Abridged Pre-listing Statement Rhodes Food Group Holdings Limited (Formerly Rhodes Food Group Holdings Proprietary Limited) (Incorporated in South Africa) (Registration number 2012/074392/06) JSE share code: RFG ISIN: ZAE000191979 (“RFG” or the “Company”) NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO ABRIDGED PRE-LISTING STATEMENT This Abridged Pre-listing Statement relates to the listing of Rhodes Food Group Holdings Limited in the “Food Products” sector of the main board of the JSE with effect from the commencement of business on Thursday, 2 October 2014. The information and defined terms used in this Abridged Pre- listing Statement are as set out in the full Pre-listing Statement issued by RFG on Monday, 15 September 2014. This Abridged Pre-listing Statement does not constitute an offer to the public for the sale of or subscription for, or the solicitation of an offer to buy or subscribe for shares in the Company, but is issued in compliance with the Listings Requirements for the purpose of providing information to the public with regards to RFG. This Abridged Pre-listing Statement highlights selected information from the Pre-listing Statement. It is not complete and does not contain all of the information that readers of the Abridged Pre-listing Statement and/or the Pre-listing Statement should consider before investing in the Ordinary Shares. Investors should read the Pre-listing Statement carefully in its entirety, including the “Risk Factors” section, the financial statements provided and the notes to those financial statements. 1. The Offer The Offer comprises an Offer for Subscription by RFG of new Ordinary Shares to raise R600 million and a concurrent pro rata Offer for Sale of 25% of the existing Ordinary Shares in RFG held by the Selling Shareholders. The Offer will be made, subject to certain conditions, to selected institutional investors in South Africa in terms of section 96(1)(a) of the Companies Act, as well as to selected institutional investors in other jurisdictions. The Offer Shares comprise up to 57 142 857 new Subscription Shares to be issued by the Company and 42 750 000 existing Sale Shares to be sold by the Selling Shareholders, representing an aggregate 44 percent of the total issued share capital and 42 percent of the Fully Diluted Shares of the Company at Listing. Up to a further 9 989 286 Overallotment Shares may be sold by Capitalworks pursuant to a 30-day option to be granted to RMB, as Stabilisation Manager, for the purpose of covering overallotments before the end of the Stabilisation Period. Offer Shares rank pari passu with existing Ordinary Shares in all respects. It is currently estimated that the price at which the Offer Shares will be offered for sale or subscription will be between R10.50 and R13.50 per Offer Share. The JSE has granted the Company a listing in respect of up to 228 142 857 Ordinary Shares in the “Food Products” sector of the main board, under the abbreviated name “RHODES” and share code “RFG”, subject to the JSE’s approval for the Listing not being revoked or withdrawn and the JSE’s spread and free float requirements being attained. 2. Company overview RFG, based in Groot Drakenstein in South Africa's Western Cape Province, is an internationally- recognised food producer offering quality prepared meal solutions in fresh, frozen and long-life formats for distribution in Southern Africa and in selected international markets. The Company has processing and agricultural operations in South Africa and Swaziland and focuses on the "soil to shelf" quality control process which ensures that its products are of the highest standard. The Company's product range comprises canned fruit, jam, vegetable and meat products, chilled ready-made meals, pies, pastries and dairy products. RFG has a growing portfolio of strong brands, including Rhodes, Magpie, Bull Brand, Hazeldene, Portobello and Trout Hall, complemented by several private label product ranges packed for premium domestic and international retailers. In addition, the Company has an exclusive arrangement with Woolworths to provide its ready-made meals on a national basis and to supply Ayrshire dairy products in the Western Cape and Eastern Cape. RFG distributes its diverse range of fresh and canned food products through an extensive and sophisticated distribution network which grants RFG access to a broad range of local and international customers. RFG's business platform integrates key value-added support services, such as quality control, logistics and supply chain management. RFG's market penetration, coupled with its value-added product offering, positions RFG to exploit attractive opportunities for organic and acquisitive growth. The Company’s operations are split into the Regional and International business segments. The Regional Segment, which accounts for approximately 65% of revenue, covers