PSG Group Limited - BEE Transaction and Issue for Shares for Cash

PSG Group Limited - BEE Transaction and Issue for Shares for Cash               
PSG Group Limited                                                               
(Registration number 1970/008484/06)                                            
Share Code:  PSG                                                                
Isin Code:  ZAE000013017                                                        
("PSG Group")                                                                   
BEE Transaction and Issue of Shares for Cash                                    
1.   Background and Rationale                                                   
1.1  PSG Group has explored various avenues over a lengthy period of time to    
introduce a Black Economic Empowerment partner "(BEE") partner within           
PSG Group.  In addition PSG Group wishes to comply with the Financial           
Sector Charter.  As part of PSG Group"s project growth, the board of PSG Group  
has resolved to enter into a BEE transaction.                                   
1.2  PSG Group has identified, after a lengthy process, a BEE company lead by   
Mr Desmond Lockey as chief executive officer ("BEE company") as a               
suitable BEE partner and shareholder                                            
1.3  The BEE company will concentrate on making further BEE-led transactions.   
     This includes the Channel Life Ltd acquisition made by Mr Lockey recently. 
1.4  Mr Lockey has bee appointed to the PSG Group board.                        
2.   Issue for Cash                                                             
2.1  PSG Group has agreed to do an issue for cash (using its treasury stock) to 
enable the BEE company to acquire 10 million shares at a price equal to 92 1/2 %
of the 30 days weighted average trading price on the JSE up to 19 February 2004,
i.e. 355,5 cents per share representing 3.7% of PSG Group"s issued share        
capital.                                                                        
2.2  This is the first step to enable the BEE company to hold at least 10% of   
PSG Group shares.                                                               
2.3  In addition the BEE company has raised sufficient capital to fund the issue
for cash.  It is the BEE company"s intention to raise further capital in due    
course by way of a private placing.                                             
3.   Condition Precedent                                                        
The issue for cash is subject to shareholders approval in general meeting. 
4.   Listing of the new PSG Group shares                                        
     Application to the JSE Securities Exchange South Africa to list the new PSG
Group shares will only be made after approval from shareholders in the          
general meeting mentioned in 6 below.                                           
5.   Pro forma financial effects                                                
     The table below sets out the pro forma financial effects of the issue for  
cash on                                                                         
a PSG Group shareholders.  The pro forma financial effects have been            
prepared for illustrative purposes only, and, because of their nature, may not  
give a true reflection of PSG Group"s financial position or results.            
                                   6 Months ended 31 August 2003                
Before         After     Change              

                                   (cents)        (cents)   %                   
Earnings per share                 5,1            6,0       17,6                
Headline earnings per share        24,6           24,6      -                   
Net asset value per share          410            423       3.2                 
Net tangible asset value per share 331            348       5,1                 
Assumptions:                                                                    
The pro forma financial effect ("before") are calculated on PSG"s interim       
results for the half year ended 31 August 2003, adjusted for the unbundling of  
Capitec Bank Holdings Limited ("Capitec") and 5 300 000 shares repurchased      
before 31 August 2003, assuming:                                                
-    The accounting policies employed by PSG for the year ended 28 February 2003
have been applied in making these calculations.                                 
-    For the purposes of calculating the earnings and headline earnings related 
figures, it was assumed that the issue for cash was carried out on or before 1  
March 2003 and that PSG earned a 7% after-tax return on its cash.               
-    All the calculations have been based on a weighted average number of shares
in issue of 120 783 000, after the issue for cash.                              
-    For the purposes of calculating the net asset and net tangible asset value,
it was assumed that the issue for cash was carried out on 31 August 2003, using 
the number of shares in issue at that date of 115 000 000 (after the issue for  
cash.).                                                                         
6.   General Meeting and Related Party                                          
6.1  The aforesaid issue for cash is a related party transaction and therefore, 
subject to shareholders" approval in a general meeting to be held on or about 16
April 2004.  A circular will be posted to shareholders on or about 1 April 2004.
Date:  25 February 2004                                                         
Sponsor                                                                         
PSG Capital                                                                     
Lead Sponsor                                                                    
PWC Corporate Finance                                                           
Date: 25/02/2004 02:50:53 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department