from 1 October 2007. Secondly, STC will
be replaced with a dividend tax, expected to be 10%, at shareholder level, which
is planned for 2008 ("the proposed amendments").
EFFECT OF THE INTRODUCTION OF THE TAXATION ON DIVIDENDS
The proposed amendments will shift the tax obligation from Sasfin to preference
shareholders as STC (payable by the company) is replaced with a withholding tax
(payable by the preference shareholders on receipt of the preference share
dividends). In practice the proposed amendments will result in the company
withholding the tax on the preference share dividend and paying the preference
shareholder the dividend net of tax. This could result in preference
shareholders receiving a lesser amount than they currently receive tax free if
the dividend on preference shares is not adjusted.
AMENDMENTS TO THE TERMS OF THE PREFERENCE SHARES
The company has been advised that the provisions of its Articles of Association
("articles") relating to its preference shares currently do not cater
specifically for the proposed amendments. The articles will have to be amended
to allow the company to adjust its preference share dividend to ensure that
preference shareholders are not prejudiced as a result of the proposed
amendments. In essence, on the basis of the company`s present knowledge and
without the benefit of the legislation that will be passed, the company proposes
grossing up the preference share dividend. The gross up will be the lower of the
net benefit the Company will gain as a result of the abolition of STC or a
sufficient increase in the preference share dividend such that the preference
shareholders receive the same dividend after tax as they currently receive,
immediately after the introduction of the withholding tax.
The commencement of this process, however, is subject to the publication of
the final taxation regulations and legislation in the Government Gazette and the
confirmation of the company`s interpretation of the 2007 budget speech, approval
of the board of directors of Sasfin, the passing of the required special
resolutions by the shareholders of Sasfin (including a separate meeting of the
preference shareholders), and possible regulatory approvals.
The company will publish further announcements in this regard to keep preference
shareholders informed of its progress and intentions.
For further information please contact:
Name: Freddie du Plessis
Tel: 011 809 7500
e-mail: fduplessis@sasfin.com
16 April 2007
Johannesburg
Lead Sponsor
KPMG SERVICES (PTY) LTD
Joint sponsor
SASFIN CAPITAL
A DIVISION OF SASFIN BANK LIMITED
Date: 16/04/2007 13:05:01 Produced by the JSE SENS Department.
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