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Circular to NEPI Rockcastle shareholders in respect of an election to receive a capital repayment or ordinary cash
NEPI Rockcastle N.V.
Incorporated in the Netherlands
Registration number: 87488329
Share code: NRP
ISIN: NL0015000RT3
("NEPI Rockcastle" or "the Company")
CIRCULAR TO NEPI ROCKCASTLE SHAREHOLDERS IN RESPECT OF AN ELECTION TO RECEIVE A CAPITAL REPAYMENT OR ORDINARY CASH DIVIDEND
Shareholders are referred to NEPI Rockcastle's reviewed condensed consolidated financial results for the year ended
31 December 2024, published on Tuesday, 25 February 2025, wherein shareholders were advised that the board of directors
had declared a final dividend of 27.05 euro cents per share for the six months ended 31 December 2024 ("final dividend"),
corresponding to a 90% dividend pay-out ratio.
The board of directors of the Company has resolved to offer to NEPI Rockcastle shareholders the election to receive the
final dividend either:
(i) via a reduction and repayment in cash of the nominal value per share ("capital repayment"), by way of amendments to
articles of association of the Company ("the Articles"), as approved by shareholders at the annual general meeting held on
14 May 2024; or
(ii) as an ordinary cash dividend out of distributable profits ("cash dividend").
No scrip dividend alternative is offered in respect of the final dividend. Both options above will be settled in cash.
A circular in this regard was posted today and is available on the Company's website at:
https://nepirockcastle.com/wp-content/uploads/2025/03/Circular-to-NEPI-Rockcastle-shareholders-in-respect-of-
the-final-dividend-for-the-six-months-ended-31-December-2024.pdf
The election is available in respect of all or part of a shareholder's shareholdings as at Thursday, 20 March 2025.
The capital repayment will be paid to shareholders unless they elect to receive the cash dividend. Therefore, NEPI
Rockcastle shareholders who wish to receive the cash dividend must ensure that their elections are lodged in accordance
with the "Salient Dates and Times" set out below.
The rationale for offering two alternatives as to how cash is received, namely as a capital repayment or a cash dividend, is
to reduce the compliance costs of claiming tax refunds in respect of the cash dividend.
Capital repayment
Shareholders receiving the capital repayment (the default) will receive an amount of 27.05 euro cents per share in cash, as
a repayment of the nominal value of their shares. The aggregate amount by which the nominal value of ordinary shares is
reduced will be partly paid to shareholders opting (or opting by default) to receive the capital repayment, such part
representing the total of all distributions opted (or opted by default) to be received as a capital repayment by shareholders.
The remaining balance will be added back to the share premium reserve.
Shareholders who hold shares traded on the JSE and/or A2X will receive the capital repayment in South African Rand
("ZAR"), converted from Euro at a ZAR:EUR conversion rate to be announced on Monday, 10 March 2025 ("the
announced exchange rate"). Shareholders who hold NEPI Rockcastle shares traded on Euronext Amsterdam will receive
the capital repayment in Euro.
Cash dividend
Shareholders who elect to receive the cash dividend will receive an amount of 27.05 euro cents per share in cash, net of any
applicable withholding tax payable. The cash dividend will be paid out of the Company's distributable profits.
Shareholders who hold shares traded on the JSE and/or A2X will receive the cash dividend in ZAR, converted from Euro
at the announced exchange rate. Shareholders who hold NEPI Rockcastle shares traded on Euronext Amsterdam will receive
the cash dividend in Euro.
As at the date of this announcement, the Company has 712,357,309 ordinary shares of €0.01 each in issue.
SALIENT DATES AND TIMES
For shareholders holding shares traded on the JSE and/or A2X
2025
Announcement on SENS and ANS regarding an election to receive either a capital Monday, 3 March
repayment or a cash dividend and issue of circular
Finalisation announcement on SENS and ANS of the exchange rate before 11:00am Monday, 10 March
South African time
Last day to trade on the JSE and A2X in order to be eligible for the capital repayment or Monday, 17 March
cash dividend
Shares commence trading on the JSE and A2X ex the final dividend Tuesday, 18 March
Record date for receipt of the capital repayment or cash dividend Thursday, 20 March
Cash dividend elections to be made no later than 12:00pm South African time Friday, 4 April
Announcement on SENS and ANS of the date of the amendment of the Articles to Tuesday, 8 April
facilitate the capital repayment
Amendment of Articles to reflect increase and subsequent reduction of the nominal value Wednesday, 9 April
per share
Payment of capital repayment or cash dividend Friday, 11 April
Notes:
1. The above dates and times are subject to change. Any changes will be released on SENS and ANS and the website of
the Company at www.nepirockcastle.com.
