LABAT AFRICA LIMITED - Proposed Acquisition of Cannabis Cultivation Operation, Ext of Bookbuild , Update on Force Fuel Bus Rescue & Renewal

Proposed Acquisition of Cannabis Cultivation Operation, Ext of Bookbuild , Update on Force Fuel Bus Rescue & Renewal

LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
(“Labat Africa” or “the Company”)
ISIN Code: ZAE 000018354 Share code: LAB


PROPOSED ACQUISITION OF A SOUTH AFRICAN CANNABIS CULTIVATION OPERATION,
EXTENSION OF BOOKBUILD CLOSING DATE, UPDATE ON THE FORCE FUEL (PTY) LTD AND
FORCE FUEL PROPERTIES (PTY) LTD BUSINESS RESCUE PROCEEDINGS AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT



1     PROPOSED ACQUISITION OF LICENSED CANNABIS CULTIVATION OPERATION IN SOUTH
      AFRICA

      Shareholders are advised that Labat Africa has entered into negotiations which, if
      successfully concluded, will result in it acquiring a South African Health Professionals
      Regulatory Authority (SAHPRA) licensed cannabis cultivation group based in the
      Eastern Cape (“proposed acquisition”). The Company has been granted a 60-day
      exclusivity period to conclude a due diligence investigation on the proposed
      acquisition, which due diligence investigation has commenced. Shareholders are
      cautioned that if the Company is satisfied with the outcome of the due diligence
      investigation and the proposed acquisition is proceeded with, it may have a material
      effect on the price of the Company’s securities.


2.    EXTENSION OF BOOKBUILD AND DATES APPLICABLE TO THE SUBSCRIPTION OF SHARES BY
      VERITYHURST (PTY) LTD (“VERITYHURST”)

      Shareholders are referred to the announcements released on the Stock Exchange
      News Service (“SENS”) on 5 May 2020 relating to the Company’s intention to raise up
      to R112 million through the issue of shares under the Company’s existing General
      Authority to issue share for cash (“Bookbuild”) and 26 June 2020 in terms of which they
      were advised the Company has entered into a share subscription agreement with
      Verityhurst (“Verityhurst Subscription”) in terms of which Verityhurst has agreed to
      subscribe for up to 70 000 000 ordinary shares in Labat (“Subscription Shares”) for cash
      in two separate and divisible tranches.

      Shareholders are advised that a portion of the anticipated funds were received during
      August 2020 resulting in the issue of 6 000 000 Subscription Shares. The roadshow is,
      however, gaining traction, albeit in a difficult market and the Board has accordingly
      elected to extend the date of the Bookbuild to 31 October 2020 and the closing dates
      for the two tranches of the Verityhurst Subscription to 30 September 2020 and
      31 October 2020 respectively.


3.   ANTICIPATED TRANSACTION TO DISPOSE OF FORCE FUEL AND FORCE FUEL PROPERTIES

     Shareholders are referred to the announcement released on SENS on 30 July 2020
     advising affected persons of the approval of the Force Fuel (Pty) Ltd and Force Fuel
     Properties Pty) Ltd (together, “the companies”) business rescue plans (together, “the
     Business Rescue Plans), which Business Rescue Plans provide for a bidding process by
     which prospective investors may make an offer for the companies. Shareholders are
     advised that in accordance with the parameters for the bidding process, the
     successful bid is expected to, at a minimum, result in a Category 2 disposal transaction
     being concluded by the Company.

     Further details of the anticipated disposal including the final terms thereof, will be
     announced once the successful bid has been approved.


4.   RENEWAL OF CAUTIONARY ANNOUNCEMENTS
     Shareholders are referred to item 2 above and the various cautionary announcements
     published on SENS, the last of which was dated 30 July 2020, and are advised to
     continue exercising caution when trading in the Company’s shares until such time as
     further announcements in respect of the above corporate actions are made.


Johannesburg
8 September 2020

Sponsor
AcaciaCap Advisors

Date: 08-09-2020 11:47:00
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