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Apportionment Of Tax Cost In Respect Of The Unbundling
Curro Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/025801/06)
JSE Share Code: COH
ISIN: ZAE000156253
(“Curro” or “the Company”)
APPORTIONMENT OF TAX COST FOR SOUTH AFRICAN INCOME TAX PURPOSES IN
RESPECT OF THE UNBUNDLING OF CURRO’S INTERESTS IN STADIO HOLDINGS
LIMITED (“STADIO”)
1. Introduction
Shareholders are referred to the SENS announcement of
15 September 2017 (“the SENS announcement”), relating to the
unbundling by Curro of 410 561 153 ordinary shares in STADIO
(“STADIO Shares”) to Curro shareholders in the ratio of one STADIO
Share for every one Curro ordinary share (“Curro Shares”) held on
Thursday, 5 October 2017, the record date of the unbundling (“the
Unbundling”), comprising 91.7% of the total issued share capital
of STADIO (the remaining 8.3% of STADIO is held by the vendors of
the South African School of Motion Picture Medium and Live
Performance Proprietary Limited, acquired by STADIO prior to the
listing).
The Unbundling is a dividend in specie, in terms of
section 46(1)(a)(ii) of the Companies Act, No. 71 of 2008, as
amended and section 46 of the Income Tax Act, No. 58 of 1962, as
amended.
Shareholders are further advised the listing of all STADIO’s
issued shares on the main board of the JSE under the abbreviated
name “STADIO”, share code “SDO” and ISIN ZAE000248662 took place
with effect from the commencement of trade on Tuesday,
3 October 2017.
The purpose of this announcement is to notify Curro shareholders
of the apportionment ratio to be applied by shareholders in
determining the portion of their past costs (and market value, if
relevant) to be allocated to the unbundled STADIO Shares and the
retained Curro Shares.
2. Apportionment tax principles
The summary below represents general comments and is not intended
to constitute a complete analysis of the taxation consequences of
the Unbundling for shareholders in terms of South African taxation
law. It is not intended to be, nor should it be considered as
legal or tax advice. Neither Curro, its associates, its advisors,
its directors or employees can be held responsible for the tax
consequences of the Unbundling and therefore shareholders are
advised to consult their own tax advisors in this regard.
The Unbundling will be implemented in terms of section 46 of the
Income Tax Act the application of which should have the following
tax consequences for the Curro shareholders as set out below.
Dividends tax and securities transfer tax:
The distribution of the STADIO Shares to ordinary shareholders of
Curro in terms of the Unbundling must be disregarded in
determining any liability for dividends tax and will qualify for
an exemption from securities transfer tax.
Curro Shares held as trading stock:
Any Curro shareholder holding Curro Shares as trading stock will
be deemed to acquire the unbundled STADIO Shares as trading stock.
The combined expenditure of such Curro Shares and STADIO Shares
will be the amount taken into account by the shareholder in
respect of those Curro Shares, as contemplated in section 11(a),
section 22(1), or section 22(2) of the Income Tax Act.
The portion of the above combined expenditure to be allocated to
the unbundled STADIO Shares, will be determined by applying the
ratio that the market value of the STADIO Shares bears to the sum
of the market value of Curro and STADIO Shares at the end of the
day of Unbundling (i.e. distribution), being Friday,
6 October 2017, as set out below. The expenditure allocated to
the unbundled STADIO shares will reduce the expenditure of the
Curro Shares held.
Curro Shares held as capital assets:
Any Curro shareholder holding Curro Shares as capital assets will
be deemed to acquire the unbundled STADIO Shares as capital
assets. The combined expenditure of such Curro Shares and STADIO
Shares will be the original expenditure incurred in respect of
the Curro Shares, in terms of paragraph 20 of the Eighth Schedule
to the Income Tax Act, and where the Curro Shares were acquired
before 1 October 2001, the market value adopted or determined as
contemplated in paragraph 29 of the Eighth Schedule to the Income
Tax Act.
The portion of the above combined expenditure to be allocated to
the unbundled STADIO Shares will be determined by applying the
ratio that the market value of STADIO Shares bears to the sum of
the market value of Curro Shares and STADIO shares at the end of
the day of Unbundling (i.e. distribution), being Friday, 6 October
2017, as set out below. The expenditure and market value allocated
to the unbundled STADIO shares will reduce the expenditure and
market value of the Curro Shares held.
Curro shareholders will be deemed to have acquired the unbundled
STADIO Shares on the date on which the Curro Shares were
originally acquired.
Non-resident Curro shareholders:
Curro shareholders who are non-resident for tax purposes in South
Africa are advised to consult their own professional tax advisors
regarding the tax treatment of the Unbundling in their respective
jurisdictions, having regards to the laws in their jurisdiction
and any applicable tax treaties between South Africa and their
country of residence.
3. Apportionment Ratio
Shareholders are hereby advised that the expenditure and market
value of their Curro Shares as referred to above must be
apportioned in the ratio of 85.34279% to a Curro Share held after
the Unbundling and 14.65721% to an unbundled STADIO Share
(“Apportionment Ratio”). The Apportionment Ratio is based on the
closing price of R36.10 per Curro Share and R6.20 per STADIO Share
on, Friday, 6 October 2017, the day of the Unbundling (i.e.
distribution).
Durbanville
9 October 2017
Transaction Advisor and Sponsor to Curro and STADIO:
PSG Capital Proprietary Limited
Date: 09/10/2017 08:00:00 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.
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