2. For the avoidance of doubt, only those shareholders who hold NEPI Rockcastle shares on the record date will receive
the capital repayment, or be entitled to elect to receive the cash dividend.
3. Transfers of shares between the Euronext Amsterdam and the JSE or A2X may not take place between Monday,
10 March 2025 and Thursday, 20 March 2025, both days inclusive. Accordingly, the above dates and times will apply
in respect of all shares traded on the JSE and A2X at the commencement of trade from Monday, 10 March 2025.
4. Shares may not be dematerialised or rematerialised between Tuesday, 18 March 2025 and Thursday, 20 March 2025,
both days inclusive.
For shareholders holding shares traded on Euronext Amsterdam
2025
Announcement on the Company's website regarding an election to receive either a Monday, 3 March
capital repayment or a cash dividend and issue of circular
Finalisation announcement on the Company's website of the exchange rate before Monday, 10 March
10:00am Central European Time
Last day to trade on Euronext Amsterdam in order to be eligible for the capital Tuesday, 18 March
repayment or cash dividend
Shares commence trading on Euronext Amsterdam ex the final dividend Wednesday, 19 March
Distribution of the Technical Information Memorandum Wednesday, 19 March
Record date for receipt of the capital repayment or cash dividend Thursday, 20 March
Start of election period Friday, 21 March
Accounts at Euroclear Nederland of the Admitted Institutions will be credited with Friday, 21 March
dividend rights
Close of election period Friday, 4 April
Announcement on the Company's website of the date of the amendment of the Tuesday, 8 April
Articles to facilitate the capital repayment
Amendment of Articles to reflect increase and subsequent reduction of the nominal Wednesday, 9 April
value per share
Payment of capital repayment or cash dividend Friday, 11 April
Notes:
1. The above dates and times are subject to change. Any changes will be released on the website of the Company at
www.nepirockcastle.com .
2. For the avoidance of doubt, only those shareholders who hold NEPI Rockcastle shares on the record date will receive
the capital repayment, or be entitled to elect to receive the cash dividend.
3. Transfers of shares between the Euronext Amsterdam and the JSE or A2X may not take place between Monday,
10 March 2025 and Thursday, 20 March 2025, both days inclusive. Accordingly, the above dates and times will apply
in respect of all shares traded on Euronext Amsterdam at the commencement of trade from Monday, 10 March 2025.
TAX IMPLICATIONS
The commentary below does not constitute tax advice and is intended only as a high-level guide. Shareholders should
consult their own professional advisers to confirm their tax position vis-à-vis any distribution declared by the Company.
The Company takes no responsibility for the submission of claims to any tax authority for or on behalf of any shareholder,
for liaising with any tax authority for or on behalf of any shareholder in respect of any such claims, or for the outcome of
any such claims. Claims to any tax authority are the sole responsibility of the shareholder concerned.
For shareholders residing outside of South Africa, the distribution (of the final dividend) may have other legal or tax
implications and such shareholders are advised to obtain appropriate advice from their professional advisers in this regard.
For United States ("U.S.") shareholders, the tax implications of receiving the capital repayment or cash dividend are
presented in the paragraph titled "U.S. tax implications" below.
Capital repayment
Shareholders receiving the capital repayment (the default) will receive an amount of 27.05 euro cents per share as a
repayment of the nominal value of their shares, paid from share capital for Dutch tax purposes. No Dutch dividend tax will
be withheld on these capital repayments paid to shareholders.
For South African shareholders, the capital repayment should be treated as a return of capital (because from a Dutch
standpoint it is treated as repayment of capital), therefore no South African dividend tax should apply. The capital repayment
will reduce the shares' tax base, resulting in a potentially higher capital gain in the future when the shares are sold. Insofar
as the repayment exceeds the shares' tax base, it may immediately result in capital gains tax.
