| Wed 25 Jul 2007, 15:04 | | BAW - Barloworld - South African Tax Consideration |
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BAW BAWP
BAW
BAW - Barloworld - South African Tax Considerations
Barloworld Limited
(Incorporated in the Republic of South Africa)
(Registration number 1918/000095/06)
(Share code: BAW)
(ISIN: ZAE000026639)
(Share code: BAWP)
(ISIN: ZAE000026647)
("Barloworld")
SOUTH AFRICAN TAX CONSIDERATIONS
Allocation of the tax cost of the Barloworld Limited ("Barloworld") ordinary
shares on unbundling of Pretoria Portland Cement Company Limited ("PPC")
The purpose of this shareholder communication is to advise Barloworld
shareholders of the closing prices of the PPC unbundled shares and the
Barloworld ordinary shares on 17 July 2007, and of the ratio in which the
expenditure incurred in connection with the acquisition of the Barloworld
ordinary shares, or their valuation date values, as the case may be, must to be
allocated to the PPC unbundled shares and the Barloworld ordinary shares (the
"allocation ratio"). The example is given for illustrative purposes only and
should not be relied upon for any other purpose. Shareholders are therefore
advised in all circumstances to seek their own advice regarding taxation.
The distribution of PPC shares by Barloworld on 16 July 2007 in terms of an
unbundling transaction under section 46 of the Income Tax Act, No. 58 of 1962,
as amended, required each shareholder to allocate the expenditure incurred in
connection with the acquisition of the Barloworld ordinary shares and/or the
valuation date value of the Barloworld ordinary shares, as the case may be, to
the PPC unbundled shares and the Barloworld ordinary shares, pro rata, based on
their relative market values at the close of business on the day after
unbundling. In this regard, shareholders are referred to the formula contained
in paragraph 9.3.3 of the unbundling circular dated 17 May 2007. In addition,
the PPC unbundled shares are deemed to have been acquired on the date on which
the Barloworld ordinary shares were acquired.
Barloworld shareholders are advised that the allocation ratio, based on the
relative market values of the PPC unbundled shares and the Barloworld ordinary
shares at the close of business on 17 July 2007, was as follows:
Closing share price Allocation
17 July 2007 Market value Ratio
R R %
PPC unbundled shares 51.30 19,402,823,638 42.48
Barloworld ordinary
shares 128.90 26,274,660,968 57.52
Total 45,677,484,606 100.00
Illustrative example
Assume 10,000 Barloworld ordinary shares were acquired as capital assets on 1
March 2005 and that the total expenditure incurred in connection with the
acquisition of the shares amounted to R600,000, i.e. R60.00 per share. On 16
July 2007, the shareholder acquired 18,555 PPC unbundled shares in the
entitlement ratio of 1.8555:1.
The expenditure incurred in connection with the acquisition of the Barloworld
shares will be allocated to the PPC unbundled shares and the Barloworld ordinary
shares as follows:
PPC Barloworld Total
No of shares held before
unbundling 10,000
Expenditure incurred R600,000.00 R600,000.00
Expenditure per share R60.00
No of shares held after
unbundling 18,555 10,000
Allocation ratio 42.48% 57.52% 100.0%
Revised expenditure in the
allocation
ratio R254,867.23 R345,132.77 R600,000.00
Revised expenditure
per share (rounded) R13.74 R34.51
Date acquired or deemed to have
been acquired 1 Mar 2005 1 Mar 2005
Interim distribution out of share premium
Barloworld had declared the following distribution to ordinary shareholders of
175 cents, comprising a distribution of 111 cents out of share premium and a
dividend of 64 cents out of distributable reserves:
Last date to trade 22 June 2007
Record date 29 June 2007
Payment date 2 July 2007
Shareholders are advised that the distribution out of share premium was a
capital distribution for tax purposes as no portion thereof comprised previously
capitalized reserves. Barloworld ordinary shareholders should consult their own
tax advisors about the tax consequences of the capital distribution on their
personal tax liability.
Financial advisor and Sponsor: JP Morgan
For information purposes only
Date: 25/07/2007 15:04:25 Produced by the JSE SENS Department.
