| Thu 15 Mar 2012, 8:55 | | FSR/FSRP/FST - FirstRand Limited - Changes to secondary tax on companies and the |
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FSR/FSRP/FST - FirstRand Limited - Changes to secondary tax on companies and the
introduction of dividend tax.
FirstRand Limited
(Incorporated in the Republic of South Africa)
Registration number: 1966/010753/06
JSE Share code: FSR ISIN: ZAE000066304
B Preference share code: FSRP ISIN: ZAE000060141
NSX Share code: FST
("FirstRand" or "the Company")
Certain entities within the FirstRand Group are authorised financial services
and credit providers.
CHANGES TO SECONDARY TAX ON COMPANIES AND THE INTRODUCTION OF DIVIDEND TAX.
AMENDMENTS, THAT WILL BE PROPOSED TO FIRSTRAND`S VARIABLE RATE, NON-CUMULATIVE,
NON REDEEMABLE B PREFERENCE SHARES ("THE B PREFERENCE SHARES"), AND THE
CUMULATIVE, REDEEMABLE PREFERENCE SHARES ISSUED BY SUBSIDIARIES OF FIRSTRAND
("UNLISTED REDEEMABLE PREFERENCE SHARES")
B Preference Shares
B Preference Shareholders are referred to the SENS announcements released by
FirstRand on 27 February 2007 and 1 March 2007 ("the 2007 SENS Announcements")
dealing with the proposed changes to secondary tax on companies ("STC") and the
introduction of Dividend tax in terms of Part VIII of Chapter II of the Income
Tax Act, 1962 ("Dividend Tax") and the manner in which these changes impact the
B Preference Shareholders. In the 2007 Sens announcements, FirstRand
communicated the intention to gross-up the dividend on the B Preference Shares
by the commensurate benefit that FirstRand would obtain as a result of such
changes made to STC and/or Dividend Tax.
The board of FirstRand has agreed to propose to shareholders that the "B"
preference dividend for each of the "B" preference shares will be calculated in
arrear with effect from the last Monday in August 2012 at a rate of 75,56%
(currently 68%) of FirstRand Bank Limited`s minimum overdraft rate.
The effect of the proposal, if approved by shareholders, is that the preference
dividend that will be paid in August 2012, and in respect of the dividend
periods thereafter, will be calculated at the revised rate.
The proposed gross-up is in terms of the preferences, rights, limitations and
other terms associated with the "B" preference shares.
In order to amend the dividend rate as stated above, an amendment to the
Company`s Memorandum of Incorporation will be proposed to shareholders at a
general meeting planned to take place in May 2012. The amendment will require
the approval of the B Preference Shareholders at a separate class meeting, which
will follow the general meeting. The amendment will also require the approval
of the Bank Supervision Department of the SA Reserve Bank.
Notices of these meetings will be dispatched to shareholders in due course.
Unlisted Redeemable Preference Shares
FirstRand Bank Limited ("FirstRand Bank") and/or FirstRand Investment Holdings
(Proprietary) Limited ("FRIHL"), both wholly owned subsidiaries of FirstRand,
have issued Unlisted Redeemable Preference Shares.
As a result of the introduction of Dividend Tax, the FirstRand Bank and FRIHL
boards have agreed to increase the dividend rate applicable to all classes of
Unlisted Redeemable Preference Shares, by 11,11% in terms of the conditions
attaching thereto and to achieve the objectives that we have set for the
FirstRand "B" preference shareholders.
This increase is limited to 11.11% notwithstanding that Dividend Tax has
subsequently been introduced at a rate of 15% and does not extend to future
amendments thereto, unless specifically provided for in the subscription
agreements.
Sandton
15 March 2012
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 15/03/2012 08:55:00 Produced by the JSE SENS Department.
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