Cash dividend
Dutch tax implications
Main rule
The Company must withhold 15% Dutch dividend tax on the cash dividend, leaving a distribution amount per share net of
Dutch dividend tax. The Dutch dividend tax will be remitted to the Dutch tax authorities on behalf of the recipient of the
cash dividend. Where required, a dividend note will be issued.
Refund procedure
The beneficial owner of the cash dividend may be entitled to a partial or full refund of the Dutch dividend tax on the basis
of Dutch domestic law or a tax treaty that the Netherlands has concluded with the country of tax residence of the shareholder.
Information on the refund can be found on the website of the Dutch tax authorities:
https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/belastingdienst/business/dividend-tax/dividend-payment/recipient-of-
dividend-outside-the-netherlands-dividend-tax-refund/recipient-of-portfolio-dividend-outside-the-netherlands-dividend-tax-
refund/recipient-of-dividend-outside-the-netherlands-dividend-tax-refund-procedure. Depending on your specific situation, you
must either fill out a form and send it to the Dutch tax authorities (address is noted on the form) or register electronically
and request the refund electronically. It is noted that most countries provide for some form of relief of double taxation, but
usually not more than the tax that the Netherlands is allowed to levy on the basis of the applicable tax treaty. Foreign
shareholders are therefore encouraged to request a refund to which they are entitled on the basis of the applicable tax treaty
concluded with the Netherlands (if any).
Reduction or exemption at source
A shareholder, not being a natural person, who beneficially owns an interest in the nominal paid up share capital of the
Company of 5% or more (a "Substantial Interest"), or a shareholder who beneficially owned a Substantial Interest in the
Company for at least 12 months and still owns shares that formed part of to such Substantial Interest, may be entitled to a
reduction or exemption at source. Such shareholder is advised to liaise with its own tax advisor to determine its possible
entitlement to a reduction or exemption.
South African tax implications
General
Cash dividends received from a foreign (non-resident) company in respect of a share that is listed on the JSE are regarded
as foreign dividends for South African income tax and dividends withholding tax purposes.
As a general rule, 20% South African dividends withholding tax ("SADWT") will be withheld by the regulated intermediary
in South Africa ("CSDP") on the cash dividend, leaving a distribution amount per share net of SADWT. This could be
different if:
- a shareholder qualifies for an exemption from SADWT on the basis of South African domestic law; and
- the formal requirements to apply such exemption from SADWT are satisfied (insofar as applicable).
In order to qualify for any exemption from SADWT the beneficial owner of the cash dividend must provide the following
documentation to the CSDP:
- a written declaration that the cash dividend is exempt from SADWT in terms of South African domestic law; and
- a written undertaking to inform the regulated intermediary in writing should the circumstances affecting the
applicable exemption change, or should the beneficial owner cease to be the beneficial owner,
by the date determined by the CSDP, or where no date is determined, by the date of payment of the cash dividend.
The requirements in order to qualify for an exemption or rebate of SADWT in terms of a tax treaty are dealt with below.
Tax implications for corporate shareholders
Where the South African resident beneficial owner of the cash dividend is a company, the cash dividend will be exempt
from SADWT in terms of domestic law, provided the documentary requirements set out above are complied with.
Tax implications for non-corporate shareholders
Where the South African resident beneficial owner of the cash dividend is a non-corporate shareholder, the cash dividend
may be exempt from SADWT in terms of domestic law. Where the cash dividend does not qualify for one of the domestic
exemptions, SADWT will be suffered at an initial rate of 20%. One would then consider the application of the rebate
mechanism described below in order to determine the final amount of tax payable.
Rebate on SADWT suffered
A rebate on non-refundable foreign taxes imposed on the cash dividend paid is available to reduce the SADWT liability.
This rebate is calculated with reference to the dividend withholding tax ("DWHT") rate to which all qualifying companies
resident in South Africa and all qualifying individual persons resident in South Africa are entitled in terms of the tax treaty
concluded between the Netherlands and South Africa ("NL-SA treaty") (and not the standard rate of 15% DWHT). The
applicable rate of DWHT should be determined with reference to the analysis set out above.
