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INDUSTRIALS REIT LIMITED - Finalisation announcement in respect of an election to receive either a cash dividend or a scrip dividend

Release Date: 11/01/2022 10:00
Code(s): MLI     PDF:  
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Finalisation announcement in respect of an election to receive either a cash dividend or a scrip dividend

INDUSTRIALS REIT LIMITED
(Formerly Stenprop Limited)
(Registered in Guernsey with registration number 64865)
LSE share code: MLI  JSE share code: MLI
ISIN: GG00BFWMR296
(“Industrials REIT” or the “Company”)

11 January 2022


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 Friday, 17 December 2021 in respect of an election to receive the interim dividend of 3.375 pence
per share (the “dividend”) for the six months ended 30 September 2021, 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 as follows:

-       3.020 pence (89.48%) will comprise a property income distribution (“PID”). The PID will be
        subject to a deduction of a 20% United Kingdom (“UK”) withholding tax unless exemptions
        apply.
-       0.355 pence (10.52%) will comprise a non-PID. The non-PID will be treated as an ordinary UK
        company dividend, with no UK withholding tax deducted.

(i) Shareholders receiving the dividend in cash:

South African (“SA”) shareholders are advised that the exchange rate for the dividend will be
21.10500 ZAR to 1.00 GBP (the “exchange rate”), as obtained by the Company on Monday, 10 January
2022, resulting in a gross local dividend amount of 71.22938 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:

                                                                      UK Shareholders             SA Shareholders

   PID                                                                    (GBP pence)                 (ZAR cents)
 
   Gross amount of PID                                                        3.02000                    63.73710

   Less 20% UK withholding tax*                                               0.60400                    12.74742
 
   Net PID dividend payable**                                                 2.41600                    50.98968

   Less effective 5% SA dividends tax for SA Shareholders***                      n/a                     3.18686

   Net PID dividend payable***                                                    n/a                    47.80283

   * 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).

                                                                      UK Shareholders             SA Shareholders

   Non-PID*                                                               (GBP pence)                 (ZAR cents)

   Non-PID element                                                            0.35500                     7.49228

   Less 20% SA dividends tax for SA Shareholders**                                n/a                     1.49846

   Net Non-PID dividend payable                                               0.35500                     5.99382

   * Non-PID – taxed as a normal dividend for UK purposes, i.e. no UK withholding tax applicable.
   ** Certain categories of SA shareholders are exempt from SA dividends tax, e.g. SA resident companies.

(ii) Shareholders who elect to take shares:

The scrip dividend reference price for UK shareholders is 195.92500 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, 7 January 2022, less the dividend. The scrip dividend
reference price for SA shareholders is 41.34997 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, 11 February 2022.

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:

                                                                      UK Shareholders             SA Shareholders

   In respect of the PID                                                      (GBP £)                       (ZAR)

   PID dividend net of UK withholding tax entitled to
   receive*
   (As per (i) above x 1,000):                                              £24.16000               509.89680 ZAR
   Scrip dividend reference price                                            £1.95925                41.34997 ZAR

   Calculated number of new shares to which                                  12.33125                    12.33125
   shareholder is entitled
   Actual number of new shares received                                            12                          12
   Gross Cash Balance (multiply fractional entitlement
   by scrip dividend reference price)                                        £0.64900                13.69718 ZAR
   
   * 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

                                                                      UK Shareholders             SA Shareholders

   In respect of the non-PID element                                          (GBP £)                       (ZAR)

   Gross amount of non-PID dividend entitled to
   receive
   (Gross Non-PID per (i) above x 1,000):                                    £3.55000                74.92275 ZAR
   Scrip dividend reference price                                            £1.95925                41.34997 ZAR
   Calculated number of new shares to which                                   1.81192                     1.81192
   shareholder is entitled
   Actual number of new shares received                                             1                           1
   Gross cash payment (multiply fractional entitlement
   by scrip dividend reference price)                                        £1.59075                35.57287 ZAR


TIMETABLE

The salient dates and times announced on Friday, 17 December 2021 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 paragraph 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

Java Capital                                                                         +27 (0)11 722 3050
(JSE Sponsor)


About Industrials REIT:

Industrials REIT is a UK REIT traded on the LSE and the JSE. The objective of the Company is to
deliver sustainable growing income to its investors. Industrials REIT invests in a diversified portfolio of
UK multi-let industrial (MLI) properties with the strategic goal of becoming the leading MLI business in
the UK. For further information, go to www.industrialsreit.com.

Date: 11-01-2022 10:00:00
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