South Africa and other Sub-Saharan countries, including Botswana, Lesotho, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe. Sales in this segment are diversified across the entire product range, with South Africa accounting for the majority of sales. The International Segment exports mainly canned fruit and fruit juice purées and concentrates, with the main export markets being Europe, the Far East, USA, Canada, Australasia, Russia and the Middle East. RFG’s revenue and EBITDA for the nine months ended June 2014 and the 2013 and 2012 financial years are set out below: Nine months to Financial year to September CAGR June 2014 2013 2012 (2011-2013) (R m) (R m) (R m) (%) Revenue 1 770 1 859 1 558 16% EBITDA 195 226(1) 161 49% Note: (1) Adjusted for once-off transaction costs of R23.9 million relating to the group restructuring The Regional Segment is comprised of the Fresh Foods and Long-life Foods Divisions as follows: 2.1 Regional Segment: Fresh Foods Division The Fresh Foods Division produces, processes, distributes and markets a wide range of dairy products, pies and ready-made fresh food items. Ready-made meals RFG supplies the South African retail and catering industry with a diverse range of chilled and frozen ready-made meals. This business unit employs an experienced team of food technologists and chefs to develop the ready-made meals, using carefully selected ingredients and resulting in an end product of the highest international culinary standards. The Company has had exclusive arrangements with Woolworths for its ready-made meals product portfolio on a national basis for over 20 years. The ready-made meals business unit has facilities at RFG’s head office in Groot Drakenstein in the Western Cape and at Aeroton in Gauteng. The facilities produce a range of ready-made meals, pastas, sauces, party foods and pastry-based products in both frozen and chilled formats. RFG has invested in growing capacity and increasing automation, including the establishment of a high-tech, state-of-the-art, purpose-built factory in Aeroton. Continuous product development has extended the range of authentic cuisines, from Italian and Indian ranges to Greek and Traditional meals, amongst others. Pies, pastries and sausage rolls There are three broad channels into which pies and pastries are sold, namely RFG’s Magpie brand (sold to various retailers), Woolworths and Corner Bakery. Products sold include fresh and frozen baked and unbaked pies, pastries and sausage rolls. All of these premium quality products are certified as Halaal. This business unit has its base in Aeroton alongside the ready-made meals operation. RFG has continued to invest in the expansion and automation of the pie manufacturing line to increase capacity and enhance efficiencies. National distribution is enabled through a network of regional depots and distributors. Dairy products This business unit has its base in Groot Drakenstein in the Western Cape, where it operates a dairy processing factory alongside the Rhodes Ayrshire dairy stud farm. The farm is based on 104 hectares of land and houses an award-winning herd of Ayrshire cattle, which is approximately 1 000 head strong. The milk produced at the farm forms the cornerstone of RFG’s dairy base for its production and supply of milk, cream and cheese. Woolworths sources its Ayrshire milk and cream in the Western Cape and Eastern Cape exclusively from RFG. Cheese is supplied as private label to Woolworths and to other retailers under the Company’s own label, Portobello. The award-winning Portobello range includes French-style white mould cheeses and soft and fresh Italian cheeses, as well as certain other unique South African cheeses. 2.2 Regional Segment: Long-life Foods Division The Long-life Foods Division within the Regional Segment comprises of the canned fruit, vegetable, jam and meat business units. General The regional Long-life Foods Division sells fruit, vegetable, jam and meat products under the "Rhodes", "Hazeldene", “Bull Brand”, “Apex” and “Spekenam” brand names to retailers such as Pick n Pay, Spar and Shoprite and various wholesalers. The Division also runs a private label program for many of the national retailers and wholesalers across its range of long-life foods. The Long-life Foods Division has deciduous fruit canning operations in Tulbagh in the Western Cape; citrus, pineapple and jam production facilities in the Malkerns Valley in Swaziland; a meat canning plant in Gauteng; and a vegetable canning plant in Limpopo. The majority of regional branded sales is through the retail sales channel. Management intends to pursue opportunities to increase revenue through wholesale and out of home channels, while also increasing sales into the greater Sub-Saharan African region. Canned fruit products: Tulbagh (Western Cape) In 2010, RFG extended its fruit canning operations by acquiring