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Unbundling of the Brait bonds, determination of tax base cost and cash payment in respect of fractional entitlements
EPE CAPITAL PARTNERS LTD
(INCORPORATED IN THE REPUBLIC OF MAURITIUS)
(REGISTRATION NUMBER: C138883 C1/GBL)
ISIN: MU0522S00005
SHARE CODE: EPE
("Ethos Capital" or the "Company")
UNBUNDLING BY ETHOS CAPITAL OF THE BRAIT EXCHANGEABLE BONDS DETERMINATION
OF TAX BASE COST FOR SOUTH AFRICAN INCOME TAX PURPOSES AND CASH PAYMENT IN
RESPECT OF FRACTIONAL ENTITLEMENTS
PLEASE SEE THE IMPORTANT NOTE AT THE END OF THIS ANNOUNCEMENT
1. INTRODUCTION
1.1 Shareholders of Ethos Capital ("Ethos Capital Shareholders") are referred to various
announcements released by the Company on the Stock Exchange News Service
operated by JSE Limited ("SENS"), including the declaration announcement released
by the Company on Tuesday, 18 November 2025 (the "Declaration Announcement"),
wherein Ethos Capital Shareholders were advised that the board of directors of Ethos
Capital had decided (based on the recommendation of the Investment Advisor) to
unbundle the remaining portion of Ethos Capital's investment in Brait plc ("Brait"),
comprising of the senior unsecured exchangeable registered bonds in Brait Investment
Holdings Limited, a wholly owned subsidiary of Brait (the "Brait Bonds") to Ethos
Capital Shareholders (the "2025 Brait Unbundling").
1.2 The purpose of this announcement is to notify Ethos Capital Shareholders of:
1.2.1 the determination of the base cost of the unbundled Brait Bonds (the "Brait
Distribution Bonds") and Ethos Capital A Ordinary shares (the "Ethos Capital
Shares") pursuant to the 2025 Brait Unbundling; and
1.2.2 the amounts which will be used to determine the cash payment in respect of
fractional entitlements to the Brait Distribution Bonds to which Ethos Capital
Shareholders may become entitled pursuant to the 2025 Brait Unbundling
("Fractional Entitlements").
1.3 The summary of the tax consequences of the 2025 Brait Unbundling, as set out below
and in the Declaration Announcement, represents general comments and does not
constitute a complete analysis of the tax consequences to Ethos Capital Shareholders
pursuant to the 2025 Brait Unbundling or the payment of Fractional Entitlements. It is
not intended to be, nor should it be interpreted to be, legal or tax advice. Neither Ethos
Capital, Brait nor its advisors, directors or employees can be held responsible for the
tax consequences of the 2025 Brait Unbundling. Ethos Capital Shareholders are advised
to consult their own professional tax advisors in this regard. The tax consequences of
the 2025 Brait Unbundling may also be different for non-resident shareholders based
on their country of residence. This includes the calculation of the costs of the Ethos
Capital Shares and the Brait Distribution Bonds for tax purposes going forward.
1.4 All capitalised terms used but not defined in this announcement shall bear the meanings
ascribed to them in the Declaration Announcement.
2. ALLOCATION TAX PRINCIPLES
2.1 The 2025 Brait Unbundling does not constitute an unbundling transaction for South
African tax purposes as set out in section 46 of the South African Income Tax Act, 57 of
1962 (the "Income Tax Act").
2.2 For South African tax purposes, the 2025 Brait Unbundling will comprise a foreign return
of capital as defined in section 1 of the Income Tax Act and as such, no South African
dividend tax arises.
2.3 In accordance with the Eighth Schedule to the Income Tax Act:
2.3.1 where a foreign return of capital by way of a distribution of the Brait Distribution
Bonds is received by or accrues to a holder of an Ethos Capital Share, the Ethos
Capital Shareholder must reduce the base cost in respect of each Ethos Capital
Share by an amount equal to the market value of the Brait Distribution Bonds on
the date that each Brait Distribution Bond accrues to the Ethos Capital
Shareholder; and
2.3.2 the Ethos Capital Shareholder is deemed to have acquired the Brait Distribution
Bonds for an amount equal to the market value thereof on the date that each Brait
Distribution Bond accrues to the Ethos Capital Shareholder for purposes of
determining the base cost thereof.
