| Wed 16 Mar 2011, 15:17 | | RMH - RMB Holdings Limited - Apportionment of cost for taxation and/or capital |
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RMH
RMH
RMH - RMB Holdings Limited - Apportionment of cost for taxation and/or capital
gains tax purposes in respect of the unbundling by RMBH of its 100% ordinary
shareholding in Rand Merchant Insurance Holdings Limited
RMB Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/005115/06)
(Share Code: RMH)
(ISIN: ZAE000024501)
("RMBH" or "the Company")
APPORTIONMENT OF COST FOR TAXATION AND/OR CAPITAL GAINS TAX PURPOSES IN RESPECT
OF THE UNBUNDLING BY RMBH OF ITS 100% ORDINARY SHAREHOLDING IN RAND MERCHANT
INSURANCE HOLDINGS LIMITED ("RMI HOLDINGS")
1. Introduction
RMB Holdings Limited ordinary shareholders ("RMBH shareholders") are referred to
the circular dated 3 February 2011 regarding the restructuring of the Company
including the unbundling by RMBH of its 100% ordinary shareholding in RMI
Holdings to RMBH shareholders (the "circular").
On 14 March 2011, RMBH 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"), 1 351 290 313 RMI Holdings ordinary shares ("RMI
Holdings shares") to RMBH shareholders recorded as such in the shareholders
register of RMBH on 11 March 2011 ("record date") such that each RMBH
shareholder received one RMI Holdings share for every RMBH ordinary share held
on the record date (the "Unbundling").
As detailed in annexure 6 to the circular, RMBH shareholders will have a
combined expenditure ("combined expenditure") in respect of their RMBH ordinary
shares ("retained RMBH shares") and the RMI Holdings shares received pursuant to
the Unbundling ("unbundled RMI Holdings shares"). For retained RMBH shares held
on trading account, the combined expenditure will be equal to the original
expenditure incurred in respect of such retained RMBH shares, as contemplated in
section 11(a), section 22(1) or section 22(2) of the Income Tax Act. For
retained RMBH shares held on capital account, the combined expenditure will be
equal to the original expenditure incurred in respect of such retained RMBH
shares, as contemplated in paragraph 20 of the Eighth Schedule to the Income Tax
Act.
The purpose of this announcement is to notify RMBH 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 RMI
Holdings shares and the retained RMBH shares.
2. The apportionment ratio
The ratio of the respective market values of a retained RMBH share held after
the Unbundling and an unbundled RMI Holdings share on the JSE as at close of
trade on Tuesday, 15 March 2011 was 68.23% relating to a retained RMBH share
held after the Unbundling and 31.77% relating to an unbundled RMI Holdings share
("apportionment ratio"). The apportionment ratio was calculated with reference
to the closing share prices of a retained RMBH share and a RMI Holdings share on
the JSE on Tuesday, 15 March 2011 of R24.38 and R11.35 respectively.
The apportionment ratio is to be used to apportion the combined expenditure
between the unbundled RMI Holdings shares and the retained RMBH shares for the
determination of profits and losses, of a capital or trading nature, to be
derived on any future disposals of the unbundled RMI Holdings shares and/or the
retained RMBH shares. Similarly, the apportionment ratio is also to be used to
apportion the capital gains tax valuation (where applicable) of the retained
RMBH shares, as contemplated in paragraph 29 of the Eighth Schedule to the
Income Tax Act, between the unbundled RMI Holdings shares and the retained RMBH
shares.
Finally, in determining the base cost for the unbundled RMI Holdings shares and
the retained RMBH shares for capital gains tax purposes, RMBH shareholders are
deemed to have acquired both the retained RMBH shares and the unbundled RMI
Holdings shares on the dates on which the retained RMBH shares were originally
acquired.
RMBH 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.
16 March 2011
Merchant bank and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal advisors
Webber Wentzel
Independent sponsor
PricewaterhouseCoopers Corporate Finance (Proprietary) Limited
Date: 16/03/2011 15:17:01 Produced by the JSE SENS Department.
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