LABAT AFRICA LIMITED - Detailed Cautionary Announcement Relating to the Potential Acquisition of Centenary Tanker Hire Proprietary Limited

Detailed Cautionary Announcement Relating to the Potential Acquisition of Centenary Tanker Hire Proprietary Limited

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


DETAILED CAUTIONARY ANNOUNCEMENT RELATING TO THE POTENTIAL ACQUISITION OF CENTENARY
TANKER HIRE PROPRIETARY LIMITED


1.    Background
      Shareholders are advised that Labat has agreed high level terms with the shareholder of Centenary
      Tanker Hire Proprietary Limited (“Centenary”), in terms of which Labat will acquire the business and
      assets or the issued shares of Centenary, as the case may be (“the Acquisition”) in return for a cash
      payment of R60 million paid within 21 business days after the suspensive conditions have been fulfilled
      and a second cash payment of R5 million one calendar year after the first cash payment, (“the
      Purchase Consideration”). The shareholder of Centenary is The Centenary Group Trust owning 100%
      of the issued shares of Centenary and represented by Mr Steve Boere.

2.    Description of Centenary Transportation
      Centenary operates in the liquids arena of the logistics sector.

3.    Rationale for the Acquisition
      The Acquisition will expand on the existing logistics business of Labat and assist Labat in its quest to
      become a major player in the logistics and distribution business.

4.    Suspensive conditions
      -    The parties executing a sale agreement in respect of Centenary and the agreement becoming
           unconditional. The sale agreement will contain the normal warranties and indemnities
           associated with a transaction of this nature;
      -    Labat advising Centenary that it is satisfied with the outcome of the required due diligence
           investigation;
      -    Mr Steve Boere continue to operate Centenary and continue to be actively involved in its
           expansion strategy and the retainment of Centenary key management on similar terms and
           conditions of employment as is the case at present;
      -    If material third party, material supply or other service provider contracts contain change of
           control provisions, consent to such change being obtained from the third parties;
      -    Direct transfer of guarantees and suretyships provided by Centenary in connection with the
           running of its business be transferred and ceded to Labat; and
      -    Final approval of the Acquisition by the Board of Directors and shareholders of Labat and
           Centenary being obtained;
      -    Any regulatory approvals to the extent required, including approval by Competition
           Commission and JSE to the extent necessary.

5.    Classification of the transaction
      The Acquisition is classified as a Category 1 transaction in terms of the JSE Listings Requirements and
      shareholder approval of the Acquisition will accordingly be required. Centenary and its associates
      are not related parties to Labat.

     The transaction will not result in a change in control of Labat nor a change in the control of the board
     of Labat or in the nature of the business of Labat and therefore does not meet the definition of a
     Reverse Takeover as defined in the JSE Listings Requirements.

6.   Financial Information
     As per the formally prepared but unaudited management reports of Centenary for the year ended
     30 June 2017, the salient financial information was as follows:

     - Net asset value of R20 317 190;
     - Turnover of R39 118 769; and
     - Profit after taxation of R10 551 711.

     Post the implementation of the Acquisition, Labat will participate in 100% of the earnings and net
     asset value of Centenary.

     The management report information was prepared in accordance with the International Financial
     Reporting Standard for Small to Medium-sized Entities.

7.   Renewal of cautionary announcement
     Due to the suspensive conditions, which include the execution of formal legal agreements and a
     due diligence, shareholders are advised to continue to exercise caution until a further
     announcement is made. In addition, Labat remains in discussions relating to other acquisitions,
     which, if successfully concluded, may have a material effect on the price of the Company’s
     securities.

     Accordingly, shareholders are advised to exercise caution when dealing in the securities of the
     Company until further announcements are made.

Johannesburg
15 June 2018

Sponsor
Arbor Capital Sponsors Proprietary Limited

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