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Announcement regarding Capitalworks’ shareholding in RFG and dealings in securities by associates of directors

RFG Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2012/074392/06)
Share code: RFG
ISIN: ZAE000191979
("RFG")


ANNOUNCEMENT REGARDING CAPITALWORKS’ SHAREHOLDING IN RFG AND DEALINGS IN
SECURITIES BY ASSOCIATES OF DIRECTORS


1. INTRODUCTION
   Capitalworks Private Equity Advisor Proprietary Limited, on behalf of funds that it advises or that
   co-invests alongside such funds ("Capitalworks"), has been a significant, long-term investment
   partner of RFG, pre-dating RFG's listing on the exchange operated by the JSE Limited ("JSE") in
   2014 when Capitalworks, through its related (controlled) entities, retained a c.40% shareholding in
   RFG following RFG's initial public offering. The related entities through which Capitalworks holds
   such a controlling interest in RFG are South African en-commandite partnerships which have
   reached the end of their tenure, thus necessitating a restructure of Capitalworks' shareholding in
   RFG.

   As RFG shareholders ("Shareholders") may be aware, Capitalworks' shareholding in RFG has, to
   date, been held by and through:

   (i)     Capitalworks Private Equity GP Proprietary Limited ("Capitalworks PE GP"), as general
           partner ("GP") of Capitalworks Rhodes Food Investment Partnership ("Capitalworks
           RFIP"); and
   (ii)    South African Investment GP Trust ("Capitalworks Trust GP"), as GP of Capitalworks
           Rhodes Food Investment Partnership II ("Capitalworks RFIP II"), South African
           Investment Partnership ("SAIP") and South African Investment Partnership II ("SAIP II"),

   (Capitalworks RFIP, Capitalworks RFIP II, SAIP and SAIP II together referred to as the
   "Capitalworks RFG Funds"), with Capitalworks PE GP and Capitalworks Trust GP being related
   parties of Capitalworks in which effective control of the RFG ordinary shares ("Shares") vest.

   Accordingly, Shareholders are advised that Capitalworks has restructured its shareholding in RFG.
   To this end, the Capitalworks RFG Funds have disposed of all Shares held by them, equating to
   approximately 37.7% of the total issued ordinary share capital of RFG (being 98 677 102 Shares in
   aggregate) (the "Capitalworks Disposal"). In addition, associates of certain members of the RFG
   executive management team, namely Deputy CEO Pieter Hanekom and Chief Financial Officer
   Tiaan Schoombie (together, "Participating Management Team") have also disposed of an
   aggregate 1 305 903 Shares equating to approximately 0.5% of the total issued ordinary share
   capital of RFG (the "Participating Management Team Disposal").
  
   The Shares disposed of as part of the Capitalworks Disposal and the Participating Management
   Team Disposal have been acquired by and consolidated into two newly established Capitalworks
   funds (South African en-commandite partnerships), being:

  (i)     RFG Holdings Partnership ("RFG Holdings Partnership") of which RFG Holdings GP
          Partnership (another newly established South African en-commandite partnerships of
          which Capitalworks Trust GP is the GP) is the GP; and
  (ii)    Capitalworks RFG Partnership ("CW RFG Partnership") of which Capitalworks PE GP is
          the GP,

  (together, the "Capitalworks Acquisition").

  The restructure of Capitalworks' shareholding in RFG does not alter the existing Capitalworks
  control structure in RFG, which remains in place and will continue through the two current
  Capitalworks GPs (being Capitalworks PE GP and Capitalworks Trust GP).

2. BACKGROUND AND RATIONALE
   Founded in 2006, Capitalworks is a leading independent alternative asset management firm,
   providing investment access and specialist solutions to its investors across a wide range of
   industries and investment themes in global emerging markets. Capitalworks, through Capitalworks
   PE GP and the Capitalworks Trust GP, as GPs of the Capitalworks RFG Funds, has been a long-
   standing and supportive shareholder of RFG. As Capitalworks Fund I (being a fund comprising of
   Capitalworks Private Equity Fund L.P., represented by Capitalworks International Equity Partners
   GP Limited as its GP, and Capitalworks Private Equity Partnership, represented by Capitalworks
   Private Equity GP Proprietary Limited as its GP) ("Capitalworks Fund I") and the Capitalworks
   RFG Funds approach the end of their mandated fund lives and are therefore required to exit their
   investment in RFG, the Capitalworks Disposal and simultaneous Capitalworks Acquisition will allow
   Capitalworks to remain a major investor in RFG.

