TSOGO SUN HOLDINGS LIMITED - Apportionment Of Expenditure And Market Value In Respect Of The Unbundling Of THL

Apportionment Of Expenditure And Market Value In Respect Of The Unbundling Of THL

TSOGO SUN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1989/002108/06)
JSE Share Code: TSH
ISIN: ZAE000156238
(“Tsogo Sun”)

ANNOUNCEMENT IN RESPECT OF THE APPORTIONMENT OF EXPENDITURE AND MARKET
VALUE IN RESPECT OF THE UNBUNDLING OF TSOGO SUN HOTELS LIMITED (“THL”)

1. Introduction

    Shareholders of Tsogo Sun (“Shareholders”) are referred to the announcements relating to the
    unbundling of THL, released on the Stock Exchange News Service (“SENS”) of the JSE Limited
    (“JSE”) on 23 May 2019 (“the Unbundling”) and the listing of THL on the main board of the JSE on
    12 June 2019 (“the Listing”).

    Tsogo Sun will distribute one THL ordinary share for every one Tsogo Sun ordinary share held at
    17:00 on 14 June 2019, being the “Unbundling Record Date”, with the last day to trade in Tsogo
    Sun shares in order to participate in the unbundling being 11 June 2019 ("LDT Date").

    Shareholders are hereby advised that the Unbundling will be implemented in terms of section 46 of
    the Companies Act No 71 of 2008 and section 46 of the Income Tax Act No 58 of 1962 (“Income
    Tax Act”).

    The purpose of this announcement is to notify Shareholders of the apportionment ratio to be applied
    in determining the portion of their existing expenditure and/or market value (if relevant) in their
    Tsogo Sun ordinary shares to be allocated to the unbundled THL ordinary shares whilst the balance
    of their existing expenditure and/or market value (if relevant) will remain attributable to the retained
    Tsogo Sun ordinary shares.

2. Apportionment tax principles

    Shareholders are required to allocate their expenditure and/or market value (if relevant) in their
    Tsogo Sun ordinary shares held immediately before the Unbundling between the THL ordinary
    shares received pursuant to the Unbundling and the Tsogo Sun ordinary shares held after the
    Unbundling.

    Tsogo Sun ordinary shares held as trading stock: Any Shareholders holding Tsogo Sun ordinary
    shares as trading stock will be deemed to acquire the unbundled THL ordinary shares as trading
    stock. The combined expenditure of such Tsogo Sun and THL ordinary shares will be the amount
    taken into account by the Shareholders in respect of those Tsogo Sun ordinary shares, as
    contemplated in section 11(a), section 22(1), or section 22(2) of the Income Tax Act.
    The combined expenditure incurred in respect of the Tsogo Sun ordinary shares will be apportioned
    between the THL ordinary shares and the Tsogo Sun ordinary shares by applying the ratio that the
    market value of THL ordinary shares bears to the sum of the market value of the THL ordinary
    shares and the Tsogo Sun ordinary shares at the end of the business day after the LDT Date, being
    determined with reference to Tsogo Sun and THL closing share prices on the first business day
    after the LDT Date. This ratio must be used in the determination of any profits or losses derived on
    any future disposals of the unbundled THL ordinary shares or Tsogo Sun ordinary shares.

    The expenditure so allocated to the THL ordinary shares will reduce the expenditure of the Tsogo
    Sun ordinary shares held, thus allocating the expenditure between the Tsogo Sun ordinary shares
    and the THL ordinary shares.

   Tsogo Sun ordinary shares held as capital assets: Any Shareholders holding Tsogo Sun ordinary
   shares as capital assets will be deemed to acquire the unbundled THL ordinary shares as capital
   assets. The combined expenditure of such Tsogo Sun and THL ordinary shares will be the original
   expenditure incurred in respect of the Tsogo Sun ordinary shares, in terms of paragraph 20 of the
   Eighth Schedule to the Income Tax Act, and where the Tsogo Sun ordinary shares were acquired
   before 1 October 2001, the expenditure and/or market value, as the case may be, adopted or
   determined as contemplated in paragraph 29 of the Eighth Schedule to the Income Tax Act. The
   combined expenditure incurred in respect of the Tsogo Sun ordinary shares will be apportioned
   between the THL ordinary shares and the Tsogo Sun ordinary shares by applying the ratio that the
   market value of THL ordinary shares bears to the sum of the market value of the THL ordinary
   shares and the Tsogo Sun ordinary shares at the end of the business day after the LDT Date, being
   determined with reference to Tsogo Sun and THL closing share prices on the first business day
   after the LDT Date. This ratio must be used in the determination of the capital gain or loss derived
   on any future disposals of the unbundled THL ordinary shares or Tsogo Sun ordinary shares.

   The expenditure and/or market value (if relevant) so allocated to the THL ordinary shares will reduce
   the expenditure and/or market value (if relevant) of the Tsogo Sun ordinary shares held, thus
   allocating the expenditure between the Tsogo Sun ordinary shares and the THL ordinary shares.

   Shareholders will be deemed to have acquired the unbundled THL ordinary shares on the date on
   which the Tsogo Sun ordinary shares were originally acquired.

   Shareholders are advised to consult their own professional tax advisors should they have any
   queries regarding the taxation consequences of the Unbundling and the calculation of their costs
   for taxation purposes.


3. Apportionment ratio

   Shareholders are hereby advised that the expenditure and market value, as the case may be, of
   their Tsogo Sun ordinary shares as referred to above must be apportioned in the ratio of 80.49732%
   to a Tsogo Sun ordinary share held after the Unbundling and 19.50268% to an unbundled THL
   ordinary share (the “Apportionment Ratio”).

   The Apportionment Ratio is based on the closing price of R16.51 per Tsogo Sun ordinary share
   and R4.00 per THL ordinary share on 12 June 2019.

   This announcement is not intended to be a complete analysis of the tax implications of the
   Unbundling. It is not intended to be, nor should it be considered to be, legal or tax advice.
   Shareholders are advised to consult their own professional tax advisers on the taxation
   consequences of the unbundling in both South Africa and their jurisdiction of residence and the
   calculation of their costs for tax purposes.



Johannesburg
13 June 2019


Corporate advisor and transaction sponsor
The Standard Bank of South Africa Limited

Corporate law advisors
Taback and Associates Proprietary Limited
DISCLAIMER

Nothing in this announcement constitutes (or forms part of) any offer for the sale of, or solicitation of
any offer to purchase or subscribe for, any securities of Tsogo Sun or THL in any jurisdiction.

The release, publication or distribution of this announcement in certain jurisdictions may be restricted
by law and therefore persons in any such jurisdictions into which this announcement is released,
published or distributed should inform themselves about and observe such restrictions. Failure to
comply with the applicable restrictions may constitute a violation of the securities laws of any such
jurisdiction.

Date: 13/06/2019 11:19:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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