2.4 Ethos Capital Shareholders are notified that the closing price of the Brait Bonds and the
Ethos Capital Shares respectively on the Johannesburg Stock Exchange on Friday,
5 December 2025, being the record date for the 2025 Brait Unbundling (the "Record
Date"), will be announced by Ethos Capital on Friday, 5 December 2025 in accordance
with the JSE Corporate Actions Timetable.
2.5 The base cost of each Ethos Capital Share held by an Ethos Capital Shareholder that
qualified for the distribution will need to be reduced by the base cost apportionment
amount as set out under paragraph 3 below.
3. APPORTIONMENT FOR TAX PURPOSES
3.1 As set out in the Declaration Announcement, each Ethos Capital Shareholder is entitled
to receive 0.00086 Brait Distribution Bonds for every one Ethos Capital Share held on
the Record Date (the "Distribution Ratio"). The current base cost in respect of each
Ethos Capital Share must be reduced by an amount that is derived from the market value
of the Brait Distribution Bonds on the date that each Brait Distribution Bond accrues to
the Ethos Capital Shareholder. For purposes of this announcement, Ethos Capital has
assumed that the market value will be the closing price of the Brait Bonds on the Record
Date (ie Friday, 5 December 2025).
3.2 The base cost of each Ethos Capital Share must therefore be reduced by an amount in
Rand that is based on the Distribution Ratio multiplied by the closing price of the Brait
Bonds on the Record Date.
3.3 Ethos Capital will announce this amount along with the closing price of the Brait Bonds
and the Ethos Capital Shares respectively on SENS on Friday, 5 December 2024.
4. FRACTIONAL ENTITLEMENTS
4.1 Where an Ethos Capital Shareholder's entitlement to the Brait Distribution Bonds in
terms of the 2025 Brait Unbundling, calculated in accordance with the Distribution Ratio,
gives rise to a fraction of any Brait Distribution Bonds, such allocation must be rounded
down to the nearest whole number, resulting in allocations of whole Brait Distribution
Bonds and a cash payment in respect of the fraction to such shareholder(s). As indicated
in the Declaration Announcement, the aggregated excess fractional entitlements to the
Brait Distribution Bonds to which Ethos Capital Shareholders would otherwise be
entitled will not be transferred to Ethos Capital Shareholders, but will instead be sold
on behalf of and at the risk of the relevant Ethos Capital Shareholders in the market as
soon as practicable following the implementation of the 2025 Brait Unbundling, thereby
resulting in the cash payment to Ethos Capital Shareholders contemplated herein.
4.2 In accordance with the JSE Listings Requirements, Fractional Entitlements payments to
shareholders will be calculated based on the volume weighted average traded price of
the Brait Bonds on the LDT+1, being Wednesday, 3 December 2025 ("VWAP on
LDT+1"), less 10%, as detailed below –
VWAP on LDT+1 Amount that will be used to determine
the cash payment for the Fractional
Entitlements (ie VWAP on LDT+1 less
10%)
77,520.97660 cents 69,768.87894 cents
4.3 Cash payments in respect of the Fractional Entitlements are expected to be made on
Monday, 8 December 2025 to the CSDP or broker accounts of dematerialised Ethos
Capital Shareholders or to the bank accounts of certificated Ethos Capital Shareholders.
4.4 Certificated Ethos Capital Shareholders whose bank account details are not held by the
transfer secretaries, should provide such details to the transfer secretaries to enable
payment of the cash amount due. Should no details be on record, the funds will be held
by the Company in trust in terms of the provisions of the Constitution of the Company
until such time as the details have been provided, whereafter the cash entitlement will
be paid to the shareholder upon its request.
4.5 Shareholders are informed that, as far as the tax implications of the cash payment in
respect of the Fractional Entitlements is concerned, to the extent that Cash Proceeds
exceed that tax base cost of such Fractional Entitlements, the receipt of the cash
payment by shareholders will typically be subject to capital gains tax for shareholders
holding Ethos Capital Shares as capital assets.
Ebene, Mauritius (with simultaneous circulation in Johannesburg)
4 December 2025
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Important Note
Ethos Capital Shareholders are referred to the Declaration Announcement referenced in this
announcement (and accessible on Ethos Capital's website via the following link:
https://ethoscapital.mu/sens/sens-voluntary-nav-navps-and-cautionary-update-proceedings-at-the-
agm-and-declaration-of-brait-exchangeable-bonds-unbundling/) for the full disclaimers which apply
to this announcement (including the information contained herein) and are incorporated by
reference in full in this announcement, as if specifically stated.
Date: 04-12-2025 11:25:00
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