TASTE HOLDINGS LIMITED - Taste Raises R95 Million For Further Expansion

Taste Raises R95 Million For Further Expansion

TASTE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2000/002239/06)
Share code: TAS ISIN: ZAE000081162
(“Taste” or “the Company” or “the Group”)


TASTE RAISES R95 MILLION FOR FURTHER EXPANSION


1. INTRODUCTION
 Taste is pleased to announce that it has successfully raised R94 775 007.65 through the issue of 31 073 773
 Taste shares (“subscription shares”) at an issue price of R3.05 per share (“subscription price”) partially by way
 of a general issue of shares for cash and by way of a specific issue of shares for cash, the details of which are
 set out below.

2. USE OF FUNDS
    2.1. The acquisition of Arthur Kaplan in November 2014 was settled from cash reserves predominantly
         earmarked for the Domino’s Pizza conversion and rollout. These funds will replenish the total cash
         used for this acquisition. Additionally, the performance of Arthur Kaplan since the acquisition has
         exceeded expectations to the extent that the Group expects to pay an additional R10 million to R20
         million in terms of the agreed ‘earn out’ as per the Purchase and Sale agreement.
    2.2. Since opening the first six Domino’s Pizza outlets between October and December 2014, the Group
         has been encouraged by the positive customer reaction and sales to the extent that whereas only six
         corporate owned stores were planned for the 2015 year, the Group now plans to have approximately
         25 corporate owned outlets by the end of August 2015, in addition to at least 30 franchised stores by
         the same date. A portion of these funds will therefore be used to partly fund the additional corporate
         owned outlets.
    2.3. The better than expected sales from both new stores and converted stores has also resulted in the
         dough production facility in Cape Town being established earlier than originally planned. The
         production facility located in Midrand started producing Domino’s Pizza dough balls in April 2015 and
         the Group expects that dough balls will be produced in the Cape Town facility by June 2015. This
         earlier than planned capital expenditure will also be partly funded from these funds.


3. THE GENERAL ISSUE
 Taste has raised capital of approximately R69.8 million through the issue of 22 877 051 subscription shares to
 various new and existing public investors in terms of a general issue for cash in accordance with the general
 authority granted by its shareholders at the annual general meeting on 29 July 2014 (“general issue”). The
 shares will be issued and listed on or about 24 April 2015 at the subscription price representing a discount of
 5.21% to the volume weighted average traded price of Taste shares over the 30 business days up to and
 including 17 April 2015, the date the board of directors approved the issue of the subscription shares.

4. THE SPECIFIC ISSUE
 The board of directors of Taste has agreed to issue 8 196 722 subscription shares to Brimstone Investment
 Corporation Limited (“Brimstone”) (or one of its wholly-owned subsidiaries), at the subscription price on the
 terms and conditions set out below, thereby raising capital of approximately R25 million (“specific issue”). As
 Brimstone currently holds more than 10% of the issued share capital of Taste it is classified as a related party
 in terms of section 10.1(b)(i) of the Listings Requirements of the JSE Limited (“JSE”). The specific issue
 therefore requires the passing of an ordinary resolution of Taste shareholders (excluding Brimstone and its
 associates) by achieving a 75% majority of the votes cast at a general meeting of shareholders.

 The subscription price represents a discount of 5.21% to the volume weighted average traded price of Taste
 shares over the 30 business days prior to 17 April 2015, the date on which the specific issue was agreed to in
 writing by Taste and Brimstone.

 4.1. RATIONALE FOR THE SPECIFIC ISSUE
      Brimstone is a JSE listed black controlled and managed investment company with a market
      capitalisation of approximately R4.5 billion, employing approximately 3 400 employees in its subsidiaries
      and in excess of 24 000 employees in its associates.

      Having initially acquired shares in Taste in February 2012, Brimstone currently owns approximately
      14.2% of the share capital of Taste, which shareholding will increase to approximately 15.5% after the
      issue of the subscription shares. The specific issue will therefore enhance Taste’s BEE credentials and
      shareholding, which is aligned with Taste’s stated intent.

      Brimstone seeks to achieve above average returns for its shareholders by investing in wealth creating
      businesses and entering into strategic alliances to which it contributes capital, innovative ideas,
      management expertise, impeccable empowerment credentials and a value driven corporate identity.
      Brimstone is well capitalised, has access to further capital and has the team and experience to continue
      adding value to Taste.

 4.2. CONDITIONS PRECEDENT AND DOCUMENTATION
      The specific issue is subject to:
      - the passing of an ordinary resolution of Taste shareholders (excluding Brimstone and its associates)
        by achieving a 75% majority of the votes cast at a general meeting of shareholders convened to
        specifically authorise the Company to issue shares for cash to Brimstone (“the proposed resolution”)
        in terms of the Listings Requirements of the JSE; and
      - any other applicable regulatory approvals, including the approval of the specific issue in terms of the
        Listings Requirements of the JSE.

A circular to Taste shareholders setting out full details of the specific issue and incorporating a notice
convening a general meeting of Taste shareholders to consider and approve the proposed resolution, will be
distributed to shareholders in due course.

Johannesburg
21 April 2015

Book Runner and Sponsor
Merchantec Capital

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