GLOBAL ASSET MANAGEMENT LTD - Acquisition of 50% interest in Energon SA Proprietary Limited (Energon)

Acquisition of 50% interest in Energon SA Proprietary Limited (“Energon”)

GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
("Global" or “the company”)
ISIN Code: ZAE 000173498        Share code: GAM


ACQUISITION OF 50% INTEREST IN ENERGON SA PROPRIETARY LIMITED (“ENERGON”)


1. INTRODUCTION
   Shareholders are advised that GAM New Energy Proprietary Limited (“GAM New Energy”), a
   wholly owned subsidiary of Global, has acquired 500 ordinary shares (50.0%) in
   Energon, from Inshare Asset Finance Green Technologies Proprietary Limited (“IAF
   Green”), the vendor, a wholly owned subsidiary of Inshare Asset Finance Holdings
   Proprietary Limited (“IAFH”), for an acquisition price of R400 000 (“acquisition”).

  IFAH is a subsidiary of the holding company of Global and thus this transaction is a
  related party transaction as defined in the JSE Listings Requirements for companies
  listed on the Alternative Exchange and requires announcement.     As the acquisition
  consideration is less than 10% (i.e. 0.4164%) of Global’s market capitalisation,
  neither a fairness opinion nor shareholder approval of the acquisition is required.
  Interested directors declared their interest and were recused from the decision to
  acquire the 50% interest in Energon.

  GAM New Energy is acquiring 50% of Energon for R400 000, which consideration will be
  settled by way of an increase in the loan account with Inshare Proprietary Limited,
  the holding company of both Global and IAFH. The remaining 50% in Energon is held by
  Stone Group Energy Solutions Proprietary Limited.

  The effective date of the acquisition is 01 March 2014. Energon will be accounted for
  as a subsidiary of Global and Global will ensure that the provisions of Energon’s
  Memorandum of Incorporation will not frustrate Global’s compliance in any way with, or
  relieve its requirements to comply, with its obligations in terms of the JSE Listings
  Requirements.

2. BACKGROUND INFORMATION ON ENERGON

  Energon develops cost savings and sustainability programs in the energy sector that
  improve the total performance for customers.    Energon is an energy services company
  with a business unit dedicated to helping customers become more energy efficient and
  work with customers to improve their energy efficiency and find ways to use renewable
  power to provide significant energy and cost savings.

3. RATIONALE FOR THE ACQUISITION

  The Energon business model provides customers with an Integrated Energy Management
  system which aligns perfectly with the GAM New Energy strategic value chain. Energon
  has demonstrated promising growth prospects in its chosen market segment, having
  recently secured a number of blue chip clients.

  Global has recently commenced a funding business called Energy Efficiency Company
  Proprietary Limited, which has provided funding to the corporate customers of various
  energy services companies, which includes customers of Energon.     The acquisition of
  the 50% shareholding is regarded as both synergistic and strategic for the Global
  group and is expected to enhance returns to shareholders in due course.

4. CONDITIONS PRECEDENT AND WARRANTIES

  The acquisition is not subject to any suspensive conditions.

5. FINANCIAL INFORMATION AND PRO FORMA EFFECTS

  For the year ended 30 November 2013, Energon incurred a loss of R203 725 and the net
  asset value at 30 November 2013 was R97 275.     As at the effective date of 1 March
  2014, as per the management accounts, Energon reflected profit before taxation of
  R651 675 and a net asset value of approximately R748 950. No goodwill will arise on
  acquisition due to the principles of common control, which would result in a reduction
  in retained income of approximately R25 525 as at 1 March 2014.
  The acquisition    has no significant effect (less than 3% as per the JSE Listings
  Requirements) on    the value of the net asset value or net tangible asset value per
  share nor on the   earnings and headline earnings per share and thus presentation of pro
  formal financial   effects of the acquisition is not required.

Johannesburg
27 August 2014

Designated Advisor
Arcay Moela Sponsors Proprietary Limited

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