REG - Investec PLC - Update on Ninety One Distribution

InvestecAnnouncement

21/04/2022 15:00

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RNS Number : 9451I  Investec PLC  21 April 2022

 INVESTEC PLC                              INVESTEC LIMITED

 (Incorporated in the England and Wales)   (Incorporated in the Republic of South Africa)

 (Registration number 3633621)             (Registration number 1925/003833/06)

 LSE share code: INVP                      JSE share code: INL

 JSE share code: INP                       NSX Share code: IVD

 ISIN: GB00B17BBQ50                        BSE share code: INVESTEC

 LEI:2138007Z3U5GWDN3MY22                  ISIN : ZAE000081949

                                           LEI:213800CU7SM6O4UWOZ70

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION.

 

THIS ANNOUNCEMENT CONCERNS MATTERS WHICH MAY AFFECT THE LEGAL RIGHTS OF
INVESTEC SHAREHOLDERS. IF YOU ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS
ANNOUNCEMENT OR WHAT ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR
OWN INDEPENDENT FINANCIAL OR LEGAL ADVICE IMMEDIATELY FROM YOUR STOCKBROKER,
BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISER
DULY AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED)
IF YOU ARE RESIDENT IN THE UK OR, IF NOT, FROM ANOTHER APPROPRIATELY
AUTHORISED ADVISER.

 

 

UPDATE ON PROPOSED DISTRIBUTION OF NINETY ONE SHARES SUBSEQUENT TO PUBLICATION
OF INVESTEC SHAREHOLDER CIRCULAR

 

 

As part of the dual-listed company structure, Investec plc and Investec
Limited (together, "Investec") notify both the London Stock Exchange ("LSE")
and the Johannesburg Stock Exchange ("JSE") of matters which are required to
be disclosed under the Listing Rules of the Financial Conduct Authority and/or
JSE Listings Requirements.

 

Shareholders are referred to the announcement published on Friday, 18 March
2022, in terms of which it was announced that a circular ("Circular") was
distributed to Investec Shareholders on 18 March 2022 relating to the proposed
distribution (the "Distribution") of 15% of the shares in the Ninety One
dual-listed company structure ("DLC") comprising Ninety One plc and Ninety One
Limited (together, "Ninety One") to Investec ordinary shareholders (the
"Investec Ordinary Shareholders").

 

Capitalised terms used but not otherwise defined in this announcement have the
meanings set out in the Circular.

 

1.    APPLICATION OF SECTION 46 OF THE SOUTH AFRICAN INCOME TAX ACT

 

a.    As described in further detail in the Circular, Investec has sought a
ruling from the South African Revenue Service ("SARS") as to whether the
distribution in specie of the Ninety One Limited Shares by Investec Limited to
the Investec Limited Ordinary Shareholders and the Investec plc Ordinary
Shareholders on the Investec plc SA Register constitutes an "unbundling
transaction" as defined in section 46 of the South African Income Tax Act No.
58 of 1962 ("ITA").

 

b.    Shareholders are hereby advised that Investec has received a positive
ruling from SARS regarding the applicability of section 46 of the ITA. The
ruling confirms that, subject to certain regulatory and procedural conditions
(the "SARS Conditions") having been met, section 46 of the ITA will apply to
the distribution in specie of the Ninety One Limited Shares by Investec
Limited to the Investec Limited Ordinary Shareholders and the Investec plc
Ordinary Shareholders on the Investec plc SA Register, such that the
distribution in specie constitutes an "unbundling transaction".  Investec is
in the process of taking the steps required to fulfil the SARS Conditions, and
expects that the SARS Conditions will be fulfilled by the time of the
Distribution.  Shareholders will be updated in the event that there are any
changes to that position. For the avoidance of doubt the SARS Conditions apply
only in respect of the application of section 46 of the ITA; the conditions to
the Distribution, the Scheme and other parts of the Proposals remain as set
out in Paragraph 4 of Part IV of the Circular.

