AFROCENTRIC INVESTMENT CORP LIMITED - Second tranche payment for assets acquired from WAD holdings Proprietary Limited

Second tranche payment for assets acquired from WAD holdings Proprietary Limited

AfroCentric Investment Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1988/000570/06)
JSE Code: ACT
ISIN: ZAE000078416
(“AfroCentric” or “the Group”)

SECOND TRANCHE PAYMENT                  FOR    ASSETS     ACQUIRED       FROM     WAD     HOLDINGS
PROPRIETARY LIMITED (“WAD”)

1.   INTRODUCTION

     AfroCentric shareholders (“Shareholders”) are referred to the SENS announcement dated
     30 September 2014 (and using the terms defined therein unless otherwise stated) wherein
     AfroCentric announced the commercial terms for the WAD Acquisitions.

     The consideration for the WAD Acquisitions was to be settled in separate tranches, in the first
     instance, being an aggregate initial fair value consideration of R465.6 million, which was settled
     through the issue of 86.5 million AfroCentric ordinary shares (“AfroCentric Shares”) and R20
     million in cash. The effective date of the transaction was 1 August 2015.

2.   MEASUREMENT OF AND PAYMENT METHOD FOR SECOND TRANCHE PAYMENT

     The commercial terms of the WAD Acquisitions included, inter alia, a reward formula for certain
     performance metrics to be measured on 30 June 2017, including certain profit warranties and
     contractual relationships being in place beyond 30 June 2018.

     Given the measurement of performance for the two year period to 30 June 2017 and in terms of
     the second tranche formula, a further 31 366 977 million AfroCentric Shares are due to be
     issued to WAD by 30 September 2017. Shareholders will note that this contingency was
     reflected and appropriately provided for in the 2016 Audited Annual Financial Statements and
     the 2017 Audited year end results announced on 19 September 2017. WAD requested that in
     lieu of the issue of the 31 366 977 AfroCentric Shares, that they receive this second tranche
     payment in cash. The Board considered the reciprocal implications and the non-dilutionary
     advantage to shareholders and approved an attributable payment of an amount of
     R194 475 257.40 in consideration thereof. It should also be noted that WAD maintains its
     current shareholding of 16.03% in the Group.

     The fulfilment of certain further suspensive conditions applicable for review on 30 June 2018 in
     terms of the WAD Acquisitions, may on fulfilment, trigger a maximum further payment of R80.6
     million subject to fair value adjustments, payable to WAD in AfroCentric Shares or cash as
     determined at the relevant time.
3. CATEGORISATION OF THE WAD ACQUISITIONS

    Shareholders are reminded that the WAD Acquisitions were regarded as a Category 2
    transaction in terms of the JSE Limited Listings Requirements and accordingly the acquisition
    did not require shareholder approval.



Johannesburg
28 September 2017

Sponsor
Sasfin Capital (a member of the Sasfin group)

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