   Capitalworks remains fully supportive of RFG and its management team and believes that RFG
   provides Capitalworks with a compelling investment opportunity given that:
  -     RFG is a leading African food producer with a growing portfolio of market leading brands which
        is complemented by its positioning in the private label space;
  -     RFG has a diverse portfolio of products, serving a wide range of consumers, which allows for
        both resilience and growth;
  -     RFG has an experienced management team to continue to lead RFG in the next phase of its
        growth;
  -     RFG has a significant asset base and distribution network to support the next phase of its
        growth; and
  -     Capitalworks believes that RFG is well positioned as a platform for continued growth in South
        Africa and the rest of Africa.

3. RFG MANAGEMENT PARTICIPATION IN RFG HOLDINGS PARTNERSHIP AND CW RFG
   PARTNERSHIP
   The Participating Management Team will indirectly (through RFG Holdings Partnership) reinvest
   the net proceeds received from the Participating Management Team Disposal into the CW RFG
   Partnership and, together with Chief Executive Officer Bruce Henderson, will contribute a further
   R20 million of fresh capital to the new Capitalworks fund structure.

4. DEALINGS IN SECURITIES BY DIRECTORS AND ASSOCIATES OF DIRECTORS
   In compliance with the Listings Requirements of the JSE, the following dealings in Shares by
   directors and associates of directors pursuant to the Capitalworks Disposal, the Participating
   Management Team Disposal and the Capitalworks Acquisition is hereby disclosed as follows:

   Capitalworks Disposal:

   Associates’ dealings
   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks PE GP, as GP of Capitalworks RFIP
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks PE GP, as GP of Capitalworks RFIP and have
                                         an indirect economic interest in RFG by way of a carried
                                         interest in relation to the investments held in RFG by
                                         Capitalworks PE GP, as GP of Capitalworks RFIP
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 59 692 656
   Disposal price per security:          R12.50
   Total value of transaction:           R746 158 200
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing 
   

   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks Trust GP, as GP of Capitalworks RFIP II
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks Trust GP, as GP of Capitalworks RFIP II and
                                         have an indirect economic interest in RFG by way of a
                                         carried interest in relation to the investments held in RFG by
                                         Capitalworks Trust GP, as GP of Capitalworks RFIP II
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 4 851 260
   Disposal price per security:          R12.50
   Total value of transaction:           R60 640 750
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing   

   
   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks Trust GP, as GP of SAIP
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks Trust GP, as GP of SAIP and have an indirect
                                         economic interest in RFG by way of a carried interest in
                                         relation to the investments held in RFG by Capitalworks
                                         Trust GP, as GP of SAIP
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 8 904 940
   Disposal price per security:          R12.50
   Total value of transaction:           R111 311 750
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks Trust GP, as GP of SAIP II
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks Trust GP, as GP of SAIP II and have an
                                         indirect economic interest in RFG by way of a carried
                                         interest in relation to the investments held in RFG by
                                         Capitalworks Trust GP, as GP of SAIP II
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 25 228 246
   Disposal price per security:          R12.50
   Total value of transaction:           R315 353 075
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Participating Management Team Disposal:

