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SFH - SA French Limited - Issue of shares for cash SA FRENCH LIMITED Incorporated in the Republic of South Africa (Registration number: 1982/009174/06) Share code: SFH ISIN: ZAE000108890 ("SA French" or the "Company" or the "Group") ISSUE OF SHARES FOR CASH 1. Introduction 1.1 Shareholders are advised that, in terms of a general authority to issue ordinary shares for cash granted to the directors at the annual general meeting held on 5 January 2012, SA French has issued a total of 44 403 296 ordinary shares for cash, representing 7.84% of the issued ordinary share capital of SA French, at an issue price of 10 cents each (the "Issue Price") to a public shareholder as defined in the Listings Requirements of the JSE Limited (the "Listings Requirements"). The proceeds of this issue will be applied for working capital purposes and to settle certain historic liabilities. 1.2 In addition, SA French has issued in terms of section 5.51(g) of the Listings Requirements a total of 1 012 395 shares, representing 0.18% of the issued ordinary share capital of SA French, to AfrAsia Corporate Finance (Proprietary) Limited in lieu of corporate advisory fees at the Issue Price. 1.3 The issues of shares detailed in paragraph 1.1 and 1.2 above is collectively hereinafter referred to as the "Cash Issue". 1.4 The Issue Price is equal to the 30-day volume weighted average price per SA French share, namely 10 cents, as at 23 April 2012, being the date the board of directors of SA French approved the Cash Issue. 1.5 While SA French continues to build on its trading recovery, the amounts due in respect of historic liabilities were burdensome on the business from a cash flow perspective. In addition, the institutions in respect of these historic liabilities have not been supportive of SA French through the cycle and would not be considered as long term partners for the business. While carefully considering the dilutionary impacts on existing shareholders, the directors therefore deemed it to be in the best interests of the business to issue shares under the general authority granted by shareholders and to replace these short term liabilities with long-term equity capital. 2. Pro forma financial effects of the Cash Issue The unaudited pro forma financial effects of the Cash Issue, for which the directors are responsible, are provided for illustrative purposes only to show the effect thereof on basic profit and headline loss per share as if the Cash Issue had taken effect on 1 July 2011 and on net asset value and net tangible asset value per share as if the Cash Issue had taken effect on 31 December 2011. Due to their nature, the pro forma financial effects may not give a fair presentation of the Group`s financial position and performance. The unaudited pro forma financial effects have been compiled from the unaudited condensed consolidated interim results for the six months ended 31 December 2011 and are presented in a manner consistent with the format and accounting policies adopted by SA French and have been adjusted as described in the notes below: Note Unaudited Unaudited % Change
Before the After the Cash Issue Cash Issue Basic profit per 2 0.04 0.04 (7.42)% share Headline loss 2 (0.16) (0.15) 7.42% per share Net asset value 3 9.06 9.22 0.77% per share Net tangible 3 9.06 9.22 0.77% asset value per share Weighted average 566 375 689 611 791 380 8.02% number of shares in issue Shares in issue 566 375 689 611 791 380 8.02% at end of period Notes: 1. The "Unaudited Before the Cash Issue" column information has been extracted from SA French`s unaudited condensed consolidated interim results for the six months ended 31 December 2011. 2. The once-off effects relating to basic profit and headline loss per share are based on the following assumptions and information: 2.1 the Cash Issue was effective 1 July 2011; 2.2 R4 541 569 was received in terms of the 45 415 691 shares issued; 2.3 no adjustments have been made to reflect any benefit (income or interest earned/saved) to be derived from the proceeds of the Cash Issue, in terms of the "Guide on Pro Forma
Financial Information" issued by the South African Institute of Chartered Accountants dated September 2005; and 2.4 the expenses relating to the Cash Issue are insignificant and will be capitalised.
3. The effects relating to the Statement of Financial Position are based on the following assumptions and information: 3.1 the Cash Issue was effective 31 December 2011; and 3.2 the actual number of shares in issue will increase by 45 415 691 as a result of the Cash Issue. Johannesburg 10 May 2012 Corporate Advisor: AfrAsia Corporate Finance (Proprietary) Limited Designated Adviser: PSG Capital Proprietary Limited Date: 10/05/2012 15:56:16 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.