the Tulbagh properties from Del Monte. This allowed RFG to move its canning operations from Groot Drakenstein to the high-tech canning facility previously owned by the vendor. The facility has maintained its high food safety standards, with annual HACCP, BRC and IFS certifications. This business unit's deciduous fruit range includes canned apricots, peaches, pears, guavas and fruit cocktail. These fruit types are packed as halved, sliced and diced fruit and also packed aseptically as fruit purées. The facility is run by a team of dedicated staff with many years of canning experience. Canned fruit products: Swazican (Swaziland) Swazican, situated in the fertile Malkerns Valley, is Swaziland’s only canning operation. It was established in 1954 when pineapples were first grown commercially in the country. Swazican is a leading producer of processed pineapple and citrus products and remains the primary grower of pineapples in Swaziland. Swazican also produces the Company’s canned and bottled jams and marmalades. The product range comprises canned citrus (orange and grapefruit segments), canned pineapple (slices, pieces and crush), citrus and pineapple juice concentrate and a range of prepared fruit and jelly products packed in plastic cups, as well as assorted jams and marmalades. Canned meat products RFG acquired the Bull Brand business in 2013. Bull Brand is South Africa’s leading producer of quality canned meat products, including corned meat and corned beef. Bull Brand operates out of its central production facility located in Krugersdorp, Gauteng. All Bull Brand products are certified as Halaal. In addition to Bull Brand, other canned meat products are also produced under RFG’s ancillary brands, such as Spekenam's range of “No Pork” canned products and Apex's value for money corned meat brand. Canned vegetable products RFG produces premium quality canned vegetable products, including tomatoes, sweet corn, whole kernel corn, mixed vegetables, baked beans and various derivatives of the aforementioned products combined with spaghetti, chakalaka and curry sauces, amongst others. 2.3 International Segment The International Segment comprises that component of long-life that supplies product to markets outside Sub-Saharan Africa. The product range includes: - canned pineapple and citrus products, including citrus and pineapple juice concentrate; - a range of prepared fruit and jelly products packed in plastic cups, processed at Swazican; and - canned deciduous fruit products and aseptically packed fruit purées, including peach, pear, apricot and fruit cocktail, from the facility in Tulbagh. The International Segment is responsible for supplying: - premium retailers globally with the Rhodes branded and private label products. Customers include retailers such as Tesco, Sainsbury's and Morrisons in the UK, Loblaws in Canada and Woolworths Ltd and Coles in Australia; - branded food companies globally, including Del Monte International, Dole and Nestlè; and - industrial food processors, such as bakeries and fruit juice manufacturers. 3. Key strengths RFG believes that the following strengths contribute to its success and distinguish it from its competitors: - offers a wide product range, including convenient meal solutions in fresh, frozen and long-life formats; - caters for needs across consumer income groups; - has a diversity of revenues, an element of internal hedging and potential to increase global volumes, as a result of its International Segment; - holds number 1 or strong number 2 positions in its long-life categories; - is the exclusive supplier of ready-meals to the category leading retailer, Woolworths; - has trusted and established brands, such as Rhodes, Bull Brand, Hazeldene, Trout Hall and Magpie, across a range of products; - is a significant, long-term supplier of many private label meal solutions, internationally and regionally, for other strongly branded companies; - has world-class production facilities located close to end markets and/or sources of raw materials that are maintained and upgraded with ongoing investment; - continuously innovates, which assists in meeting changing market preferences and creates opportunities for lateral product extension; and - has a long-serving management team with a wealth of experience in growing RFG organically and through acquisitions. 