Adams Regulatory News (ADA)

28 Apr 2008 07:00

Adamind Ltd28 April 2008 28 April 2008 Adamind Ltd ("Adamind" or "the Company") Update on cash distribution & clarification on ruling by Israeli Tax Authority Further to the announcement of 10 April 2008, Adamind announces today that ithas commenced distribution of approximately $19.2 million. Following are the details contained in the letter posted to shareholders: 1. On 25 April 2008, the Company posted to the Shareholders an amount equal toeither 75% or 80% of the respective amounts to which they are entitled under thecash distribution. Holders of Depository Interests will receive their portion ofthe cash distribution through CREST. Cheques will be sent by mail toshareholders who hold their shares in certificated form. The Company will retainthe withheld amounts. As stated in the Company's announcement of 10 April 2008,the cash distribution is subject to the maximum capital gains withholding rateprescribed by Israeli law (being currently 20% with respect to individualpersons holding 10% or less of the Company's share capital and 25% with respectto all other shareholders). Since many of the Shareholders hold their sharesthrough nominees and brokers, the Company may be unable to determine whichShareholders are subject to the 25% withholding and which Shareholders aresubject to the 20% withholding. Where the Company is unable to make suchdetermination, it will in the first instance withhold 25% of the respectiveamounts to which the respective Shareholders are entitled under the cashdistribution. 2. Following discussions with the Israeli Tax Authority and the Company'sadvisors, the following principles will apply to the payment of the withheldamounts to Shareholders: (I) Residents (both individual persons and entities) of countries that aresignatories to a treaty with Israel for the prevention of double taxation (eachsuch country, a "Treaty Country") may receive the withheld amounts either: (i) if they deliver to the Company (A) confirmation of residence from the taxauthorities of the Treaty Country in which they reside and (B) the form ofDeclaration for Purposes of Israeli Tax Withholding attached hereto as Exhibit A(the "Declaration") in which they confirm that (1) they are not Israeliresidents (as set forth in the Declaration) and that (2) they purchased theshares after the Company's IPO. For the avoidance of doubt the Company has beenadvised that any shares purchased as Placing Shares at the time of the Company'sIPO will be classified as purchased after the IPO for these purposes; or (ii) upon liquidation of the Company, provided that it is consummated by 31 July2009, if they deliver to the Company, at the time of such liquidation, theDeclaration (but without the need to provide the confirmation referred to inclause (i)(A) above). Please also note that, after the payment of $19.2 million, the Company willcontinue to hold approximately $4 million (in addition to the amount of $550,000held in escrow as part of the consideration for the assets sold by the Companyto Mobixell Networks (Israel) Ltd. in April 2007). This remaining cash is beingheld as instructed by the Israeli court that approved the cash distribution,primarily in connection with tax exposures both in Israel and the U.S. andprojected liabilities that the Company expects to incur between now and itsliquidation. The Company is currently engaged in negotiations with the taxauthorities in Israel and in the U.S., and it does not expect such negotiationsto be finalized before the end of 2008. Upon completion of such negotiations,the Company will update its shareholders as to the net funds available for afinal distribution. Therefore, in order to receive the withheld amounts from the $19.2 milliondistribution prior to the Company's liquidation, the foregoing Shareholdersshould send directly to Capita Registrars, at Corporate Actions, The Registry,34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom ("Capita"), theconfirmation referred to in clause 2(I)(i)(A) above and the attachedDeclaration. Shareholders who hold their shares or depositary interests througha nominee or broker should return the confirmation or Declaration through thenominee or broker, who will forward same to Capita. It is recommended that allconfirmations and Declarations be returned as soon as possible and in any eventby no later than 30 June 2008, to ensure that payment is made with the minimumof delay. The Company currently expects to complete the payment of withheldamounts to eligible Shareholders by the end of July 2008 to those shareholderswho have provided the necessary confirmations and Declarations by 30 June 2008. Both the initial funds as well as any withheld amounts that are paid toShareholders (who are not holders of Depository Interests) will be distributedin cheques by mail, and therefore actual receipt of funds may take a few daysafter distribution to shareholders through nominees or brokers. Both the initialfunds as well as any withheld amounts that are paid to Shareholders who areholders of Depository Interests, will be distributed through CREST in accordancewith established CREST procedures. Note that each Shareholder that holds shares or Depositary Interests through abroker or nominee must sign the Declaration and provide the tax residencyconfirmation themselves. Declarations and/or tax residency confirmations signedand/or provided by brokers or nominees will not suffice. Nominees and brokersare requested to provide to Capita, along with the tax confirmations referred toabove, the Declarations of the shareholders whose shares are held through suchnominees and brokers (and which were provided by the shareholders to suchnominees and brokers), together with a list of all the beneficial holders forwhich such nominees and brokers are holding the shares. This list shall includethe names of each beneficial owner and the number of shares/depository interestsof such beneficial holder. (II) Individual persons that are residents of non Treaty Countries will receivethe withheld amounts upon liquidation of the Company, provided that it isconsummated by 31 July 2009, if they deliver to the Company, at the time of suchliquidation, the Declaration. (III) Israeli shareholders (both individuals and entities) and entities that areresidents of non Treaty Countries cannot receive the withheld amounts unlessthey provide to the Company a specific exemption from the Israeli Tax Authority. 3. Upon receipt by the Company of the documents required for the payment toShareholders of the withheld amounts as set forth above, the Company willdeliver to such Shareholders the amounts withheld from them (or portionsthereof, as the case may be). However, if the Company's liquidation is notconsummated by 31 July 2009 (subject to extensions that may be approved by theIsraeli Tax Authority), all withheld amounts that remain in the Company'spossession as of 31 July 2009 shall be transferred to the Israeli Tax Authorityand the Company will no longer have any obligation towards the Shareholders withrespect to the payment of any withheld amounts. In addition, if the Company'sliquidation is consummated by 31 July 2009, all withheld amounts with respect towhich Shareholders do not provide to the Company the Declaration (as describedin clauses (i) and (ii) of Section 2 above) and that are in the Company'spossession as of the time of such liquidation shall be transferred to theIsraeli Tax Authority and the Company will no longer have any obligation towardsthe Shareholders with respect to the payment of any withheld amounts. 4. The Company acknowledges that Shareholders have previously been provided withtax status declaration forms, but asks that Shareholders complete the attachedDeclaration, pay particular attention to the required documentation listedtherein, and return to Capita the executed Declaration along with the requireddocumentation listed therein. 5. Any queries concerning the completion of the cash distribution should be madeto Capita Registrars on 0871 664 0321 or, if telephoning from outside the UK, on+44 20 8639 3399. Calls to the Capita Registrars 0871 664 0321 number arecharged at 10 pence per minute (including VAT) plus any service provider'snetwork extras. Calls to the Capita Registrars +44 20 8639 3399 number fromoutside the UK are charged at applicable international rates. Different chargesmay apply to calls made from mobile telephones and calls may be recorded andmonitored randomly for security and training purposes. Capita Registrars cannotprovide advice on the merits of the cash distribution nor give any financial,legal or tax advice. The Company remains committed to distribute to the Shareholders the Company'sassets, and looks forward to completing the cash distribution, including theamounts initially withheld, all in accordance with the foregoing. Enquiries: Corfin CommunicationsHarry Chathli,Neil Thapar +44 20 7977 0020 Landsbanki SecuritiesSimon Bridges,Cameron Duncan +44 20 7426 9000 This information is provided by RNS The company news service from the London Stock Exchange