| Wed 15 Dec 2010, 11:08 | | FSR - FirstRand Limited - Apportionment of cost for taxation and/or capital |
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FSR
FSR
FSR - FirstRand Limited - Apportionment of cost for taxation and/or capital
gains tax purposes in respect of the unbundling by Firstrand of its 59.3%
ordinary shareholding in MMI Holdings Limited
FirstRand Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/010753/06)
Share code: FSR
ISIN: ZAE000066304
("FirstRand")
APPORTIONMENT OF COST FOR TAXATION AND/OR CAPITAL GAINS TAX PURPOSES IN RESPECT
OF THE UNBUNDLING BY FIRSTRAND OF ITS 59.3% ORDINARY SHAREHOLDING IN MMI
HOLDINGS LIMITED
1. Introduction
FirstRand Holdings Limited ("FirstRand") ordinary shareholders ("FirstRand
shareholders") are referred to the circular dated 6 September 2010 regarding the
unbundling by FirstRand of its 59.3% ordinary shareholding in MMI Holdings
Limited ("MMI Holdings") to FirstRand shareholders (the "circular").
On 13 December 2010, FirstRand unbundled and distributed, in compliance with
section 90 of the Companies Act, 1973 and in terms of section 46 of the Income
Tax Act, 1962 ("Income Tax Act"), 951 496 294 MMI Holdings ordinary shares ("MMI
Holdings shares") to FirstRand shareholders recorded as such in the shareholders
register of FirstRand on 10 December 2010 ("record date") such that each
FirstRand shareholder received 16.8766 MMI Holdings shares for every 100
FirstRand shares held on the record date (the "Unbundling").
As detailed in annexure 5 to the circular, FirstRand shareholders will have a
combined expenditure ("combined expenditure") in respect of their FirstRand
shares ("retained FirstRand shares") and the MMI Holdings shares received
pursuant to the unbundling ("unbundled MMI Holdings shares"). For retained
FirstRand shares held on trading account, the combined expenditure will be equal
to the original expenditure incurred in respect of such retained FirstRand
shares, as contemplated in section 11(a), section 22(1) or section 22(2) of the
Income Tax Act. For retained FirstRand shares held on capital account, the
combined expenditure will be equal to the original expenditure incurred in
respect of such retained FirstRand shares, as contemplated in paragraph 20 of
the Eighth Schedule to the Income Tax Act.
The purpose of this announcement is to notify FirstRand shareholders of the
apportionment ratio to be applied to the combined expenditure in determining the
portion of the combined expenditure to be allocated to the unbundled MMI
Holdings shares and the retained FirstRand shares.
2. The apportionment ratio
The ratio of the respective market values of a retained FirstRand share held
after the Unbundling and an unbundled MMI Holdings share on the JSE as at close
of trade on Tuesday, 14 December 2010 was 86.94708% relating to a retained
FirstRand share held after the Unbundling and 13.05292% relating to an unbundled
MMI Holdings share ("apportionment ratio").
The apportionment ratio is to be used to apportion the combined expenditure
between the unbundled MMI Holdings shares and the retained FirstRand shares for
the determination of profits and losses, of a capital or trading nature, to be
derived on any future disposals of the unbundled MMI Holdings shares and/or the
retained FirstRand shares. Similarly, the apportionment ratio is also to be
used to apportion the capital gains tax valuation (where applicable) of the
retained FirstRand shares, as contemplated in paragraph 29 of the Eighth
Schedule to the Income Tax Act, between the unbundled MMI Holdings shares and
the retained FirstRand shares.
Finally, in determining the base cost for the unbundled MMI Holdings shares and
the retained FirstRand shares for capital gains tax purposes, FirstRand
shareholders are deemed to have acquired both the retained FirstRand shares and
the unbundled MMI Holdings shares on the dates on which the retained FirstRand
shares were originally acquired.
FirstRand shareholders are advised to consult their own tax advisors should they
have any queries regarding the taxation consequences of the Unbundling and the
calculation of their costs for taxation purposes.
15 December 2010
Merchant bank and sponsor to FirstRand
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal advisors to FirstRand
Webber Wentzel
Sponsor in Namibia to FirstRand
Simonis Storm Securities (Pty) Limited
Date: 15/12/2010 11:08:03 Produced by the JSE SENS Department.
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