4. Growth strategy and prospects RFG has exciting growth opportunities across a range of its products and activities, including: Long-life meal solutions RFG believes there is an opportunity to manufacture products to fill the gap between ready-made meals and long-life foods with long-life meal solutions. RFG is well placed to exploit these opportunities through leveraging its expertise in both product formats. Packaging innovations RFG’s culture of continuous innovation will continue to offer points-of-difference relative to competing offerings, rather than just price. Growing product range through new product development RFG believes it will be able to expand its product offering in its existing categories and leverage its strong brands. Increasing market penetration Historically, RFG has limited its marketing spend, while still achieving significant market share growth across all major categories. In addition, the Company has a proven track record in acquiring under- performing brands and successfully repositioning them. Furthermore, there is potential for geographic expansion, product extension and entry into new market segments, as has most recently been achieved by the launch of RFG’s honey offering. RFG will continue to use proven methods for increasing volume growth, which include increasing production efficiency, improving logistics and capitalising on under-utilised distribution channels. Africa expansion opportunity There is a significant opportunity for Bull Brand and other RFG brands to expand into selected markets in Africa, starting with South Africa’s neighbouring states and other Sub-Saharan countries. Market penetration for RFG’s canned meat offering is lower than that for the rest of its long-life product range, highlighting the growth potential for Bull Brand. Existing facilities at the Bull Brand factory in Krugersdorp can be scaled up at limited cost. This represents an extremely attractive opportunity for RFG to leverage its brands and existing facilities and benefit from faster growing African countries. Ongoing upgrade of production facilities Projects are already underway to automate production processes further, which will increase efficiency and capacity to support growth. 5. Use of proceeds The net proceeds received by the Company following the issue of the Subscription Shares will be used to: - settle the mezzanine loan facility, amounting to R169 million, and reduce the working capital facility utilisation; - settle R257 million of subordinated funding provided by Capitalworks to facilitate the Group Restructuring and specifically the acquisition by Management of its 29% shareholding in the Company; - invest in capacity expansion; and - provide the Company with greater balance sheet flexibility to accelerate its strategic growth plan. The planned settlement of the bank borrowings and subordinated funding as envisaged above has enabled RFG to renegotiate its banking facilities, which will result in an extension of the term of the debt. Pre-tax cost savings from the settlement, extension and reduction in rates are estimated to be R76 million for the September 2015 financial year. RFG will not receive any proceeds from the sale of the Sale Shares to be sold by the Selling Shareholders or Overallotment Shares, if any, to be sold by Capitalworks. 6. Directors and management The directors of RFG on the Listing Date are set out below: Name (age) Position Nationality Business address Dr. Yvonne Muthien Independent Chairperson South African Pniel Road (57) Groot Drakenstein Bruce Alan Scott CEO/Executive Director South African Pniel Road Henderson (50) Groot Drakenstein Christiaan Cornelius CFO/ Executive Director South African Pniel Road Schoombie (52) Groot Drakenstein Mark Bower (59) Independent Non- South African Pniel Road executive Director Groot Drakenstein Thabo Patrick Leeuw Independent Non- South African Thesele Group (51) executive director 28 Fricker Road Illovo Johannesburg Lehlohonolo Andrew Independent Non- South African 83 Bayhill Avenue Makenete (47) executive Director Eagle Canyon 3 Blueberry Road Honeydew Johannesburg Chad Leonard Smart Non-executive Director South African 25 Farringdon Street (41) London EC4A 4AB United Kingdom Garth John Henry Non-executive Director South African Capitalworks Willis (42) 24 Central Building Corner of Gwen Lane and Fredman Drive Sandton Johannesburg 7. Important dates and times Key action 2014 Opening date of the Offer at 09:00 on Monday 15 September Last date and time for indications of interest for purposes of bookbuilding to be received up until 12:00 on Thursday 25 September Successful applicants advised of allocations on Thursday 25 September Publication date of the final Offer Price and final number of Offer Shares released in the press and on SENS on Friday 26 September Listing Date at 09:00 on Thursday 2 October 8. Copies of the Pre-listing Statement The Pre-listing Statement is only available in English and copies may be viewed on the Company’s website or, by eligible investors, during normal business hours from Monday, 15 September 2014 until Thursday, 25 September 2014 from RFG, RMB and Computershare Investor Services (Proprietary) Limited as follows: RFG RMB Pniel Road 1 Merchant Place Groot Drakenstein Cnr Rivonia Road and Fredman Drive 7680 Sandton 2196 Western Cape Johannesburg South Africa South Africa Computershare Investor Services (Proprietary) Limited