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JSE ABSP
ABSP
ABSP - Absa Bank - ABSA Bank Limited - Changes to Secondary Tax on Companies and
Taxation of Dividends and Their Effect on Absa Bank
Preference Shares - Follow-Up Announcement
Absa Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1986/004794/06)
ISIN: ZAE000079810
JSE share code: ABSP
(Absa Bank)
ABSA BANK LIMITED - CHANGES TO SECONDARY TAX ON COMPANIES AND TAXATION OF
DIVIDENDS AND THEIR EFFECT ON ABSA BANK PREFERENCE SHARES - FOLLOW-UP
ANNOUNCEMENT
Shareholders are referred to the Sens announcement of 27 February 2007 dealing
with the proposed changes in secondary tax on companies (STC) and the
introduction of taxation of dividends (the tax changes) and their potential
impact on Absa Bank`s non-cumulative non-redeemable preference shares (the ABSP
preference shares).
The board of Absa Bank Limited has agreed that dividends payable in respect of
the ABSP preference shares be adjusted (grossed-up) once the amendments
envisaged in phase 2 of the tax changes come into effect. In Phase 2, which
(subject to negotiating of international treaties) is envisaged to commence in
2008:
STC will be replaced with a dividend tax on shareholders.
This dividend tax will be enforced administratively as a withholding tax.
The gross up will be equal to the lower of (i) the benefit that Absa Bank will
receive as a result of the tax changes becoming effective; and (ii) an increase
in the ABSP preference share dividend yield that is sufficient to ensure that
ABSP preference shareholders receive the same after-tax dividend as they did
prior to phase 2 of the tax changes becoming effective.
The amendments to the terms of the ABSP preference shares in order to adjust the
dividend yield as stated above will require the passing of a resolution by the
ABSP preference shareholders at a separate class meeting approving the
amendments (the resolution to be passed in the same manner, mutatis mutandis, as
a special resolution).
Enquiries
Carel Gronum
General manager: Capital Management
Tel: (+2711) 350 8995
e-mail: carelg@absa.co.za
Issued by:
Jacques Badenhorst
Head: Investor Relations
Absa Group Limited
4th floor, Absa Towers East, 170 Main Street, Johannesburg
Tel: (+2711) 350-4061 Fax: (+2711) 350-6487
E-mail: jacques.badenhorst@absa.co.za
Lead sponsor:
Merrill Lynch South Africa (Proprietary) Limited
Co-sponsor:
Absa Capital, a division of Absa Bank Limited
Johannesburg
20 March 2007
Date: 20/03/2007 16:49:20 Produced by the JSE SENS Department.
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