| Thu 10 May 2012, 8:27 | | DSBP - Discovery Holdings Limited - B Preference Share Dividend |
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DSY DSBP
DSY
DSBP - Discovery Holdings Limited - B Preference Share Dividend
Discovery Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
ISIN: ZAE000158564 Code: DSBP
("Discovery" or "the Company")
B PREFERENCE SHARE DIVIDEND
Holders of Discovery non-cumulative, non-participating, non-convertible
preference shares ("Discovery B Preference Shares") are referred to the:
* abridged pre-listing statement dated 2 August 2011;
* terms and conditions of the B Preference Shares as set out in Article
53 of Discovery`s Memorandum of Incorporation ("MOI");
* announcement, released on the SENS on 10 August 2011, dealing with the
listing of Discovery B Preference Share dividends; and
* proposed amendments to the tax legislation regarding the changes to
Secondary Tax on Companies ("STC") and the introduction of a dividend
withholding tax on all dividend distributions by a company to its
shareholders, as contemplated in sections 64D to 64N of the Income Tax
Act, 58 of 1962, as amended ("Income Tax Act") ("Dividend Withholding
Tax").
The impact of the change in the Income Tax Act is that STC has been abolished as
at 31 March 2012 and that Dividend Withholding Tax has been introduced for
dividends paid after 1 April 2012 at a rate of 15%, subject to certain
exemptions.
The board of Discovery has taken advice on the application of the provisions of
Article 53 of Discovery`s MOI, considered the fair and reasonable expectations
of both the B preference shareholders and ordinary shareholders; and decided to
increase the preference share dividend rate by a factor of 1 / (1 - 15%) or
17.6%. The board has therefore determined that, the dividend rate applicable to
the B Preference Shares issued by Discovery will be calculated, with effect from
1 April 2012, at a rate of 100% (currently 85%) of FirstRand Bank Limited`s
prime overdraft lending rate, as published from time to time ("Prime").
The effect of this adjustment is that the preference share dividend accruing in
respect of the B Preference Shares, for the period from 1 January 2012 to 30
June 2012, will be calculated at the original rate of 85% of prime until 31
March 2012, and at the increased dividend rate of 100% of Prime with effect from
1 April 2012. The increased rate of 100% of Prime shall apply for dividend
periods applicable to the B Preference Shares occurring after 30 June 2012.
In the event of Dividend Withholding Tax increasing beyond 15%, there will be no
further upward adjustment to the Preference Share Dividend rate.
Sandton
10 May 2012
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 10/05/2012 08:27:01 Produced by the JSE SENS Department.
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