Ground Floor 70 Marshall Street Marshalltown 2107 Johannesburg South Africa Groot Drakenstein 15 September 2014 Joint Bookrunners Morgan Stanley & Co. International plc Rand Merchant Bank (a division of FirstRand Bank Limited) Renaissance Securities (Cyprus) Limited Transaction Sponsor and Stabilisation Manager Rand Merchant Bank (a division of FirstRand Bank Limited) Attorneys Webber Wentzel, South African legal advisor to the Company Davis Polk & Wardwell London LLP, U.S. counsel & English legal advisor to the Joint Bookrunners Reporting Accountants and Auditors Deloitte & Touche DISCLAIMER: This abridged pre-listing statement does not constitute an offer of securities for sale in the United States or any other jurisdiction. The securities have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “US Securities Act”) or under the securities legislation of any state or territory or jurisdiction of the United States or any other jurisdiction and may not be offered, sold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any states or other jurisdiction of the United States. There will be no public offering in the United States. RFG is not registered and will not be registered under the US Investment Company Act of 1940, as amended, and related rules. This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. Any proposed listing and distribution of this document and other information in connection with a potential listing may be restricted by law in certain jurisdictions, and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This abridged pre-listing statement does not constitute an offer of securities to the public in the United Kingdom. This communication is directed only at (i) persons who are outside the United Kingdom; or (ii) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (iii) high net worth entities falling within Article 49(2) of the Order; and (iv) other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. Copies of this abridged pre-listing statement are not being made and may not be distributed or sent into the United States, Canada, Australia or Japan or in any other jurisdiction where it is unlawful to do so. This abridged pre-listing statement is not a prospectus and the Offer referred to herein will not be open to the public. This abridged pre-listing statement does not constitute an offer to the public for the sale of or subscription for, or the solicitation of an offer to buy or subscribe for, shares as defined in the Companies Act No. 71 of 2008 (the “Act”) or otherwise, and will not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of the Act. This abridged pre-listing statement may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company’s business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made. Each of the Company, Morgan Stanley & Co. International plc (“Morgan Stanley”), Rand Merchant Bank (a division of FirstRand Bank Limited) (“RMB”), Renaissance Securities (Cyprus) Limited (“Renaissance”) and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward looking statement contained in this abridged pre-listing statement whether as a result of new information, future developments or otherwise. None of Morgan Stanley, RMB, Renaissance or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this abridged pre-listing statement (or whether any information has been omitted from the abridged pre- listing statement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the abridged pre-listing statement or its contents or otherwise arising in connection therewith. Each of Morgan Stanley, RMB and Renaissance is acting exclusively for RFG and no-one else in connection with the Offer. They will not regard any other person as their respective clients in relation to the Offer and will not be responsible to anyone other than RFG for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer, the contents of this abridged pre-listing statement or any transaction, arrangement or other matter referred to herein. In connection with the Offer, each of Morgan Stanley, RMB, Renaissance and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such shares and other securities of RFG or related investments in connection with the Offer or otherwise. Accordingly, references in the Pre-listing Statement to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by any of Morgan Stanley, RMB and Renaissance and any of their respective affiliates acting as investors for their own accounts. In addition, Morgan Stanley, RMB and Renaissance may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of shares. None of Morgan Stanley, RMB and Renaissance nor any of their respective affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. Date: 15/09/2014 08:00:00 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 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, information disseminated through SENS.