| Thu 31 May 2012, 17:05 | | REM - Remgro Limited - In specie special dividend distribution by Remgro of 26 |
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REM
REM
REM - Remgro Limited - In specie special dividend distribution by Remgro of 26
687 288 shares in Impala Platinum Holdings Limited ("IMPLATS") to its
shareholders
Remgro Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/006415/06)
(Tax reference number: 9500/124/71/5)
ISIN: ZAE000026480
Share Code: REM
("Remgro" or "the Company")
IN SPECIE SPECIAL DIVIDEND DISTRIBUTION BY REMGRO OF 26 687 288 SHARES IN IMPALA
PLATINUM HOLDINGS LIMITED ("IMPLATS") TO ITS SHAREHOLDERS
1 Introduction
On 31 May 2012, the Board of Remgro has resolved to distribute 26 687 288
shares in Implats which equate to 4,4% of the entire issued share capital
of Implats ("Implats shares") to its ordinary and "B" ordinary shareholders
("Remgro shareholders") in terms of section 46 of the Companies Act, No 71
of 2008 and the provisions of the articles of association of the Company
(the "proposed distribution").
2 Rationale
It was decided to distribute the investment in Implats as the directors
were of the opinion that shareholders should be given the choice of direct
ownership. Implats is a non-strategic passive investment seen as part of
the Group`s cash and near cash position. Remgro currently holds surplus
funds relative to its immediate needs and the Group has historically, from
time to time, returned surpluses to its shareholders by way of special
dividends and dividends in specie.
Distributing the Implats shares directly to shareholders will maximise
shareholders` returns and will eliminate a portion of the discount to net
asset value that Remgro trades at and thus unlock value for shareholders.
The proposed distribution will increase shareholder flexibility, liquidity
and the free float of the Implats shares on the JSE Limited ("JSE").
The distribution of the investment in Implats to its shareholders as a
distribution out of income reserves, afford shareholders the opportunity to
obtain a direct shareholding in Implats.
3 Details of the proposed distribution
Remgro will distribute the Implats shares to shareholders in the ratio of
5.16582 Implats shares for every 100 Remgro ordinary shares or unlisted "B"
ordinary shares ("Remgro shares") held on the record date.
In the event that the distribution results in a Remgro shareholder becoming
entitled to a fraction of an Implats share, the relevant fraction will be
rounded as follows:
- if the fraction is less than 0.5, the Remgro shareholder will have
his/her entitlement to Implats shares rounded down to the nearest
whole number; or
- if the fraction is equal to or greater than 0.5, the Remgro
shareholder will have his/her entitlement to Implats shares rounded up
to the nearest whole number.
4 Pro forma financial effects of the proposed distributionThe table below
summarises the unaudited pro forma financial effects of the proposed
distribution on shareholders based on the unaudited results of Remgro for
the six months ended 31 December 2011.
The unaudited pro forma financial effects are the responsibility of the
Remgro directors and have been prepared for illustrative purposes only to
provide information about how the proposed distribution may affect the
financial position of the shareholders on the relevant reporting date. Due
to its nature, the unaudited pro forma financial effects may not be a fair
reflection of Remgro`s financial position after the implementation of the
proposed distribution or of Remgro`s future earnings.
Unaudited financial Unaudited pro Change
results at 31 forma results (%)
December 2011 before after the
the proposed proposed
distribution distribution
(cents) (cents)
Earnings per Remgro 767.5 1 496.2 94.9
share
Fully diluted earnings 758.6 1 485.4 95.8
per Remgro share
Headline earnings per 515.5 491.5 (4.7)
Remgro share
Fully diluted headline 508.2 484.3 (4.7)
earnings per Remgro
share
Net asset value per 10 841 10 020 (7.6)
Remgro share
Net tangible asset value 10 777 9 956 (7.6)
per Remgro share
Notes:
1. The pro forma financial effects are based on the unaudited results of
Remgro for the six months ended 31 December 2011. The financial impact
on the earnings of Remgro are illustrated as if the proposed
distribution had been completed on 1 July 2011, while the impact on
the net assets of Remgro are shown as if the proposed distribution had
been implemented on 31 December 2011.
