Tongaat Hulett Limited - unbundling of hulamin - Apportionment of cost for tax purposes

(formerly The Tongaat-Hulett Group Limited (“THG”))
(Incorporated in the Republic of South Africa)
(Registration number: 1892/000610/06)
(Share code: TON) & (ISIN: ZAE000096533)
("Tongaat Hulett" or "the company")


1. Introduction
Tongaat Hulett shareholders are referred to the circular dated 18 May 2007 ("circular") which related to, inter alia, the unbundling of Hulamin Limited ("Hulamin") and distribution of the shares in Hulamin to Tongaat Hulett shareholders recorded in the register as at the close of business on Friday, 29 June 2007 (“the record date”) to be effected by way of a distribution in specie in terms of Section 46 of the Income Tax Act, 1962 (Act 58 of 1962), as amended, in the ratio of one Hulamin share for every Tongaat Hulett share held on the record date. This unbundling of Hulamin shares was approved subject to the condition precedent that Hulamin is listed on the JSE Limited (“JSE”). Hulamin was listed and its shares commenced trade on the JSE with effect from the opening of business on Monday, 25 June 2007. The Tongaat-Hulett Group Limited’s name has been changed to "Tongaat Hulett Limited" and this change of name became effective on the JSE with effect from Monday, 25 June 2007.

The purpose of this announcement is to notify Tongaat Hulett shareholders of the ratio to be used in the apportionment for tax purposes of the cost of a THG share between the Tongaat Hulett share after the unbundling ("Tongaat Hulett share") and the Hulamin share received in terms of the unbundling ("Hulamin share"). A summary of the South African tax considerations was set out on page 30 of the circular.

2. Apportionment ratio
The ratio of the respective market values of a Tongaat Hulett share and a Hulamin share on the JSE as at 17:00 on Tuesday, 26 June 2007, being the day after the listing date, was 73.61% relating to a Tongaat Hulett share and 26.39% relating to a Hulamin share ("the apportionment ratio").

The apportionment ratio is to be used to apportion the cost of a THG share between a Tongaat Hulett share and a Hulamin share for the determination of profits and losses, of a capital or trading nature, derived on any future disposals of Tongaat Hulett shares or Hulamin shares.

In determining the base cost for the Tongaat Hulett shares and Hulamin shares for capital gains tax purposes, shareholders are deemed to have acquired both the Tongaat Hulett shares and the Hulamin shares at a combined cost equal to the initial expenditure allowable for capital gains tax purposes in acquiring the THG shares. Where the THG shares were acquired before 1 October 2001 the base cost will, broadly speaking, either be the market value of the THG shares on 1 October 2001 (which was R41.57 in respect of each THG share), the time-apportionment base cost or a cost equal to the amount of 20% of the eventual disposal proceeds. For example, if the THG shares were acquired before 1 October 2001 and should shareholders elect to determine this base cost on the market value of R41.57 per THG share on 1 October 2001, such market value would be apportioned as R30.60 per Tongaat Hulett share and R10.97 per Hulamin share by applying the apportionment ratio.

27 June 2007

Merchant bank and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)