PSG/PSL - RESTRUCTURING OF PSL'S CAPITAL BY WAY OF A RIGHTS OFFER

PSG GROUP LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 70/08484/06)
("PSG")
PSG FINANCIAL SERVICES LIMITED
(FORMERLY SERVGRO INTERNATIONAL LIMITED)
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 03/00478/06)
("PSL")

RESTRUCTURING OF PSL'S CAPITAL BY WAY OF A RIGHTS OFFER
1. INTRODUCTION

NEDCOR INVESTMENT BANK LIMITED IS AUTHORISED TO ANNOUNCE THAT, SUBJECT TO THE
CONDITIONS PRECEDENT SET OUT BELOW, THE BOARD OF DIRECTORS OF PSL HAS RESOLVED,
BY WAY OF A RIGHTS OFFER OF NEW PSL ORDINARY SHARES OF 8 CENTS EACH, TO:
1.1 PROCURE THE CONVERSION OF ITS EXISTING R350 MILLION LOAN FROM PSG INTO
CAPITAL; AND

1.2 RAISE ADDITIONAL CAPITAL OF R140 MILLION ("THE RIGHTS OFFER").
2. PURPOSE OF THE RIGHTS OFFER

2.1 PURSUANT TO THE TRANSACTION IN TERMS OF WHICH PSG SOLD ITS ENTIRE BUSINESS
AS A GOING CONCERN TO PSL (THEN SERVGRO INTERNATIONAL LIMITED), MORE DETAILS OF
WHICH WERE PUBLISHED IN A CIRCULAR DATED 10 MARCH 1998, PSL BECAME A SUBSIDIARY
OF PSG. PSG HAS ONLY TWO ASSETS:
- 71% OF THE ISSUED SHARE CAPITAL OF PSL; AND

- A LOAN OF APPROXIMATELY R350 MILLION TO PSL ON WHICH IT RECEIVES COMMERCIAL
RATES OF INTEREST.

2.2 SINCE PSG HAS BY AGREEMENT UNDERTAKEN TO CONDUCT ALL EXPANSION

OPPORTUNITIES IN THE PSG GROUP THROUGH PSL, THE BOARDS OF PSG AND PSL HAVE
RESOLVED TO CONVERT THE LOAN CAPITAL REFERRED TO IN 2.1 ABOVE INTO PERMANENT
SHARE CAPITAL IN PSL, THEREBY STRENGTHENING PSL'S CAPITALISATION.

2.3 THE R350 MILLION LENT BY PSG TO PSL HAS ALREADY BEEN EMPLOYED IN THE
EXISTING OPERATIONS OF PSL. THE ADDITIONAL FUNDS RAISED WILL PROVIDE PSL WITH
PERMANENT CAPITAL IN ORDER TO FINANCE ITS INTERNATIONAL EXPANSION AND

STRENGTHEN THE CAPITAL BASES OF THE EXISTING OPERATIONS IN ORDER TO PROVIDE
FURTHER EXPANSION.
2.4 TO ATTRACT FURTHER FUNDS OF R140 MILLION.
3. COMMITMENTS AND UNDERWRITING

PSG HAS UNDERTAKEN, IN ACCORDANCE WITH THE ABOVEMENTIONED RATIONALE, TO FOLLOW
THE RIGHTS ACCRUING TO IT IN TERMS OF THE RIGHTS OFFER AND WILL SUBSCRIBE FOR
NEW PSL SHARES IN THE AMOUNT OF R350 MILLION ("THE PSG COMMITMENT"). THE RIGHTS
OFFER HAS NOT BEEN UNDERWRITTEN. THE MINIMUM SUBSCRIPTION IN TERMS OF THE
RIGHTS OFFER WILL BE AN AMOUNT EQUAL TO THE PSG COMMITMENT.
4. NOTICE OF LAST DAY TO REGISTER

PSL SHAREHOLDERS ARE ADVISED THAT THE LAST DAY TO BE REGISTERED TO PARTICIPATE
IN THE RIGHTS OFFER IS THE CLOSE OF BUSINESS ON FRIDAY, 16 OCTOBER 1998.
5. CONDITIONS PRECEDENT
THE RIGHTS OFFER IS CONDITIONAL, INTER ALIA, ON:

(I) THE REGISTRATION BY THE REGISTRAR OF COMPANIES OF THE RIGHTS OFFER
DOCUMENTS; AND

(II) THE GRANTING BY THE JSE OF LISTINGS IN RESPECT OF:
- THE LETTERS OF ALLOCATION; AND

- THE NEW PSL SHARES TO BE ISSUED IN TERMS OF THE RIGHTS OFFER.
6. TERMS AND CONDITIONS

THE TERMS AND SALIENT DATES OF THE RIGHTS OFFER WILL BE ANNOUNCED IN THE PRESS
IN DUE COURSE.
STELLENBOSCH
2 OCTOBER 1998