2. An Implats ordinary share price of R167.35 at 31 December 2011 was
used in the calculation of the pro forma financial effects.
5 Working capital statement
The Board is of the opinion that, after considering the effect of the
proposed distribution and all reasonably foreseeable financial
circumstances of the Company at that time-
a the assets of the Company, as fairly valued, equal or exceed the
liabilities of the Company, as fairly valued; and
b it appears that the Company will be able to pay its debts as they
become due in the ordinary course of business for a period of 12
months following the proposed distribution.
6 Remgro Limited Equity settled share appreciation rights scheme 2008 ("SAR
scheme")
In terms of the rules of the SAR scheme the original grant price will be
adjusted to ensure that participants are placed in a substantially similar
position to the position that they were in before the proposed
distribution. These adjustments will be determined after the distribution
has been implemented and will be submitted to Remgro`s Remuneration and
Nomination Committee for approval. PwC was appointed to confirm to the JSE
that the adjustments made are in accordance with the provisions of the SAR
scheme.
7 Foreign Remgro shareholders
The distribution of Implats shares to foreign Remgro shareholders may be
affected by the laws of such foreign Remgro shareholders` relevant
jurisdiction. Those foreign Remgro shareholders should consult their
professional advisors as to whether they require any governmental or other
consent or need to observe any other formalities to enable them to
participate in the proposed distribution.
8 Exchange control
Remgro shareholders whose registered address is outside the common monetary
area will need to comply with the exchange control regulations. If Remgro
shareholders are in any doubt as to what action to take they should consult
their professional advisors.
9 Taxation considerations relating to the proposed distribution
Capital Gains Taxation
The base cost of Remgro shareholders, who hold their shares as capital
assets, will remain unchanged as the distribution will be made out of
income reserves. The base cost of the Implats shares will be the market
value as at the close of business on the day before the record date.
Dividends Tax
The in specie special dividend is not subject to dividends tax as Remgro
has approximately R8.8 billion of secondary taxation on companies ("STC")
credits available to apply against the dividend.
The total issued share capital at the date of this announcement amounts to
516 612 722 shares, consisting of 481 106 370 ordinary shares and 35 506
352 B ordinary shares.
Securities Transfer Taxation ("STT")
Remgro will pay the STT on behalf of shareholders.
An announcement regarding the taxation treatment of the distribution will
be released on SENS at a later stage.
10 Salient dates and times
The salient dates and times for the proposed distribution are set out
below:
2012
Last day to trade in Remgro shares in order Friday 15 June
to participate in the proposed distribution
on
Remgro shares trade "ex" entitlement to Monday 18 June
Implats shares in terms of the proposed
distribution on
Record date to participate in the proposed Friday 22 June
distribution, by the close of trade on
Proposed distribution date on Monday 25 June
Dematerialised shareholders will have their Monday 25 June
accounts with their CSDP or broker updated
with the Implats shares received pursuant to
the proposed distribution on
Share certificates in respect of the Implats Monday 25 June
shares will be posted, by registered post,
at the risk of the certificated shareholder
concerned, to certificated shareholders on
or about
Notes:
1. These dates and times are subject to change. Any material change will
be released on SENS.
2. Any reference to time is a reference to South African time.
3. No dematerialisation or rematerialisation of ordinary share
certificates may take place between Monday, 18 June 2012 and Friday,
22 June 2012 both days inclusive.
11 Comment
Jannie Durand, newly appointed CEO of Remgro commented "The proposal to
distribute Implats to our shareholders and by doing so unlock substantial
value for shareholders was the brainchild of Thys Visser, late CEO of
Remgro. The board wishes to recognize Mr Visser for this last act before
his tragic death last month".
31 May 2012
Johannesburg
Merchant bank and sponsor to Remgro
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Attorneys to Remgro
Cliffe Dekker Hofmeyr Incorporated
Date: 31/05/2012 17:05:01 Produced by the JSE SENS Department.
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