Scrip dividend finalisation
10/01/2023 08:00
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RNS Number : 1308M Industrials REIT Limited 10 January 2023
INDUSTRIALS REIT LIMITED
(Registered in Guernsey with registration number 64865)
LSE share code: MLI JSE share code: MLI
ISIN: GG00BFWMR296
("Industrials REIT" or the "Company")
10 January 2023
FINALISATION ANNOUNCEMENT IN RESPECT OF AN ELECTION TO RECEIVE EITHER A CASH
DIVIDEND OR A SCRIP DIVIDEND
Industrials REIT shareholders are referred to the circular (the "circular")
and the announcement issued on Thursday, 15 December 2022 in respect of an
election to receive the interim dividend of 3.50 pence per share (the
"dividend") for the six months ended 30 September 2022, either as a cash
dividend (the "cash dividend") or as a scrip dividend (the "scrip dividend").
Shareholders are now advised that the dividend will be paid entirely as a
property income distribution ("PID"). The PID will be subject to a deduction
of a 20% United Kingdom ("UK") withholding tax unless exemptions apply.
(i) Shareholders receiving the dividend in cash:
South African ("SA") shareholders are advised that the exchange rate for the
dividend will be 20.70000 ZAR to 1.00 GBP (the "exchange rate"), as obtained
by the Company on Monday, 9 January 2023, resulting in a gross local dividend
amount of 72.45000 ZAR cents per share. Accordingly, shareholders who do not
elect to receive new ordinary shares pursuant to the scrip dividend will be
paid a cash dividend per share as follows:
PID UK Shareholders SA Shareholders
(GBP pence) (ZAR cents)
Gross amount of PID 3.50000 72.45000
Less 20% UK withholding tax* 0.70000 14.49000
Net PID dividend payable** 2.80000 57.96000
Less effective 5% SA dividends tax for SA Shareholders*** n/a 3.62250
Net PID dividend payable*** n/a 54.33750
* Certain categories of UK shareholders may apply for exemption, in which case
the PID element will be paid gross of UK withholding tax.
** Net position after deducting UK withholding tax for both UK and SA
Shareholders, but before SA shareholders have claimed back 5% from HMRC under
the double tax agreement between the United Kingdom and South Africa in
respect of the UK withholding tax.
*** SA dividends tax applies to SA Shareholders who do not qualify for an
exemption from SA dividends tax (SA tax resident companies and certain exempt
institutions are, amongst others, exempt from SA dividends tax) at the rate of
20%, reduced by the UK withholding taxes suffered, which cannot be recovered
from the UK (which is effectively 15%, after taking into account the 5% refund
which may be obtained from the UK).
(ii) Shareholders who elect to take shares:
The scrip dividend reference price for UK shareholders is 125.80000 pence
("scrip dividend reference price"), being the average closing price of
Industrials REIT shares traded on the London Stock Exchange ("LSE") over a
period of five days as at Friday, 6 January 2023, less the dividend. The scrip
dividend reference price for SA shareholders is 26.04060 ZAR, being the scrip
dividend reference price for UK shareholders, converted to Rand at the
exchange rate.
The number of new ordinary shares to be allocated to shareholders electing to
participate in the scrip dividend will be calculated by dividing the net value
of the dividend otherwise receivable by a shareholder by the scrip dividend
reference price and rounding down to the nearest whole number. As no fraction
of a new share will be issued, any entitlement which results in a fractional
share will be rounded down to the nearest whole number, with a cash payment to
be made to the relevant shareholder in respect of the fraction ("cash
payment").
In the case of shareholders on the SA register, such fractions of shares will
be sold in the market on behalf of the shareholders entitled to the fractions
of shares and the cash payment in respect of the fractions will be paid to
those shareholders. The cash payment is calculated by multiplying the
fractional entitlement by the scrip dividend reference price. Shareholders are
only entitled to the proceeds for their fractional entitlements, which are
sold on their behalf, equal to the amount of the cash payment.
The cash payment will be made on the payment date, being Friday, 10 February
2023.
By way of illustration, a shareholder who holds 1,000 shares, and who elects
to receive new ordinary shares pursuant to the scrip dividend, will receive a
number of new ordinary shares calculated as follows:
In respect of the PID UK Shareholders SA Shareholders
PID dividend net of UK withholding tax entitled to receive* £28.00000 579.60000 ZAR
(As per (i) above x 1,000):
Scrip dividend reference price £1.25800 26.04060 ZAR
Calculated number of new shares to which shareholder is entitled 22.25755 22.25755
Actual number of new shares received 22 22
Gross Cash Balance (multiply fractional entitlement by scrip dividend £0.32400 6.70676 ZAR
reference price)
* A scrip dividend is not subject to SA dividends tax, therefore no SA
dividends tax is deducted for SA Shareholders in this instance, only UK
withholding tax. SA shareholders may claim back 5% from HMRC under the double
tax agreement between the United Kingdom and South Africa in respect of the UK
withholding tax
TIMETABLE
The salient dates and times announced on Thursday, 15 December 2022 remain
unchanged.
TAX IMPLICATIONS
The receipt of the cash dividend or electing to receive the scrip dividend may
have tax implications for shareholders.
With regards to shareholders on the SA register, the scrip dividend (including
the cash payment relating to fractions of shares) does not constitute a
"foreign dividend" as defined in section 1(1) of the South African Income Tax
Act 58 of 1962 ("ITA") and accordingly does not give rise to any dividends
tax. However, the shares issued in terms of the scrip dividend are deemed to
be acquired at a base cost or tax cost of nil in terms of section 40C of the
ITA. As the cash payment relating to fractions of shares arises pursuant to
the disposal of shares on behalf of shareholders, such cash payment must be
disclosed by South African shareholders in their tax returns as proceeds for
capital gains tax purposes, or gross income, (depending on whether the
shareholder holds his/her shares on income or capital account) in relation to
the disposal of shares which have no base cost or tax cost.
Shareholders are also referred to the general summary of certain limited
aspects of the taxation treatment of distributions paid by the Company for SA
resident shareholders and UK resident shareholders included in section 6 of
the circular. Shareholders are advised to obtain appropriate advice from their
professional advisors regarding the tax consequences of the cash dividend,
scrip dividend and cash payment.
For further information:
Industrials REIT Limited +44(0)20 3918 6600
Paul Arenson (paul.arenson@industrials.co.uk)
Julian Carey (julian.carey@industrials.co.uk)
James Beaumont (james.beaumont@industrials.co.uk)
Numis Securities Limited (Financial Adviser) +44(0)20 7260 1000
Hugh Jonathan
Vicki Paine
FTI Consulting (PR Adviser) +44(0)20 3727 1000
Richard Sunderland
Richard Gotla
Neel Bose
industrialsreit@fticonsulting.com (mailto:industrialsreit@fticonsulting.com)
Java Capital +27 (0)11 722 3050
(JSE Sponsor)
About Industrials REIT:
Industrials REIT is a UK REIT with a primary listing on the London Stock
Exchange and a secondary listing on the Johannesburg Stock Exchange. The
objective of the Company is to deliver a combination of sustainable growing
income and growth in value to its investors. Industrials REIT focuses on
owning and operating a diversified portfolio of UK purpose built multi-let
industrial (MLI) estates across the UK. The Company aspires to be the leading
MLI business in the UK. For further information, go to
www.industrialsreit.com.
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