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TAL TIW
TAL TIW
TIW/Tiwheel - TAL/Tiauto - Unbundling of Tiwheel`s Shareholding in Tiauto -
Apportionment Ratio For Tax Purposes
TIGER WHEELS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1970/011662/06)
Share code: TIW & ISIN: ZAE000007407
("Tiwheel")
TIGER AUTOMOTIVE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/042651/06)
Share code: TAL & ISIN: ZAE000007407
("Tiauto")
UNBUNDLING OF TIWHEEL`S SHAREHOLDING IN TIAUTO - APPORTIONMENT RATIO FOR
TAX PURPOSES
1. INTRODUCTION
The circular to Tiwheel ordinary shareholders ("Tiwheel shareholders")
dated 6 November 2006 ("the circular") provided shareholders with
information about the unbundling of Tiwheel`s entire holding of
ordinary shares ("the Tiauto distribution shares) in Tiauto to Tiwheel
shareholders registered in Tiwheel`s register of shareholders on
Friday, 15 December 2006 and the separate listing of Tiauto on the JSE
Limited ("the JSE")("the unbundling"). The purpose of this
announcement is to notify Tiwheel shareholders of the ratio to be used
in the apportionment for tax purposes of the original cost or base
cost of a Tiwheel ordinary share ("the Tiwheel share") between the
Tiwheel share after the unbundling and the Tiauto distribution share
received in terms of the unbundling. A summary of the South African
tax considerations was set out in the circular.
2. APPORTIONMENT RATIO
The ratio of the respective market values of the Tiwheel shares and
Tiauto distribution shares on the JSE as at 17:00 on Tuesday,
11 December 2006, being the day after the date of listing of Tiauto,
is 53% relating to the Tiwheel shares and 47% relating to the Tiauto
distribution shares ("the apportionment ratio"). The apportionment
ratio is to be used to apportion the cost between the Tiwheel shares
and the Tiauto distribution shares for the determination of profits
and losses (of a capital and trading nature) derived on any future
disposals of the Tiwheel shares and the Tiauto distribution shares.
3. TIWHEEL SHARES HELD AS TRADING STOCK
Tiwheel shareholders holding their Tiwheel shares as trading stock
will be deemed to have acquired both their Tiwheel shares and Tiauto
distribution shares at an amount equal to the original cost of the
Tiwheel shares, as contemplated in section 11(a), section 22(1) or
section 22(2) of the Income Tax Act. This cost must be apportioned
between the Tiwheel shares and the Tiauto distribution shares on a pro
rata basis using the apportionment ratio.
4. TIWHEEL SHARES HELD AS CAPITAL ASSETS
Tiwheel shareholders holding their Tiwheel shares as capital assets
will be deemed to have acquired their Tiwheel shares and Tiauto
distribution shares for a cost equal to the base cost of the Tiwheel
shares as contemplated in the paragraph 20 of the Eighth Schedule to
the Income Tax Act.
The base cost can be calculated in a number of ways:
* for Tiwheel shares acquired before 1 October 2001, the base cost
will either be the market value of the shares at that date, being
R11.00, or a cost determined on the time-apportionment basis plus
any expenditure actually incurred on or after 1 October 2001;
* for Tiwheel shares acquired after 1 October 2001, the base cost
will be the expenditure actually incurred in respect of the
acquisition of such shares; and
* a further method of determining the value for tax purposes
("valuation date value") is the 20% of proceeds method. In terms
of the unbundling, Tiwheel shareholders would be deemed to have
acquired their Tiwheel shares and Tiauto distribution shares on
the same day. If a Tiwheel shareholder disposes of either the
Tiwheel shares or Tiauto distribution shares such Tiwheel
shareholder could elect to utilise 20% of the proceeds from such
disposal as the valuation date value of the respective shares.The
base cost must be apportioned between the Tiwheel shares and
Tiauto distribution shares on a pro rata basis determined using
the apportionment ratio. If Tiwheel shareholders have elected to
determine the valuation date value as the market value of the
Tiwheel shares at 1 October 2001, the pro rata apportionment of
such market value will be R5.83 per Tiwheel share and R5.17 per
Tiauto distribution share.
Tiwheel shareholders will be deemed to have acquired the Tiauto
distribution shares on the date on which the Tiwheel shares were
originally acquired and to have incurred the expenditure on that date.
Midrand
19 December 2006
SPONSOR AND CORPORATE ADVISOR
SASFIN CAPITAL
A division of Sasfin Bank Limited
LEGAL ADVISOR
FLUXMANS Incorporated
AUDITORS AND REPORTING ACCOUNTANTS
PKF(JHB)Incorporated
Date: 19/12/2006 15:40:15 Produced by the JSE SENS Department.
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