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ITALTILE LIMITED - Black Economic Empowerment Transaction and Dividend Declaration

Release Date: 10/09/2019 10:00
Code(s): ITE     PDF:  
 
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Black Economic Empowerment Transaction and Dividend Declaration

ITALTILE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1955/000558/06)
Share code: ITE ISIN: ZAE000099123
(“Italtile” or the “Company”)

BLACK ECONOMIC EMPOWERMENT TRANSACTION AND DIVIDEND DECLARATION

BEE TRANSACTION

Introduction and rationale

In accordance with Italtile’s strategy of improving its broad-based black economic empowerment (“BEE”)
credentials and establishing a medium to long-term relationship with a BEE partner with international
commercial experience relevant to the Company’s business, Italtile shareholders (“Shareholders”) are
hereby advised that on 22 August 2019 the Company entered into a subscription and relationship
agreement (“Subscription Agreement”) with Yard Investment Holdings Proprietary Limited (“Yard”) and
K2019313036 (South Africa) (RF) Proprietary Limited, a wholly owned subsidiary of Yard (“Yard SPV”),
in terms of which Yard SPV has subscribed for 26 400 000 ordinary shares in Italtile (“Ordinary Shares”),
(“Subscription Shares”) for an aggregate cash subscription amount of R312 176 258.34 (the “BEE
Transaction”).

The BEE Transaction is expected to enhance Italtile’s BEE ownership credentials for a period of at least
three years (“Transaction Term”).

Information about Yard and Yard SPV

Yard, originally founded by Mr Leslie Maasdorp and Mr Yogesh Narsing, is a South African based 100%
black-owned and active private equity investment firm managed by Mr Badian Maasdorp. Its current
shareholders      (“Yard   Shareholders”)     comprise   Mr Leslie Maasdorp,     Mr Yogesh Narsing,
Mr Badian Maasdorp and Mr Mikhail Maasdorp.

Yard SPV is a newly incorporated private company, wholly owned by Yard, and has not conducted any
business activities since its incorporation. Yard SPV is a special purpose vehicle through which the BEE
Transaction was implemented and its primary purpose is to house the Subscription Shares acquired
pursuant to the BEE Transaction for the benefit of Yard Shareholders.

Italtile is pleased to be establishing this relationship with Yard which brings with it international commercial
experience relevant to the Company’s business.

For the avoidance of doubt, Yard and Yard SPV are public shareholders, as defined in paragraphs 4.25
to 4.27 of the JSE Limited Listings Requirements (“Listings Requirements”) and are not related parties
to Italtile.

Salient terms and conditions of the BEE Transaction

The BEE Transaction has been implemented by way of a general issue of shares for cash, in terms of
paragraph 5.50(b) of the Listings Requirements, pursuant to the general authority granted by
Shareholders at the annual general meeting of Shareholders held on Friday, 16 November 2018.

The Subscription Shares were allotted and issued at a price of R11.82 (rounded to 2 decimal places) per
Subscription Share, being a 10% discount to the 30 day volume weighted average price at which the
Ordinary Shares traded on the securities exchange operated by the JSE Limited (“JSE”) as at
21 August 2019 (being the date immediately prior to the date of signature of the Subscription Agreement).
The JSE approved the listing of the Subscription Shares on the Main Board of the JSE, with effect from
today, 10 September 2019.

The Subscription Shares amount to approximately 2% of the total Ordinary Shares in issue following
implementation of the BEE Transaction. In order to secure the BEE ownership credentials which shall
accrue to Italtile pursuant to the BEE Transaction, subject to the provisions of the BEE Transaction
agreements, Yard SPV has undertaken not to dispose of the Subscription Shares during the Transaction
Term.


DECLARATION OF A SPECIAL DIVIDEND

In light of the BEE Transaction and the Italtile group’s cash reserves being in excess of operational
requirements, the board of directors of the Company (the “Board”) has declared a gross special cash
dividend (number 7) of 23.0 cents per Ordinary Share (“Special Dividend”) to all Shareholders recorded
in the Company’s securities register as at Friday, 4 October 2019.

Italtile has obtained the relevant South African Reserve Bank approval in respect of the Special Dividend,
and the Board has reasonably concluded that the Company will satisfy the solvency and liquidity test
immediately after distribution thereof and for the next 12 months.

In accordance with paragraphs 11.17(a)(i) to (ix) and 11.17(c) of the Listings Requirements, the following
additional information is provided:

-   the Special Dividend has been declared out of income reserves;
-   the local dividend withholding tax rate is 20%;
-   the gross local dividend amount is 23.0 cents per Ordinary Share for Shareholders exempt from the
    dividend withholding tax;
-   the net local dividend amount is 18.4 cents per Ordinary Share for Shareholders liable to pay the
    dividend withholding tax;
-   the local dividend withholding tax amount is 4.6 cents per Ordinary Share for Shareholders liable to
    pay the dividend withholding tax;
-   Italtile’s income tax reference number is 9050182717; and
-   Italtile has 1 321 654 148 Ordinary Shares in issue including 10 451 786 Ordinary Shares held by
    the Italtile Share Incentive Trust, 63 830 201 Ordinary Shares held as BEE treasury shares, 4 981
    301 Ordinary Shares held by Italtile Ceramics Proprietary Limited and the Subscription Shares held
    by Yard SPV.

The Special Dividend timetable is as follows:

-   The last day to trade cum dividend, in order for Shareholders to participate in the Special Dividend,
    will be Tuesday, 1 October 2019.
-   The Ordinary Shares will commence trading ex-dividend from the commencement of business on
    Wednesday, 2 October 2019.
-   The record date, in order for Shareholders to participate in the Special Dividend, will be Friday, 
    4 October 2019.
-   The Special Dividend will be paid to Shareholders on Monday, 7 October 2019.

Ordinary Shares may not be dematerialised or rematerialised between Wednesday, 2 October 2019 and
Friday, 4 October 2019, both days inclusive.


Johannesburg
10 September 2019

Corporate Advisor and Transaction Sponsor to Italtile on the BEE Transaction
One Capital

Attorneys to Italtile on the BEE Transaction
Cliffe Dekker Hofmeyr Inc.

Attorneys to Yard and Yard SPV on the BEE Transaction
Cliffe Dekker Hofmeyr Inc.

Date: 10/09/2019 10:00:00
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