 

c.     Further information in relation to tax is contained in Part VII of
the Circular, which provides a general description of certain tax consequences
of the Proposals relevant to Investec Ordinary Shareholders who are resident
for tax purposes in the UK, the United States, South Africa, Namibia or
Botswana.  Furthermore, in respect of the South African tax consequences as
contained in Section B of Part VII of the Circular, Investec confirms that
based on the SARS ruling Scenario 1 as described therein is expected to apply
and the tax consequences described in that part of the Circular remain the
same, save that Investec plc Ordinary Shareholders on the Investec plc SA
Register, in accordance with section 46(3)(a) of the ITA, must (i) allocate a
portion of the expenditure and market value (as defined) attributable to the
Investec plc Ordinary Shares to the Ninety One Ltd shares acquired and (ii)
reduce the expenditure and market value attributable to the Investec plc
Ordinary Shares by the amount so allocated, as calculated in accordance with
sections 46(3)(a)(i) and (v).

 

Nothing in this announcement constitutes legal or tax advice. If an Investec
Ordinary Shareholder is in any doubt as to their tax position, they should
consult their own professional advisers immediately.

 

2.   TREATMENT OF NINETY ONE SHARES IN CONNECTION WITH INVESTEC EMPLOYEE
SHARE AWARDS

 

As set out in the Circular, Investec intends that awards under the Investec
employee share plans will, to reflect the Distribution, become awards over a
combination of Investec Shares and Ninety One Shares in the same ratio as
received by Investec Ordinary Shareholders.  Investec also stated its
intention for there to be no acceleration of awards as a result of the
Distribution, save that if any tax liabilities arose for Investec Share Plan
participants as a result of the Distribution Investec intended to consider
appropriate arrangements to enable participants to meet such liabilities.
Following publication of the Circular, Investec is continuing to consider the
treatment of the part of the awards that will relate to Ninety One Shares, and
whether to accelerate the receipt of some or all of the Ninety One Shares for
participants other than Investec Directors and staff deemed to be material
risk takers for regulatory purposes, including where applicable to allow
participants to meet any tax liabilities that arise.   In accordance with
the Circular and subject to any appropriate treatment applied in connection
with any tax liabilities which may arise, it remains the case that there will
be no acceleration of any awards held by Investec Directors or material risk
takers and, for all share plan participants, the original parts of the awards
over Investec Shares will continue on their existing terms unaffected by the
Distribution.

 

 

21 April 2022

 

Financial Advisor and Transaction Sponsor

Investec Bank Limited

 

Legal Advisors

ENSafrica and Linklaters LLP

 

Namibia Sponsor

Old Mutual Investment Services (Namibia) (Pty) Ltd

 

Botswana Sponsor

Motswedi Securities (Pty) Ltd

 

Enquiries:

Mr David Miller

Investec plc

Company Secretary

Tel: + 44 (0)20 7597 4000

 

FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements with respect to certain
of Investec plc's and Investec Limited's plans and expectations relating to
the Distribution. By their nature, all forward-looking statements involve risk
and uncertainty because they relate to future events and circumstances which
are beyond Investec plc's and Investec Limited's control. These
forward-looking statements speak only as of the date on which they are made.
Investec plc and Investec Limited expressly disclaim any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement or any other
forward-looking statements they may make.

 

IMPORTANT INFORMATION

The Ninety One shares to be distributed in connection with the Proposals have
not been, and will not be, registered under the US Securities Act or the
securities laws of any state or other jurisdiction of the United States and
may not be offered, sold, exercised, transferred or delivered, directly or
indirectly, in or into the United States at any time except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and applicable state and other
securities laws of the United States. The Ninety One plc Shares to be
distributed in connection with the Scheme will be distributed in reliance upon
the exemption from the registration requirements of the US Securities Act
provided by section 3(a)(10) thereunder.

 

For the purposes of qualifying for the exemption from the registration
requirements of the US Securities Act pursuant to section 3(a)(10) thereunder,
Investec will advise the Court through counsel that its sanctioning of the
Scheme will be relied upon by Investec as an approval of the Scheme following
a hearing on its fairness to Investec shareholders, at which hearing all
Investec plc Shareholders are entitled to attend in person or through counsel
to support or oppose the sanctioning of the Scheme and with respect to which
notification has been given to all Investec plc Shareholders.

 

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