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LIBERTY TWO DEGREES - Finalisation announcement

Release Date: 19/10/2018 13:47
Code(s): L2D     PDF:  
Wrap Text
Finalisation announcement

LIBERTY TWO DEGREES
JSE share code: L2D
ISIN: ZAE000230553
(Approved as a REIT by the JSE)
(“CISIP”)

a portfolio established under the Liberty Two Degrees Scheme, a collective investment scheme in
property established in terms of the Collective Investment Schemes Control Act, No 45 of 2002, as
amended (CISCA), and managed by STANLIB REIT Fund Managers (RF) Proprietary Limited
(Registration number: 2007/029492/07)
(the “Manager”)

LIBERTY TWO DEGREES LIMITED
(Registration number: 2018/388906/06)
JSE share code: L2D
ISIN: ZAE000260576
(“New L2D”)


                                FINALISATION ANNOUNCEMENT


Unitholders are referred to the Circular posted to Unitholders on Monday, 30 July 2018, as
supplemented by the Supplementary Information published on SENS on Monday, 6 August 2018 in
relation to the Proposed Transactions including the Conversion of the CISIP to a Corporate REIT in
the form of New L2D, and the announcement made by the CISIP on Friday, 21 September 2018 in
which a revised schedule of important dates and times was published.
Unitholders are hereby advised that all conditions precedent to the Proposed Transactions have
successfully been fulfilled or waived and accordingly the Proposed Transactions are now
unconditional.

Furthermore, in accordance with the terms of the Proposed Transactions, the Board of the Manager
is pleased to announce that it has approved the Final CISIP Distribution of 18.0 cents per Unit for
the period from 1 July to the Effective Date.

Further detail in relation to the Finalisation Information concerning the Proposed Transactions and
the Final CISIP Distribution is set out below.
The Board of the Manager wishes to thank Unitholders for their support for the Proposed
Transactions.

Tax position of Unitholders
In terms of the Conversion, each Unitholder will receive one ordinary share in New L2D (“New L2D
Share”) for every existing participatory interest in the CISIP (“Unit”) held and New L2D will be listed
in place of the CISIP, which will be de-listed and voluntarily wound up. The New L2D Shares will be
issued to Unitholders on 1 November 2018.
Distributions made by New L2D will be deemed to be a dividend, for South African tax purposes, in
terms of section 25BB of the Income Tax Act and must be included in the gross income of such
South African tax resident New L2D shareholders. Such distributions will not be exempt from income
tax (in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of
section 10(1)(k)(i) of the Income Tax Act) because it is distributed by a REIT. Distributions made by
New L2D received by non-resident New L2D shareholders will not be taxable as income and instead
will be treated as ordinary dividends which are exempt from income tax in terms of the general
dividend exemption in section 10(1)(k)(i) of the Income Tax Act but may be subject to dividends
withholding tax.
It is a requirement that the CISIP must have taken such steps as necessary within a period of 36
months after the Effective Date to liquidate, wind up or deregister. The Manager intends taking all
such necessary steps for the winding up of the CISIP within that timeframe.
This summary is only intended to be a brief and general guide dealing with the main fiscal
consequences of the implementation of the Proposed Transactions for Unitholders. It is not intended
to provide specific advice and no action should be taken or omitted to be taken in reliance upon it.
Unitholders are advised to seek professional tax advice in respect of the Proposed Transactions,
including the substitution of their Units for New L2D Shares.
Disposal of the CISIP Units
Unitholders who dispose of their Units prior to the issue to them of the New L2D Shares pursuant to
the Proposed Transactions, will be deemed to have disposed of the rights to be issued such New
L2D Shares together with such disposal. Thereafter, any Unitholder who disposes of the New L2D
Shares issued to such Unitholder pursuant to the Proposed Transactions will be deemed to have
disposed of the Units together with any rights thereto, including any rights to any distributions when
disposing of those New L2D Shares.
Pre-emptive rights
As part of obtaining the necessary consents for the conversion of L2D to a corporate REIT and as a
result of the termination of the Put Option, it has been agreed that Pareto and New L2D will both
have pro rata pre-emptive rights in relation to further sales of shares in the Sandton City Complex by
Liberty for so long as New L2D remains a subsidiary of Liberty. Should New L2D cease to be a
subsidiary of Liberty, Pareto will be restored to the position it had prior to 2016 in that Pareto will
have a first ranking pre-emptive right and thereafter New L2D will have a second ranking pre-emptive
right over any further sales of undivided shares by Liberty. L2D and Liberty will continue to have pro
rata pre-emptive rights in relation to any sale of undivided shares by Pareto.


Final CISIP Distribution
The Board of the Manager has approved, and notice is hereby given of, a distribution of 18.0 cents
per Unit for the period from 1 July 2018 to the Effective Date being the Final CISIP Distribution.
The Final CISIP Distribution is payable to the Unitholders in accordance with the timetable set out
below:


                                                                                                       2018
 Last day to trade to be recorded in the CISIP register in order to be                  Friday, 26 October
 eligible to receive the Final CISIP Distribution
 Ex-dividend date in respect of the Final CISIP Distribution                           Monday, 29 October
 Record date in order to be eligible to receive the Final CISIP                   Wednesday, 31 October
 Distribution
 Payment of Final CISIP Distribution                                                        Wednesday, 14
                                                                                               November


Payment of the Final CISIP Distribution will be made to Unitholders on Wednesday, 14 November
2018. In respect of dematerialised Units, the Final CISIP Distribution will be transferred to the Central
Securities Depository Participant (“CSDP”) accounts/broker accounts on Wednesday, 14 November
2018. Certificated Unitholders’ dividend payments will be posted on or about Wednesday, 14
November 2018.

