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PSG GROUP LIMITED - FURTHER INVESTMENT BY ARCH EQUITY (PROPRIETARY) LIMITED ("Arch Equity"), PSG GROUP"S BEE PARTNER, IN PSG GROUP PSG GROUP LIMITED (Incorporated in the Republic of South Africa) (Registration number 1970/008484/06) Share code: PSG ISIN: ZAE000013017 ("PSG Group" or "the company") FURTHER INVESTMENT BY ARCH EQUITY (PROPRIETARY) LIMITED ("Arch Equity"), PSG GROUP"S BEE PARTNER, IN PSG GROUP 1. Background 1.1 Arch Equity is a black company as defined in the Financial Sector Charter. The directors of Arch Equity are Messrs D Lockey (CEO), PJ Mouton (executive director) JF Mouton (non-executive), N Mtshotshisa (non-executive Chairman) and J Moropa (non-executive). 1.2 Arch Equity has, over the last number of months acquired 19,7 million PSG Group shares, resulting in Arch Equity holding 17,1% of PSG Group"s issued share capital. 1.3 It is intended that Arch Equity will subscribe for so many further PSG Group shares as will result in Arch Equity holding a 20% direct interest in PSG Group. 2. Specific issue of PSG Group shares for cash to Arch Equity 2.1 Subject to PSG Group shareholder approval, PSG Group will issue to Arch Equity 4 675 000 PSG Group ordinary shares ("the new PSG Group shares") for cash, at a subscription consideration of 314 cents per share, i.e. a total consideration of R14 679 500 ("the issue for cash"). 2.2 The new PSG Group shares will represent 3,9% of PSG Group"s issued shares after the issue for cash. 2.3 Arch Equity is a non-public shareholder in terms of the Listings Requirements ("Listings Requirements") of the JSE Securities Exchange South Africa ("the JSE"). 2.4 The issue price of 314 cents per share represents the weighted average traded price of 314 cents per share for the 30 trading days ended 20 August 2004, being the date the issue price was agreed by the directors of PSG Group and Arch Equity. 2.5 In terms of the Listings Requirements, the approval of a 75% majority of the votes cast by all shareholders present or represented by proxy at a general meeting of PSG Group shareholders, excluding any parties and their associates participating in the issue for cash, is required for the resolution to be proposed at the general meeting to be effective. Arch Equity will thus be excluded from voting their existing PSG Group shares at such general meeting. 2.6 Application will be made to the JSE for the listing of the new PSG Group shares upon their issue. 3. Related party transaction 3.1 In terms of the Listings Requirements, Arch Equity is an "associate" of Mr D Lockey by virtue of his substantial indirect shareholding in Arch Equity. In addition, Messrs D Lockey and JF Mouton are both directors of Arch Equity and of PSG Group. Consequently, the issue for cash is a "related party transaction" in terms of the Listings Requirements. 3.2 Messrs Lockey and Mouton will be taken into account in determining a quorum at the general meeting and they may vote the PSG Group shares owned and controlled by them, but their votes will not be taken into account in determining the results of the voting at the general meeting in relation to the issue for cash. 3.3 PSG Group will appoint independent advisers to consider the terms of the issue for cash, and to give an opinion on whether the terms of the issue for cash is fair and reasonable to PSG Group shareholders. 4. Pro forma financial effects of the issue for cash The table below sets out the unaudited pro forma financial effects of the issue for cash on PSG Group. The unaudited pro forma financial effects have been prepared for illustrative purposes only and because of their nature may not give a fair reflection of PSG Group"s financial position nor the effect on future earnings after the issue for cash. The financial effects set out below are based on the audited financial results of PSG Group for the year ended 29 February 2004 and the financial position of PSG Group at that date and have been prepared assuming that: for purposes of the earnings and headline earnings per share figures, the issue for shares was effected on 1 March 2003; and for purposes of the net asset value and net tangible asset value per share figures, the issue for cash was effected on 29 February 2004. Before the After the issue for issue for Change cash cash %
(cents) (cents) Earnings per share 29,3 29,0(1) (1,0) Headline earnings per 72,6 70,5(1) (2,9) share Net asset value per share 316 316 - Net tangible asset value per 277 279 0,7 share Number of shares at year end (`000) - in issue 105 000 109 675 - weighted average 111 700 116 375 Actual shares in issue(2) 115 000 119 675 Notes: (1) Assuming interest earned on R13,9 million, being the gross proceeds of the issue for cash of R14,7 million less the estimated transaction costs of R800 000, at an after-tax rate of 7%. (2) Subsequent to year end PSG Group issued 10 million shares to Arch Equity ("the previous issue"). The previous issue was the subject of a previous announcement and subsequent circular to shareholders dated 7 April 2004. The figures in the "Before the issue for cash" column above are based on the shares in issue at year-end and the weighted average number of shares in issue for the year ended 29 February 2004, i.e. before the previous issue. 5. Circular to PSG Group shareholders A circular to PSG Group shareholders, containing full details of the issue for cash and notice of a general meeting of PSG Group shareholders will, subject to JSE approval, be sent to PSG Group shareholders in due course. Stellenbosch 21 September 2004 Corporate adviser and joint sponsor PSG CAPITAL LIMITED (Registration number 2002/017396/06) Lead sponsor PRICEWATERHOUSECOOPERS CORPORATE FINANCE (PTY) LTD (Registration number 1970/003711/07) Date: 21/09/2004 05:52:21 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