The rebate will be limited to the SADWT imposed.
Where the cash dividend is exempt from DWHT in terms of Dutch domestic law as a result of the shareholder holding 5%
or more of NEPI Rockcastle's shares, no rebate will be available.
The CSDP is responsible for withholding SADWT from the cash dividend payable to shareholders holding shares trading
on the JSE or A2X and paying such amounts to the South African Revenue Service. In order to apply a rebate, the CSDP
must be satisfied:
- that DWHT was applied; and
- that the relevant shareholder qualifies for a reduced rate of DWHT.
The rebate for foreign taxes is determined in ZAR by translating the foreign currency amount using the same rate used to
translate the foreign dividend.
Refund mechanism
Where the above results in shareholders holding shares trading on the JSE or A2X who are not exempt from SADWT
suffering more than an aggregate 20% dividends withholding tax, such shareholders are advised to follow the procedures
set out above in order to claim a refund in terms of the NL-SA treaty.
The maximum dividends withholding tax to be suffered by a South African shareholder will be 20%. Whether or not there
is a refund due to the shareholder should be determined with reference to the specific facts applicable to that shareholder.
Where a CSDP is satisfied that a particular shareholder has suffered 15% DWHT, which is not recoverable by that
shareholder from the Dutch tax authority, such CSDP should withhold 5% SADWT (being the 20% SADWT less 15%
DWT), unless a specific South African domestic exemption applies and the required documentation as set out above has
been provided to the CSDP.
U.S. tax implications
The following is a summary of certain U.S. federal income tax considerations relevant to U.S. shareholders (as
defined below) of the capital repayment and cash dividend. This summary is based on the U.S. Internal Revenue
Code of 1986 (the "Code"), final, temporary and proposed U.S. Treasury regulations, administrative and judicial
interpretations, all of which are subject to change, possibly with retroactive effect.
This summary does not discuss all aspects of U.S. federal income taxation that may be relevant to investors in light
of their particular circumstances, such as investors subject to special tax rules (including, without limitation: (i)
financial institutions; (ii) insurance companies; (iii) traders or dealers in stocks, securities, or currencies or notional
principal contracts; (iv) regulated investment companies; (v) real estate investment trusts; (vi) tax-exempt
organisations; (vii) entities that are treated as partnerships, or pass-through entities for U.S. federal income tax
purposes, or persons that hold NEPI Rockcastle shares through such entities; (viii) holders that are not U.S.
shareholders (as defined below); (ix) holders that own (directly, indirectly or constructively) 5 per cent. or more of
the voting stock of the Company; (x) investors that hold NEPI Rockcastle shares as part of a straddle, hedge,
conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes; (xi) investors that
have a functional currency other than the U.S. dollar; and (xii) U.S. expatriates and former long-term residents of the
United States), all of whom may be subject to tax rules that differ significantly from those summarised below. This
summary does not address, U.S. federal estate, gift, Medicare contribution or alternative minimum tax considerations,
or non-U.S., state or local tax considerations. This summary only addresses persons that hold NEPI Rockcastle shares
as capital assets (generally, property held for investment).
For the purposes of this summary, a U.S. shareholder is a beneficial owner of NEPI Rockcastle shares that is for U.S.
federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation
created in, or organised under the laws of, the United States or any state thereof, including the District of Columbia,
(iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of
its source or (iv) a trust that is subject to U.S. tax on its worldwide income regardless of its source.
If a partnership holds NEPI Rockcastle shares, the tax treatment of a partner in such partnership generally will depend
upon the status of the partner and the activities of the partnership. Any such partner or partnership should consult
their tax advisors as to the U.S. federal income tax consequences to them of the capital repayment and cash dividend.
