As part of the Bytes Technology Group demerger in November 2020, Allied Electronics (Altron) retained approximately 9% of the convertible notes in order to settle the dividends tax which arose on the distribution.
At the time of the distribution, Altron had estimated that 9% of the convertible notes would be sufficient to settle the dividends tax. However, the actual liability for the dividends tax was only determined after Altron received the declarations from shareholders in terms of section 64FA of the Income Tax Act 58 of 1962.
Subsequent to receiving the declarations from chareholders and settling SARS, Altron has determined that it overestimated the dividends tax liability and so has additional cash on its balance sheet as a result of the demerger.
Since the intention of the demerger was to create and return value to shareholders, the directors have resolved to pay the cash to shareholders in the form of a special dividend.
Accordingly, Altron has given notice that a gross special dividend of 96 cents per Altron Ordinary Share, payable out of income reserves, was declared on 22 April 2021 and was subject to South African Reserve Bank approval, which was obtained on 19 April 2021.
The special dividend will be subject to dividends tax at a rate of 20%.