PSG : Distribution of Circular and Notice Of General Meeting

PSG GROUP LIMITED

(Incorporated in the Republic of South Africa) (Registration number: 1970/008484/06)

JSE Limited ("JSE") share code: PSG

ISIN code: ZAE000013017

LEI code: 378900CD0BEE79F35A34 ("PSG Group" or "the Company")

DISTRIBUTION OF CIRCULAR AND NOTICE OF GENERAL MEETING

1. INTRODUCTION

1. PSG Group Shareholders are referred to the Detailed Cautionary Announcement released by PSG Group on SENS on 1 March 2022, advising PSG Group Shareholders that the PSG Group Board (with the recusal of the directors who are Remaining Shareholders) had, in principle, resolved to investigate the unlocking of value for the benefit of PSG Group Shareholders, through the steps set out therein, as well as to the Firm Intention Announcement dated 25 April 2022, advising PSG Group Shareholders that, subject to the fulfilment (or where permissible, waiver) of the PSG Group Restructuring Conditions, including receipt of the requisite Shareholder approval, PSG Group will, as one indivisible arrangement, implement the PSG Group Restructuring, a summary of which is set out in paragraph 2 below.
2. The circular detailing the PSG Group Restructuring ("Circular") is being distributed to PSG
   Group Shareholders today, 8 July 2022.
3. All capitalised terms used but not defined in this announcement shall bear the meanings ascribed to them in the Firm Intention Announcement, read together with the Circular.

2. SUMMARY OF THE PSG GROUP RESTRUCTURING

2.1 Subject to the fulfilment (or where permissible, waiver) of the PSG Group Restructuring Conditions detailed below, PSG Group will as one indivisible arrangement:

2.1.1 implement the PSG Group Unbundling by unbundling -

1. the PSG Konsult Unbundled Shares, comprising approximately 61.1 percent of the total issued share capital of PSG Konsult, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 3.86921 PSG Konsult Shares for every PSG Group Share held on the PSG Group Unbundling Record Date;
2. the Curro Unbundled Shares, comprising approximately 63.6 percent of the total issued share capital of Curro, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.81597 Curro Shares for every PSG Group Share held on the PSG Group Unbundling Record Date;

1. the Kaap Agri Unbundled Shares, comprising approximately 34.7 percent of the total issued share capital of Kaap Agri, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 0.12364 Kaap Agri Shares for every PSG Group Share held on the PSG Group Unbundling Record Date;
2. the CA&S Unbundled Shares, comprising approximately 47.0 percent of the total issued share capital of CA&S, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.03650 CA&S Shares for every PSG Group Share held on the PSG Group Unbundling Record Date; and
3. the Stadio Unbundled Shares, being a portion of PSG Group's shareholding in that company, comprising approximately 25.1 percent of the total issued share capital of Stadio, to PSG Group Shareholders by way of a pro rata distribution in specie, in the ratio of 1.02216 Stadio Shares for every PSG Group Share held on the PSG Group Unbundling Record Date,

in terms of section 46 of the Companies Act and section 46 of the Income Tax Act, and amounting to a disposal of the greater part of PSG Group's assets or undertaking in terms of section 112 of the Companies Act;

1. propose that, inter-conditionally with the PSG Group Unbundling, Exiting Shareholders dispose of their shareholding in PSG Group to PSG Group by way of a scheme of arrangement under section 114 of the Companies Act, in terms of the PSG Group Scheme and under a specific authority to repurchase securities in terms of the JSE Listings Requirements ("Specific Repurchase"), for a cash scheme consideration of R23.00 per PSG Group Share (subject to a potential adjustment as set out in paragraph 4.14 of the Firm Intention Announcement and detailed further in the Circular) ("Scheme Consideration") following which the Remaining Shareholders of PSG Group will be the only Shareholders of PSG Group; and
2. be delisted from the JSE following implementation of the PSG Group Unbundling and the PSG Group Scheme.

2.2 The JSE has in relation to the Specific Repurchase exempted PSG Group from compliance with paragraph 5.69(b) of the JSE Listings Requirements, which ordinarily requires that specific repurchases be approved by a company's shareholders, other than shareholders and their associates who are participating in the repurchase. The JSE has provided the exemption as the voting requirements for a scheme of arrangement under the Companies Act differ from the voting requirements for a specific repurchase under the JSE Listings Requirements and including both would create an anomalous situation. As a result, only Exiting Shareholders will be entitled to vote on the resolution approving the PSG Group Restructuring, with Remaining Shareholders being excluded.