   Name of director:                     Tiaan Schoombie
   Company:                              RFG Holdings Limited
   Name of associate:                    Schoombies Investments Proprietary Limited
   Relationship of associate to          Tiaan Schoombie is a trustee and beneficiary of the sole
   director:                             shareholder of Schoombies Investments Proprietary Limited
                                         and a director of the company
   Date of transaction:                  26 March 2021
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Number of securities:                 1 000 000
   Disposal price per security:          R12.50
   Total value of transaction:           R12 500 000
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Name of director:                     Pieter Hanekom
   Company:                              RFG Holdings Limited
   Name of associate:                    Relta 38 Proprietary Limited
   Relationship of associate to          Pieter Hanekom is the sole director of, and through a family
   director:                             trust controls the majority of the voting rights in, Relta 38
                                         Proprietary Limited
   Date of transaction:                  26 March 2021
   Nature of transaction:                Off market disposal of securities
   Class of securities:                  Ordinary shares
   Number of securities:                 305 903
   Disposal price per security:          R12.50
   Total value of transaction:           R3 823 788
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Capitalworks Acquisition:

   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks PE GP, as GP of CW RFG Partnership
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks PE GP, as GP of CW RFG Partnership and
                                         have an indirect economic interest in RFG by way of a
                                         carried interest in relation to the investments held in RFG by
                                         Capitalworks PE GP, as GP of CW RFG Partnership
   Nature of transaction:                Off market purchase of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 97 503 005
   Purchase price per                    R12.50
   security:
   Total value of transaction:           R1 218 787 562.50
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks Trust GP, as GP of RFG Holdings GP
                                         Partnership (which, in turn, acts as GP for RFG Holdings
                                         Partnership)
   Relationship of associate to          Garth Willis and Chad Smart are indirect controlling
   directors:                            shareholders and directors within the control structure of
                                         Capitalworks Trust GP, as GP of RFG Holdings GP
                                         Partnership (which, in turn, acts as GP for RFG Holdings
                                         Partnership) and have an indirect economic interest in RFG
                                         by way of a carried interest in relation to the investments
                                         held in RFG by Capitalworks Trust GP, as GP of RFG
                                         Holdings GP Partnership (as GP for RFG Holdings
                                         Partnership)
   Nature of transaction:                Off market purchase of securities
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities:                 2 480 000
   Purchase price per                    R12.50
   security:
   Total value of transaction:           R31 000 000
   Nature of interest:                   Indirect beneficial
   Clearance obtained:                   Not required – associate dealing


   Shareholders are further advised that an associate of directors Garth Willis and Chad Smart has entered
   into a security (pledge and cession) arrangement in respect of RFG Shares:

   Name of directors:                    Garth Willis and Chad Smart
   Company:                              RFG Holdings Limited
   Name of associate:                    Capitalworks PE GP, as GP of CW RFG Partnership
   Relationship of associate             Garth Willis and Chad Smart are indirect controlling
   to directors:                         shareholders and directors within the control structure of
                                         Capitalworks PE GP, as GP of CW RFG Partnership and
                                         have an indirect economic interest in RFG by way of a
                                         carried interest in relation to the investments held in RFG by
                                         Capitalworks PE GP, as GP of CW RFG Partnership
   Nature of transaction:                Off-market pledge and cession in securitatem debiti of
                                         Shares as security for financial obligations of Capitalworks
                                         PE GP, as GP of CW RFG Partnership, in favour of Rand
                                         Merchant Bank (A division of FirstRand Bank Limited)
                                         ("RMB")
   Class of securities:                  Ordinary shares
   Date of transaction:                  26 March 2021
   Number of securities                  97 503 005
   pledged:
   Deemed value of securities            R1 218 787 562.50
   based on prevailing market
   price:
   Nature of interest:                   Indirect beneficial
   Nature, term and amount of            (i)   Guarantee for existing Capitalworks Fund I debt to
   financial obligation:                       RMB; due 23 April 2021 - R57 041 214; and
                                         (ii)  Term loan facility to be provided by RMB; bridge
                                               portion - R71 928 257; balance repayable in 5 years -
                                               R375 011 558


Groot Drakenstein
26 March 2021

Sponsor to RFG
Rand Merchant Bank (A division of FirstRand Bank Limited)

Financial and transaction adviser to Capitalworks
Rand Merchant Bank (A division of FirstRand Bank Limited)

Legal adviser to Capitalworks
Webber Wentzel

Date: 26-03-2021 05:23:00

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