Capital repayment and cash dividend
Subject to the passive foreign investment company ("PFIC") rules discussed below, a distribution made by the
Company on the NEPI Rockcastle shares generally will be treated as a dividend includible in the gross income of a
U.S. shareholder as ordinary income to the extent of the Company's current and accumulated earnings and profits as
determined under U.S. federal income tax principles. To the extent the amount of such distribution exceeds the
Company's current and accumulated earnings and profits as so computed, the distribution will be treated first as a
non-taxable return of capital to the extent of such U.S. shareholder's adjusted tax basis in the NEPI Rockcastle shares
and, to the extent the amount of such distribution exceeds such adjusted tax basis, will be treated as gain from the
sale of such shares. The Company does not maintain calculations of earnings and profits for U.S. federal income tax
purposes. Therefore, a U.S. shareholder should expect that cash distributions to the extent of the capital repayment
and the cash dividend will generally be treated as a dividend. Such dividends will not be eligible for the dividends
received deduction allowed to corporations.
Distributions pursuant to the capital repayment and the cash dividend will constitute income from sources outside
the United States for foreign tax credit limitation purposes.
The capital repayment and the cash dividend will be paid in currency other than U.S. dollars. The U.S. dollar value
of the capital repayment and the cash dividend in foreign currency must be calculated by reference to the exchange
rate in effect on the date of receipt of such distribution by the U.S. shareholder, regardless of whether the foreign
currency is in fact converted into U.S. dollars. If the foreign currency so received is converted into U.S. dollars on
the date of receipt, such U.S. shareholder generally will not recognise foreign currency gain or loss on such
conversion. If the foreign currency so received is not converted into U.S. dollars on the date of receipt, such U.S.
shareholder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or
loss on a subsequent conversion or other disposition of the foreign currency generally will be treated as ordinary
income or loss to such U.S. shareholder and generally will be income or loss from sources within the United States
for foreign tax credit limitation purposes.
PFIC rules
In general, a corporation organised or incorporated outside the United States is a PFIC in any taxable year in which,
after taking into account the income and assets of certain subsidiaries, either (i) at least 75 per cent. of its gross
income is classified as "passive income" or (ii) at least 50 per cent. of the average quarterly value attributable to its
assets produce or are held for the production of passive income. Passive income for this purpose generally includes
dividends, interest, royalties, rents and gains from commodities and securities transactions.
The Company has not determined whether it was a PFIC for any taxable year, but believes there is a substantial
possibility that it was a PFIC for the year ending on December 31, 2024 and that it may be a PFIC in future taxable
years. If the Company is classified as a PFIC in any year that a U.S. shareholder is a shareholder, the Company
generally will continue to be treated as a PFIC for that U.S. shareholder in all succeeding years, regardless of whether
the Company continues to meet the income or asset test described above.
If a U.S. shareholder has not made a valid mark-to-market or qualified electing fund election, and the Company was
a PFIC for any taxable year during which an investor is a U.S. shareholder, the investor will be subject to special tax
rules with respect to any "excess distribution" received on the NEPI Rockcastle shares, which could include the
capital repayment and the cash dividend. Distributions received in a taxable year that are greater than 125 per cent.
of the average annual distributions received during the shorter of the three preceding taxable years or the U.S.
shareholder's holding period for the NEPI Rockcastle shares will be treated as excess distributions. Under these
special tax rules: (i) the excess distribution or gain will be allocated rateably over the U.S. shareholder's holding
period for the NEPI Rockcastle shares; (ii) the amount allocated to the current taxable year and other years before
the Company was a PFIC will be treated as ordinary income; and (iii) the amount allocated to each other year will be
subject to tax at the highest tax rate in effect for that year and an interest charge (at the rate generally applicable to
underpayments of tax for the period from such year to the current year) will be imposed on the resulting tax
attributable to each such year. A U.S. shareholder will generally be subject to similar rules with respect to
distributions to the Company by, and dispositions by the Company of the stock of, any direct or indirect subsidiaries
of the Company that are also PFICs.
U.S. shareholders should consult their tax advisors regarding the effect of the PFIC rules on the capital repayment
and the cash dividend.
For further information please contact:
NEPI Rockcastle N.V.
Rüdiger Dany/Eliza Predoiu +31 20 237 4770
JSE sponsor
Java Capital +27 (0) 78 456 9999
Euronext Listing Agent
ING Bank +31 20 563 6685
Media Relations mediarelations@nepirockcastle.com
3 March 2025
Date: 03-03-2025 05:45:00
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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