GLOBAL ASSET MANAGEMENT LIMITED - Issue of shares for cash by an unlisted subsidiary of Global and renewal of cautionary announcement

Issue of shares for cash by an unlisted subsidiary of Global and renewal of cautionary announcement

GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
Share Code: GAM ISIN: ZAE000173498
("Global")


ISSUE OF SHARES FOR CASH BY AN UNLISTED SUBSIDIARY OF GLOBAL TO FINANCE THE PROPOSED
PLASTIC-TO-FUEL CONVERSION PLANT AND RENEWAL OF CAUTIONARY ANNOUNCEMENT


1.     Introduction
       Shareholders are referred to the announcement released on SENS on 1 August 2014, relating
       to the receipt by Global of a firm letter of intent from Futuregrowth Asset Management (Pty)
       Ltd, acting as an agent on behalf of funds under management (“Futuregrowth”) to act as an
       investment partner for its newly formed subsidiary Plastic Green Energy (Pty) Ltd (“PGE”) which
       subsidiary will house the company’s first commercial plastic-to-fuel conversion plant (“the
       Project”).

       The board of Global is pleased to advise that a subscription agreement providing for the
       subscription of shares in PGE by Futuregrowth and Earthwise Energy Holdings (Pty) Ltd
       (“EWEH”), a 95.25% subsidiary within the Global group of companies (“the Parties”), has been
       concluded (“the Transaction”).

2.     The Transaction
2.1    Introduction and Rationale
       In line with its medium term strategy at the time of its listing on the JSE and following the
       successful establishment of its first rubber to waste pilot plant, Global is focusing on the launch
       of its renewable and clean energy businesses. Utilising the proprietary technology developed
       by EWEH, PGE will convert waste plastic into liquid fuel aimed at the industrial fuel oil market.

2.2    Terms of the Agreement
       Futuregrowth and Global have agreed to advance equity funding to PGE and Futuregrowth
       will accordingly subscribe for shares in the issued share capital of PGE in two separate
       tranches such that immediately after the subscriptions, Futuregrowth will hold 45% and EWEH
       will hold 55% of the issued share capital of PGE.

       2.2.1 First Tranche Subscription
             Subject to the fulfillment of the conditions precedent, Global and Futuregrowth will each
             subscribe for shares in PGE for a subscription price of R12 000 000, totaling R24 000 000.

       2.2.2 Second Tranche Subscription
             Subject to the fulfillment of the second tranche conditions Global and Futuregrowth will
             each subscribe for shares in PGE at a subscription price of R8 250 000, totaling
             R16 500 000.
2.3   Effective Dates
      The first tranche effective date shall be the third business day after the day on which all of the
      conditions precedent are fulfilled or waived.

      The second tranche effective date shall be the third business day after the date on which the
      last of the second tranche conditions precedent have been fulfilled or waived.

2.4   Conditions Precedent
      Both tranches of the subscription are subject to various conditions precedent, mainly relating
      to operational and intellectual property matters, but including confirmation of no material
      changes to the project plan. Shareholder and regulatory approval is not required for the
      Transaction.

2.5   Other significant terms
      Should an independent technical expert appointed by the Parties find that certain
      performance criteria are not achieved by the first reactor constructed in Phase 1 for a
      continuous period of 30 (thirty) days, then the subscription price for Futuregrowth shall be
      effectively reduced by R1.5 million.

3.    Financial Information
      The Transaction will have no impact on the Statement of Comprehensive Income and the net
      asset value of Global. Cash and cash equivalents will increase by R20.25m and the amount
      attributable to minority shareholders will similarly increase by R20.25m.

4.    Categorisation
      As the issue of shares for cash is by an unlisted subsidiary of Global, the Transaction has been
      categorised as a category 2 disposal in accordance with paragraphs 3.35 and 9.5(a) of the
      JSE Listings Requirements. Shareholder approval of the Transaction is accordingly not required.

5.    Renewal of Cautionary Announcement
      Shareholders are referred to the renewal of cautionary announcement dated 15 April 2016
      and are advised that negotiations for a possible strategic BEE partnership are still on-going.
      Shareholders are accordingly advised to continue to exercise caution in dealing in their
      Global shares until a further announcement in this regard is published.

Johannesburg
31 May 2016

Designated Advisor
Arbor Capital Sponsors Proprietary Limited

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