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GRF - Group Five Limited - Voluntary market update GROUP FIVE LIMITED (Incorporated in the Republic of South Africa) (Registration number 1969/000032/06) Share code: GRF ISIN: ZAE 000027405 ("Group Five" or "the group" or "the company") Voluntary market update Group Five wishes to update shareholders on further progress with respect to its BEE transaction with its 9.2% BEE shareholder, iLima Consortium (Proprietary) Limited ("iLima") ("the BEE transaction") Group Five announced in June 2009 that the BEE transaction would "unwind" and that this would entail the return of the shares held by iLima to the company. In line with this, Group Five made application to the Johannesburg High Court in September 2009 for an order compelling the return of these shares. The judgment handed down by the Johannesburg High Court, found in favour of Group Five. The result of the judgment is that the 11,015,959 Group Five shares currently held by iLima will be returned to Group Five and cancelled. The accounting effect of this judgment is as follows: - the capital of the group will reduce once the shares are returned and cancelled; - the fully diluted weighted average number of shares will decrease. As previously reported, the return of the 11,015,959 Group Five shares will have the effect of reducing the reported H1 F2010 fully diluted weighted average number of shares from 105,5 million shares to 101,2 million shares; and - no income statement impairment. As previously reported, the group entered into an Enterprise Development Agreement ("EDA") with iLima Projects (Proprietary) Limited ("iLima Projects"). In terms of the EDA, Group Five periodically advanced technical and administrative guidance and provided bond and guarantee support and working capital loans to iLima in relation to construction projects undertaken by iLima Projects up until September 2007. The group has previously disclosed its commitments in terms of the EDA in its Annual Financial Statements and, as at 31st December 2009, the value of direct and indirect financial assistance provided to iLima by the group was R172 million. The direct financial assistance, reflected as a current asset, as well as the indirect financial assistance, reflected as a contingent liability, (if incurred), will be set off against the return of the group`s shares by iLima. The unwinding of the BEE transaction with iLima is a huge disappointment to Group Five as the group remains committed to the advancement of broad based black economic empowerment. However, important lessons have been learnt that will be applied in future in the structuring of any potential/proposed BEE transactions. The unwinding of the iLima element of the Group Five BEE transaction does not impact upon Group Five`s other BEE shareholders or Group Five`s BEE management and employee schemes. Despite the unwind, Group Five`s overall BBBEE rating of Level 3 will remain in place due to improvements in areas of its scorecard other than ownership, such as preferential procurement, employment equity, skills transfer and training. The group will continue to update shareholders on the formalities to the unwind process, its related timing and conclusion. Johannesburg 14 April 2010 Sponsor Nedbank Capital Date: 14/04/2010 12:11:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
