| Mon 6 Feb 2012, 16:35 | | ABSP - Absa Bank Limited - Changes to secondary tax on companies and the |
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JSE ABSP
ABSP
ABSP - Absa Bank Limited - Changes to secondary tax on companies and the
introduction of dividend tax and their effect on Absa Bank Limited non-
cumulative non-redeemable preference shares
ABSA BANK LIMITED
Registration number: 1986/004794/06
Authorised financial services and registered credit provider (NCRCP7)
Incorporated in the Republic of South Africa
ISIN: ZAE000079810
JSE share code: ABSP
(Absa, Absa Bank, the Bank or the Company)
CHANGES TO SECONDARY TAX ON COMPANIES AND THE INTRODUCTION OF DIVIDEND TAX AND
THEIR EFFECT ON ABSA BANK LIMITED NON-CUMULATIVE NON-REDEEMABLE PREFERENCE
SHARES
The Absa Bank Limited ("Absa Bank") non-cumulative non-redeemable preference
shares ("ABSP Preference Shares") shareholders (the "ABSP Preference
Shareholders") are referred to the SENS announcement of 20 March 2007 ("the 2007
SENS Announcement") dealing with the proposed changes in secondary tax on
companies ("STC") and the introduction of taxation of dividends ("the Dividend
Tax") and the manner in which these changes impact on the ABSP Preference
Shares.
The board of Absa Bank has agreed that with effect from 1 April 2012 dividends
payable in respect of the ABSP Preference Shares be adjusted (grossed-up), as a
result of the introduction of Dividend Tax, more specifically Part VIII of
Chapter II of the Income Tax Act, 1962 to come into effect on 1 April 2012.
Initially, Absa Bank communicated in the 2007 SENS Announcement that the
intention is to gross-up the dividend on the ABSP Preference Shares by the lower
of (i) the benefit that Absa Bank will receive as a result of the Dividend Tax
becoming effective; and (ii) an increase in the ABSP Preference Share dividend
yield that is sufficient to ensure that ABSP Preference Shareholders receive the
same after-tax dividend as they did prior to the Dividend Tax becoming
effective.
The Absa Bank board has now, in the interest of all the ABSP Preference
Shareholders, resolved to gross-up the dividend on the ABSP Preference Shares
such that an increase in the ABSP Preference Share dividend yield is sufficient
to ensure that ABSP Preference Shareholders receive at least the same after-tax
dividend as they did prior to the Dividend Tax becoming effective. The gross-up
is limited to the introduction of the Dividend Tax in its current form and does
not extend to any future amendments thereto.
The amendments to the terms of the ABSP Preference Shares in order to adjust the
dividend yield as stated above will require the passing of a resolution by the
ABSP Preference Shareholders at a separate class meeting approving the
amendments (the resolution to be passed in the same manner, mutatis mutandis, as
a special resolution).
In order to give effect to the above, symbol "B" in the formula referred to
under "Entitlements to dividends" in the pre-listing statement will be increased
from 63% to 70%. These changes will not have an impact on the distribution of
dividend number 12, but will take effect from preference dividend number 13 for
the period 1 March 2012 to 31 August 2012.
Date: 6 February 2012
Sponsor:
J. P. Morgan Equities Limited
Enquiries:
Alan Hartdegen (Head of Investor Relations)
Telephone: (+27 11) 350 5926
Telefax: (+27 11) 350 5924
E-mail: Investorrelations@absa.co.za
Date: 06/02/2012 16:35:01 Produced by the JSE SENS Department.
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