| Mon 6 Dec 2010, 16:37 | | MVG/MVGP - Mvela Group - Mvelaserve Unbundling - Apportionment Ratio for South |
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MVG/MVGP - Mvela Group - Mvelaserve Unbundling - Apportionment Ratio for South
African Taxation Purposes
Mvelaphanda Group Limited
Registration Number: 1995/004153/06
(Incorporated in the Republic of South Africa)
Ordinary share code: MVG
ISIN: ZAE000060737
Preference share code: MVGP
ISIN: ZAE000073540
("Mvela Group" or "the Company")
MVELASERVE UNBUNDLING - APPORTIONMENT RATIO FOR SOUTH AFRICAN TAXATION PURPOSES
1. Introduction
Holders of ordinary shares ("Mvela Group Shares"), redeemable option-holding
shares and convertible perpetual cumulative preference shares in Mvela Group
(collectively "Shareholders") are referred to the announcement by Mvela Group
released on the Securities Exchange News Service on Wednesday, 27 October 2010
and the circular to Shareholders dated Wednesday, 27 October 2010 ("the
Circular") regarding the proposed separate listing of the ordinary shares in
Mvelaserve Limited ("Mvelaserve") ("Mvelaserve Shares") on the securities
exchange operated by JSE Limited (the "JSE") ("the Mvelaserve Listing") and the
subsequent unbundling by Mvela Group of all of its ordinary shares in Mvelaserve
("the Unbundling") .
The Unbundling is to be effected by way of an unbundling transaction in terms of
section 46 of the Income Tax Act, 1962 (No. 58 of 1962), as amended ("Income Tax
Act"), and in compliance with section 90 of the Companies Act (No. 61 of 1973),
as amended, in the ratio of 25.034 Mvelaserve Shares for every 100 Mvela Group
Shares held on Friday, 3 December 2010, the unbundling record date ("Record
Date").
The purpose of this announcement is to notify holders of Mvela Group Shares of
the closing prices of Mvelaserve Shares and Mvela Group Shares on the JSE on the
Record Date, and the cost apportionment ratio in which the expenditure incurred
and/or the valuation of Mvela Group Shares must be allocated to the Mvelaserve
Shares received in terms of the Unbundling and the Mvela Group Shares for South
African taxation purposes (the "Apportionment Ratio").
2. Apportionment Ratio and closing share prices
The Apportionment Ratio for purposes of Section 46 of the Income Tax Act is
46.08135% relating to a Mvela Group Share and 53.91865% to a Mvelaserve Share,
based on the closing share prices of a Mvela Group Share and a Mvelaserve Share
on the JSE on the Record Date of R2.76 and R12.90, respectively.
The Apportionment Ratio is to be used, after the Unbundling, to apportion the
expenditure incurred in respect of a Mvela Group ordinary share held. The
expenditure must be apportioned between the Mvela Group Share held after the
Unbundling and the Mvelaserve Share received in terms of the Unbundling for the
purposes of determining the profits or losses, of a capital or trading nature,
derived from any future disposal of the Mvela Group Share or Mvelaserve Share. A
summary of the South African tax considerations relating to the Unbundling is
set out on pages 41 to 43 of the Circular. Holders of Mvela Group Ordinary
Shares are, however, advised in all circumstances to seek their own advice
regarding taxation.
Johannesburg
6 December 2010
Corporate adviser and transaction sponsor to Mvela Group
Investec Bank Limited
Legal adviser to Mvela Group and Mvelaserve Limited
Cliffe Dekker Hofmeyr Inc
Sponsor to Mvela Group
Deutsche Securities (SA) (Proprietary) Limited
Date: 06/12/2010 16:37:02 Produced by the JSE SENS Department.
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