| Fri 8 Aug 2008, 7:31 | | REM - Remgro Announces R60bn Bat Share Distribution International Investment |
|
REM
REM
REM - Remgro Announces R60bn Bat Share Distribution International Investment
Fund Created, To Be Listed On The JSE
Remgro Limited
(Incorporated in the Republic of South Africa)
(Registration number 1968/006415/06)
Share code: REM
ISIN: ZAE000026480
("Remgro")
REMGRO ANNOUNCES R60bn BAT SHARE DISTRIBUTION INTERNATIONAL INVESTMENT FUND
CREATED, TO BE LISTED ON THE JSE
Remgro today announced the proposed terms to separate its tobacco interests from
its other interests, providing Remgro shareholders with a direct interest in its
R60 billion British American Tobacco plc (BAT) shareholding.
The transaction also resolves the negative impact of a change in taxation on its
Luxembourg based joint venture vehicle R&R Holdings (R&R) and creates a new
international investment fund, Reinet Investments to be established with
Richemont, incorporated in Luxembourg and to be listed on the Luxembourg and
Johannesburg Stock Exchanges.
Remgro owns 10.7% in BAT through its interest in the joint venture vehicle R&R,
a Luxembourg 1929 holding company. The remaining interest in R&R is held by its
co-shareholder, Richemont.
Following a review of alternatives, Remgro and Richemont agreed on a joint
course of action to address the change in tax status of R&R, including the
decentralisation of its tobacco asset and proposals for the reorganisation of
Richemont S.A, a wholly-owned subsidiary of Richemont incorporated in
Luxembourg, into a new investment vehicle, Reinet Investments.
The salient features of the proposed restructuring of Remgro`s interests are:
- R&R Holdings will collapse and Remgro will become the holder of 214 300 000
BAT ordinary shares directly, currently valued at approximately R60 billion
- Richemont S.A will be reorganised into a new investment vehicle, Reinet
Investments controlled by Rupert family interests and chaired by Mr. Johann
Rupert
- Reinet Investments will own as its sole subsidiary Reinet Fund. The
investment objective of Reinet Fund is to achieve long term capital growth. It
will not have any restrictions on the asset classes in which it can invest and
intends, over time, to invest in a diversified portfolio of assets
- Remgro will contribute 21 430 000 or 10% of its BAT ordinary shares to part
capitalise Reinet Investments in exchange for depositary receipts in respect of
Reinet Investments shares
- Remgro will distribute the remaining 90% of its holding in BAT ordinary
shares or 192 870 000 shares and all its depositary receipts in respect of
Reinet Investments shares directly to Remgro shareholders
Subject to the necessary approvals being obtained, Remgro shareholders will
receive:
- 40.6054 BAT ordinary shares; and
- 63.6977 Reinet depositary receipts,
for every 100 Remgro ordinary shares held on the distribution record date 3
November 2008
- The Reinet depositary receipts will be listed on the JSE and will commence
trading on or about Tuesday 21 October 2008
- Reinet Investments will undertake a rights offer following its listing
- Remgro has obtained a binding ruling from SARS regarding the transaction.
In terms of the ruling, the total estimated tax payable, including secondary tax
on companies (STC), capital gains tax and securities transfer tax is
approximately R850 million
- Application will be made by BAT to the JSE for a secondary listing of BAT
ordinary shares, that, subject to the Richemont reconstruction and the Remgro
distribution being implemented, is expected to commence on or before Tuesday 28
October 2008
The benefits of the transaction to Remgro shareholders are:
- Direct exposure to BAT and tradability on the JSE
- Unlocking value from the BAT shareholding
- Tax efficient dividend extraction from the BAT shareholding
- Opportunity to participate in an international investment fund without
utilising existing foreign exchange allowances and tradability on the JSE
Johann Rupert, Chairman of Remgro commented: "Today marks an important and
significant step forward in our commitment to provide Remgro shareholders with
the choice and diversity of investment opportunities. We are placing Remgro`s
tobacco interest directly in shareholders hands and in doing so we`re closing
the valuation discount on R60 billion of shareholder value.
With the formation of Reinet Investments, Remgro shareholders now have an
additional foreign investment platform without using existing foreign exchange
allowances. As chairman and cornerstone investor I am confident of the ability
of both Remgro and Reinet Investments to continue our proud track record of
creating shareholder value."
Thys Visser, CEO of Remgro commented: "This landmark transaction realises
substantial shareholder value and resolves the negative tax consequences of our
holding vehicle in Luxembourg. As a management team we remain focused on
building value in our investment portfolio. We are well positioned for growth
with substantial cash resources and an enviable range of quality assets,
conservatively valued at R50 billion following the BAT distribution."
The transaction is subject to conditions precedent including approval by Remgro
shareholders and the secondary listing of BAT ordinary shares on the JSE.
Rand Merchant Bank advised Remgro on the transaction.
8 August 2008
Enquiries
Remgro 021 888 3000
Thys Visser 021 888 3331
Rand Merchant Bank 011 282 8000
Paul Roelofse 082 379 9337
College Hill 011 447 3030
Johannes van Niekerk 082 921 9110
Nicholas Williams 082 600 2192
Background notes
British American Tobacco plc (BAT)
BAT is one of the world`s leading tobacco groups, with brands sold in more than
180 markets and a strong position in more than 50 markets. Its subsidiaries
produce some 684 billion cigarettes through 47 cigarette factories in 40
countries with four separate factories manufacturing cigars, roll-your-own and
pipe tobacco. BAT manages a portfolio with 300 brands including the four `Global
Drive` Brands: Dunhill, Kent, Lucky Strike and Pall Mall. Much of the growth of
the leading brands is driven by product innovation relating to filters,
flavours, packaging and cigarette formats. BAT has a significant interest in
tobacco leaf growing, working with thousands of farmers internationally. It
employs over 53,000 people worldwide. Refer to www.bat.com.
Luxembourg 1929 holding companies
A Luxembourg 1929 holding company is generally exempt from tax. No withholding
tax is payable on dividend distributions. Consequently, dividends received by
R&R from BAT, which suffer no UK withholding tax, can be paid out to R&R
shareholders free from withholding tax. However, in 2006, Luxembourg abolished
the special tax status of Luxembourg 1929 holding companies with the effect that
from 2010, R&R dividends will be subject to a dividend withholding tax at a rate
of 15 percent. This will inevitably have a significant negative impact on Remgro
shareholders and Richemont unitholders.
Refer to www.remgro.com for more information
Date: 08/08/2008 07:31:01 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.
