| Thu 24 May 2018, 10:22 | | TRADEHOLD LIMITED - Tradehold\Mettle - Tax apportionment and market value in respect of the Tradehold distribution in specie |
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TDH MLE 201805240037A
Tradehold\Mettle - Tax apportionment and market value in respect of the Tradehold distribution in specie
Tradehold Limited Mettle Investments Limited
Incorporated in the Republic of South Africa (formerly Mettle Investments Proprietary
(Registration number 1970/009054/06) Limited)
Incorporated in the Republic of South Africa (Registration number: 2008/002061/06)
Share code: TDH Incorporated in the Republic of South Africa
ISIN: ZAE000152658 Share code: MLE
("Tradehold") ISIN: ZAE000257622
("Mettle Investments")
TAX APPORTIONMENT AND MARKET VALUE IN RESPECT OF THE TRADEHOLD DISTRIBUTION IN SPECIE
Shareholders of Tradehold and Mettle Investments (“Shareholders”) are referred to the
announcements released on the Stock Exchange News Service (“SENS”) of the JSE Limited (“JSE”)
on 14 May 2018, in respect of the separation of Tradehold’s financial services’ businesses from its
property businesses into Mettle Investments, the listing of all the issued shares of Mettle Investments
(“Mettle Investments Shares”) on the Alternative Stock Exchange of the JSE (“the Listing”) and
subsequent distribution of Mettle Investments Shares held by Tradehold to its shareholders (“the
Distribution”).
As detailed in the Mettle Investments pre-listing statement dated 14 May 2018, the Distribution will not
qualify as an “unbundling transaction” as envisaged in section 46 of the Income Tax Act, No 58 of
1962 (“the Income Tax Act”) and will constitute a “foreign dividend” as defined in section 1 of the
Income Tax Act. Accordingly, Tradehold shareholders that are subject to South African Income Tax
will:
- be required to include the “foreign dividend” in their gross income for South African income
tax purposes, but may claim an exemption for all or part of the foreign dividend depending on
their particular facts and circumstances;
- obtain the Mettle Investments Shares at a base cost equal to the market value of the Mettle
Investments Shares on the date of the Distribution, if the Mettle Investments Shares are
acquired and held by the Tradehold Shareholders as a long term investment on capital
account and not with the intention to hold or dispose thereof as part of a scheme of profit
making and/or as trading stock (“the Base Cost”); and
- should not be liable for any dividends tax in respect of the Distribution.
The purpose of this announcement is to advise Shareholders of:
- the market value of a Mettle Investments Share for South African tax purposes; and
- the apportionment of the expenditure incurred by Shareholders between the Mettle
Investments Shares and the Tradehold shares held at the time of the Distribution.
Market value
Shareholders are further advised that Tradehold has declared a dividend to the value of
R604 389 676, which will be settled through the Distribution of 247 174 375 Mettle Investments
Shares.
The market value of a Mettle Investments Share for the purpose of the Base Cost is 245 cents per
Mettle Investment Share, based on the closing share price per Mettle Investments Share on
Wednesday, 23 May 2018.
Apportionment
As stated above, the Distribution will not qualify as an “unbundling transaction” as envisaged in
section 46 of the Income Tax Act and accordingly there is no apportionment of the expenditure
incurred by Tradehold shareholders in respect of their Tradehold shares.
Tradehold Shareholders are therefore advised that the expenditure incurred in respect of their
Tradehold shares remains unchanged, and that the deemed expenditure in respect of the Mettle
Investment Shares will be equal to the market value of the Mettle Investment Shares, as indicated
above, provided that the Mettle Investments Shares will be acquired and held by the Tradehold
Shareholders as a long term investment on capital account and not with the intention to hold or
dispose thereof as part of a scheme of profit making and/or as trading stock.
Cape Town
24 May 2018
JSE Designated Advisor to Mettle Investments
Questco Corporate Advisory Proprietary Limited
JSE Sponsor to Tradehold
Mettle Corporate Finance Proprietary Limited
Joint financial advisors
Rand Merchant Bank, a division of FirstRand Bank Limited
Mettle Corporate Finance Proprietary Limited
Transaction legal advisors
Cliffe Dekker Hofmeyr Inc.
Joint independent reporting accountants
PricewaterhouseCoopers Inc.
Joint independent reporting accountants
BDO Cape Incorporated
Date: 24/05/2018 10:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
