Equites Property Fund Limited has declared significant financial developments regarding its dividend reinvestment alternative. This comprehensive update aims to provide shareholders with detailed insights into the dividend reinvestment plan, tax implications, and important dates. Understanding these elements can help investors make informed decisions.
Dividend Declaration and Reinvestment Price
Equites Property Fund Limited, listed on the JSE, has announced a cash dividend of 65.75300 cents per share. Shareholders have the option to reinvest this cash dividend for new Equites shares at a reinvestment price of 1,200 cents per share (R12.00 per share). This price reflects a 1.34% discount to the spot price as of 24 May 2024.
The reinvestment price and the corresponding share ratio are critical for shareholders to evaluate the benefits of reinvestment. For South African resident shareholders exempt from dividend tax, the share ratio is 5.47942 shares for every 100 shares held. For non-resident shareholders subject to a 20% dividend tax, the share ratio is 4.38353 shares for every 100 shares held.
Important Dates and Procedures
Key dates are crucial for shareholders opting for the dividend reinvestment alternative. The record date for determining eligible shareholders is Friday, 7 June 2024. Shareholders must elect the reinvestment alternative by 12:00 PM (South African time) on the same day. The shares will trade ex-dividend from Wednesday, 5 June 2024.
Important Dates Table:
| Event | Date |
|---|---|
| Last Date to Trade | Tuesday, 4 June 2024 |
| Ex-Dividend Date | Wednesday, 5 June 2024 |
| Record Date | Friday, 7 June 2024 |
| Election Deadline for Reinvestment | Friday, 7 June 2024, 12:00 PM |
| New Shares Listing Date | Friday, 7 June 2024 |
| Settlement Date | Wednesday, 12 June 2024 |
Rounding and Fractional Shares
When calculating the number of new shares, fractional shares may arise. These fractional shares will be rounded down to the nearest whole number. The remaining cash balance will be retained by the shareholder. This ensures a straightforward and fair allocation of shares without dealing with fractional entitlements.
Dividend Withholding Tax Implications
For South African Resident Shareholders:
Dividends received from a Real Estate Investment Trust (REIT) like Equites are generally exempt from dividend tax. This exemption applies provided that shareholders submit the requisite declaration as to their residence status. Therefore, South African residents who are exempt from dividend tax will receive a net dividend of 65.75300 cents per share.
For Non-Resident Shareholders:
Non-resident shareholders are subject to a 20% dividend withholding tax. This tax can be reduced if there is an applicable Double Taxation Agreement (DTA) between South Africa and the shareholder’s country of residence. Assuming the 20% tax rate, non-residents will receive a net dividend of 52.60240 cents per share.
Conclusion
Equites Property Fund Limited’s announcement provides a clear and detailed framework for shareholders. By understanding the dividend reinvestment alternative, tax implications, and important dates, shareholders can make well-informed decisions. Consulting with professional advisors is recommended to align these decisions with individual financial strategies. The flexibility to reinvest dividends at a discount can be a valuable tool for enhancing long-term investment returns. Equites’ commitment to transparency and shareholder value is evident in this comprehensive update.