3. PSG GROUP RESTRUCTURING CONDITIONS

3.1 The PSG Group Restructuring will be subject to the fulfilment (or where applicable, waiver) of the following PSG Group Restructuring Conditions -

1. by no later than Monday, 15 August 2022, the requisite majority of PSG Group Shareholders passing the PSG Group Restructuring Resolution in terms of the Companies Act and Companies Regulations;
2. by no later than Wednesday, 31 August 2022, to the extent that the provisions of section 115(2)(c) read together with section 115(3) of the Companies Act become applicable -

1. the special resolution to approve the PSG Group Restructuring, being approved by the court unconditionally or, if subject to conditions, PSG Group confirms in writing that the conditions are acceptable to it;
2. the special resolution to approve the PSG Group Restructuring not being set aside by the court; or
3. PSG Group not treating the aforesaid special resolution to approve the PSG Group Restructuring as a nullity in terms of section 115(5)(b) of the Companies Act;

1. within the period prescribed by section 164(7) of the Companies Act, no valid demands (relating to Appraisal Rights) have been received by PSG Group from any PSG Group Shareholder in terms of that section read together with section 115(8) of the Companies Act, in relation to the PSG Group Unbundling and the PSG Group Scheme, or, if such a demand has been duly delivered, PSG Group has waived this condition on or before Friday, 23 September 2022;
2. by no later than the first Business Day following fulfilment (or, where applicable, waiver) of the last outstanding PSG Group Restructuring Condition (other than the condition contained in this paragraph 3.1.4), the TRP issues a compliance certificate in accordance with section 119(4)(b) of the Companies Act in respect of the PSG Group Unbundling and the PSG Group Scheme;
3. by no later than Wednesday, 31 August 2022, to the extent required, the approvals, consents and/or rulings necessary to implement the PSG Group Restructuring be obtained from the JSE and the Competition Authorities, either unconditionally or on terms acceptable to PSG Group;
4. by no later than the date of the General Meeting, a binding public ruling is obtained from SARS dealing with the PSG Group Unbundling on terms and conditions acceptable to PSG Group;
5. to the extent applicable, by no later than Wednesday, 31 August 2022, the Remaining Shareholders in writing waive the requirement for a mandatory offer in terms of

section 123(4) of the Companies Act, pursuant to the PSG Group Scheme, and the TRP grants the required exemption in respect of this requirement;

1. by the date 10 (ten) Business Days following the General Meeting, disqualified person PSG Group Shareholders do not hold more than an additional 10% (in other words, not more than 22.9% in aggregate) of PSG Group Shares in issue (with PSG Group's disqualified person shareholding as at 28 February 2022 and at the Last Practicable Date being approximately 12.9%, comprising the GEPF); and
2. by no later than Wednesday, 31 August 2022, the PSG Group internal restructure steps have become unconditional and are implemented in accordance with their terms.

3.2 The PSG Group Restructuring Conditions in -

1. paragraphs 3.1.3, 3.1.6 and 3.1.8 have been inserted for the benefit of PSG Group, which will be entitled, in its sole discretion, to waive fulfilment of such conditions precedent, in whole or in part; while
2. the remainder of the PSG Group Restructuring Conditions cannot be waived.

3.3 PSG Group may, at any time, extend the date for fulfilment of the PSG Group Restructuring Conditions.

4. INDEPENDENT EXPERT'S OPINION

1. The Independent Board, comprised of independent non-executive Directors of PSG Group, has appointed BDO Corporate Finance Proprietary Limited as independent expert ("Independent Expert") to prepare a report on the PSG Group Restructuring.
2. The Independent Expert has determined that the PSG Group Restructuring is fair and reasonable to Exiting Shareholders, for the reasons and on the basis set out in the Independent Expert's Report, a copy of which is annexed to the Circular. The JSE has agreed to accept the Independent Expert's Report, which has been prepared in accordance with the Companies Regulations, given that the PSG Group Restructuring is an indivisible, inter- conditional transaction.
3. The Independent Board, taking into account the Independent Expert's Report in relation to the PSG Group Restructuring, has considered the terms and conditions of the PSG Group Restructuring, and the members of the Independent Board are unanimously of the opinion that the terms and conditions thereof are fair and reasonable to Exiting Shareholders. Accordingly, they recommend that Exiting Shareholders vote in favour of the resolution to be proposed at the General Meeting relating to the approval of the PSG Group Restructuring.
4. PSG Group Shareholders are referred to the Circular, which contains additional detail regarding the views of the Independent Board.

5. IMPACT ON THE FINANCIAL INFORMATION OF PSG GROUP

1. The Specific Repurchase, if implemented, will be settled in cash and it is anticipated that 136,934,514 PSG Group Shares will be repurchased at a cash Scheme Consideration of R23.00 per share, amounting to an aggregate Scheme Consideration of approximately R3,149m. Should the PSG Group Restructuring proceed and subject to the cash requirements of PSG Group's ongoing operations, PSG Group may be required to draw on facilities to settle the aggregate Scheme Consideration and associated implementation costs, considering that PSG Group's existing cash resources will largely be depleted following payment of the aggregate Scheme Consideration and the associated implementation costs of the PSG Group Restructuring of approximately R465m, calculated as at 28 February 2022.
2. Following the Specific Repurchase, 3,649 treasury shares will remain in the Company's issued share capital.

6. DISTRIBUTION OF THE CIRCULAR AND NOTICE OF GENERAL MEETING

1. As indicated above, the Circular is being distributed to PSG Group Shareholders today, 8 July 2022. The Circular incorporates a notice convening the General Meeting to be held at 10:00 on Wednesday, 10 August 2022, entirely by electronic communication, to consider and, if deemed fit, to pass, with or without modification, the requisite resolutions required for the PSG Group Restructuring and related matters.
2. The Circular is available in English only. Copies may be obtained during normal business hours from the registered office of the Company and from the offices of the Company's sponsor, PSG Capital, from 8 July 2022 until 10 August 2022 (both days inclusive). A copy of the Circular will also be available on the Company's website (https://psggroup.co.za/).