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PNC - Pinnacle - Acquisition by Pinnacle of an additional interest in Centrafin Pty Ltd from Centratel Group Investments Pty Ltd - a small related party transaction Pinnacle Technology Holdings Limited Registration number 1986/000334/06 Share Code: PNC ISIN: ZAE000022570 ("Pinnacle" or the "Company") ACQUISITION BY PINNACLE OF AN ADDITIONAL INTEREST IN CENTRAFIN PROPRIETARY LIMITED ("CENTRAFIN") FROM CENTRATEL GROUP INVESTMENTS PROPRIETARY LIMITED ("CGI") - A SMALL RELATED PARTY TRANSACTION 1. Introduction Shareholders are advised that Pinnacle entered into a Sale of Shares Agreement on 28 July 2011 ("the Agreement"), whereby CGI will dispose of its 39.2% stake in Centrafin ("the Sale Shares") to Pinnacle for a total purchase price of R11 350 000 ("the Purchase Price") subject to the fulfilment of the suspensive condition set out below ("the Transaction"). The effective date shall be 30 June 2011 ("the Effective Date") provided that the suspensive condition set out in 4 below is fulfilled. The business of Centrafin is the provision of medium term financing solutions to both commercial and public sector entities for the acquisition of information and communication technology and allied products both from the Pinnacle Group and from third parties. Pinnacle already owns 51% of Centrafin. The remaining 9.8% is owned by Ms J S Gill, the current Managing Director of Centrafin, who has waived her pre-emptive right to purchase the Sale Shares. 2. Rationale Pinnacle wishes to re-engineer the business model of Centrafin in a manner that may necessitate an additional injection of loan funding that the outside shareholders are unlikely to match by the provision of either funds or security. The Board of Pinnacle believes that the re-engineering plans for the business will better realise the potential that it sees in this business, particularly in view of the fact the business is a potential enabler for the group`s core businesses lines. The Board does not wish to grow this business while there are outside shareholders in Centrafin who are not employed in the business and will not either share the financing burden arising out of such growth with the Group or share the risks inherent therein. 3. Salient terms In terms of the Agreement, CGI shall dispose of all 39.2% of the issued ordinary share capital in Centrafin held by it to Pinnacle for the Purchase Price. Pinnacle shall make payment of the Purchase Price to CGI in cash within two business days of when the suspensive condition detailed in 4 below has been fulfilled. 4. Suspensive condition All suspensive conditions have been fulfilled, save for the Transaction still being subject to the fulfilment of the following unfulfilled suspensive condition: 4.1 Compliance by 31 August 2011, or such later date as the parties may agree, with the JSE Limited ("JSE") Listings Requirements and any other regulations issued by the JSE from time to time, including but not limited to Pinnacle obtaining a fairness opinion on the Transaction from a JSE approved service provider in a form acceptable to the JSE. 5. Pro forma financial effects The pro forma financial effects of the Transaction on Pinnacle`s financial results for the six months ended 31 December 2010 are not significant. 6. Independent Opinion The Pinnacle board of directors has appointed Mazars Corporate Finance (Pty) Limited, an independent expert to provide the Company with a fairness opinion on the Transaction. The appointment of the independent expert has been approved by the JSE the independent expert has issued a fairness opinion which is currently with the JSE for their approval. 7. Small related party transaction CGI is a material shareholder in Centrafin. The Purchase Price is 0.75% of the market capitalisation of Pinnacle calculated as at close of business on 28 July 2011 and therefore the Transaction is classified to be a small related party transaction in terms of Section 10.7 of the Listings Requirements of the JSE. Midrand 29 July 2011 Sponsor Deloitte & Touche Sponsor Services (Pty) Ltd Date: 29/07/2011 10:07:01 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.