              Units in issue at the date of declaration of the Final CISIP Distribution: 908 443 335

              CISIP’s income tax reference number: 9087144235

In accordance with the CISIP’s status as a REIT, Unitholders are advised that the Final CISIP
Distribution meets the requirements of a “qualifying distribution” for the purposes of section 25BB of
the Income Tax Act, No. 58 of 1962 (“Income Tax Act”). The Final CISIP Distribution on the Units
will be deemed to be a dividend, for South African tax purposes, in terms of section 25BB of the
Income Tax Act.

The Final CISIP Distribution received by or accrued to South African tax residents must be included
in the gross income of such Unitholders and will not be exempt from income tax (in terms of the
exclusion to the general dividend exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the
Income Tax Act) because it is distributed by a REIT. This Final CISIP Distribution is, however, exempt
from dividend withholding tax in the hands of South African tax resident Unitholders, provided that
the South African resident Unitholders provide the following forms to their CSDP or broker, as the
case may be, in respect of uncertificated Units, or the company, in respect of certificated Units:

a)    a declaration that the Final CISIP Distribution is exempt from dividends tax; and
b)    a written undertaking to inform the CSDP, broker or the company, as the case may be, should
      the circumstances affecting the exemption change or the beneficial owner cease to be the
      beneficial owner, both in the form prescribed by the Commissioner for the South African
      Revenue Service. Unitholders are advised to contact their CSDP, broker or the company, as
      the case may be, to arrange for the abovementioned documents to be submitted prior to
      payment of the Final CISIP Distribution, if such documents have not already been submitted.

Distributions received by non-resident Unitholders will not be taxable as income and instead will be
treated as an ordinary dividend which is exempt from income tax in terms of the general dividend
exemption in section 10(1)(k)(i) of the Income Tax Act.

Assuming dividend withholding tax will be withheld at a rate of 20%, unless the rate is reduced in
terms of any applicable agreement for the avoidance of double taxation (“DTA”) between South
Africa and the country of residence of the Unitholder, the net dividend amount due to non-resident
Unitholders is 14.4 cents per Unit. A reduced dividend withholding rate in terms of the applicable
DTA may only be relied on if the non-resident Unitholder has provided the following forms to their
CSDP or broker, as the case may be, in respect of uncertificated Units, or the company, in respect
of certificated Units:

a)    a declaration that the Final CISIP Distribution is subject to a reduced rate as a result of the
      application of a DTA; and
b)    a written undertaking to inform their CSDP, broker or the company, as the case may be, should
      the circumstances affecting the reduced rate change or the beneficial owner cease to be the
      beneficial owner, both in the form prescribed by the Commissioner for the South African
      Revenue Service. Non-resident Unitholders are advised to contact their CSDP, broker or the
      company, as the case may be, to arrange for the abovementioned documents to be submitted
      prior to payment of the Final CISIP Distribution if such documents have not already been
      submitted, if applicable.
  Important dates and times of the Proposed Transactions
  The important dates and times for the implementation of the Proposed Transactions remain as
  previously announced on 21 September 2018 and are set out below:

                                                                                                                     2018
Last day to trade to be recorded in the CISIP register in order to be                               Friday, 26 October
eligible to receive the Final CISIP Distribution
Last day to trade to be recorded in the CISIP register in order to be                               Friday, 26 October
eligible to receive New L2D Shares on the Effective Date
Ex-dividend date in respect of the Final CISIP Distribution                                      Monday, 29 October
Units suspended from trading                                                                     Monday, 29 October
Commencement of trading in New L2D Share Entitlements                                            Monday, 29 October
Record date in order to be eligible to receive the Final CISIP                              Wednesday, 31 October
Distribution and to be eligible to receive New L2D shares
Effective Date                                                                                Thursday, 1 November
Trading in New L2D Shares with the JSE share code: L2D and ISIN:                              Thursday, 1 November
ZAE000260576 commences
New L2D shares issued to Unitholders pursuant to the Proposed                                 Thursday, 1 November
Transactions
Accounts at CSDP or broker updated in respect of dematerialised                               Thursday, 1 November
Shareholders
Delisting of Units from the JSE                                                                   Friday, 2 November
Payment of Final CISIP Distribution                                                      Wednesday, 14 November

       Notes:
       1.   All references to dates and times are to local dates and times in South Africa. These dates and times are
            subject to amendment. Any such amendment will be released on SENS and in the press.
       2.   Unit certificates may not be dematerialised or rematerialised after Friday, 26 October 2018, in the CISIP.



  Capitalised terms used in this announcement bear the same meaning as the capitalised and defined
  terms used in the Circular.


  Johannesburg
  19 October 2018

  Financial Advisor and Transaction Sponsor
  The Standard Bank of South Africa Limited

  Independent Sponsor
  Questco Corporate Advisory Proprietary Limited

  Investor Relations
  Gareth Rees
  Contact number: 011 448 6804

Date: 19/10/2018 01:47:00 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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