Dorbyl Limited - Distressed Statement DORBYL LIMITED (Incorporated in the Republic of South Africa) Registration Number: 1911/001510/06 Share Code: DLV ISIN: ZAE000002184 ("Company" or "Dorbyl") DISTRESSED STATUS OF DORBYL In terms of section 128 (1) (f) of the Companies Act 71 of 2008 (“the Companies Act”) a company will be considered to be financially distressed if at any particular time; i) it appears to be reasonably unlikely that the company will be able to pay all of its debts as they become due and payable within the immediately ensuing six months; or ii) it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months. After due consideration the Board of Directors (“the Board”) of the Company has concluded that although it is reasonably likely that the Company will remain solvent in the ensuing six months it is reasonably unlikely that the Company will be able to pay all of its debts as they become due and payable within this period. The Board therefore considers the Company to be solvent but due to anticipated liquidity challenges and in terms of the above definition prescribed by the Companies Act, the Company should be classified as a distressed company. Accordingly, a distressed announcement is therefore issued and published in terms of section 128(1)(f) of the Companies Act. Although the Company can be classified as distressed, the Board has decided not to pass a resolution to enter into business rescue proceedings, the reason being that the Board has received two independent offers to acquire up to 100% of the issued share capital of the Company. The respective offering parties are: 1. African Dune (Pty) Limited (“African Dune”) who, as advised on SENS on 20 September 2012 and in the press on 21 September 2012, increased their total shareholding in Dorbyl to 41.69% and is therefore obliged to make a mandatory offer to all shareholders in terms of which section 123 of the Companies Act, 2008 as amended. In terms of the mandatory offer, African Dune offers to acquire as many shares from Dorbyl shareholders at R0.65 (sixty five cents) per ordinary share; and 2. the Industrial Development Corporation of South Africa (“IDC”) on behalf of a private company to be nominated (“IDC Consortium”), who, as announced on SENS on 8 October 2012 and to be published in the press on 9 October 2012, made an offer to acquire up to 100% (one hundred percent) of the total issued ordinary share capital in Dorbyl at R0.73 (seventy three cents) per ordinary share, subject to the IDC Consortium acquiring a minimum shareholding in Dorbyl of 75% (seventy five percent) of the entire issued ordinary share capital of Dorbyl. The IDC has a mandate to support the expansion or modernisation of operations in existing industries in South Africa as well as to promote the economic empowerment of historically disadvantaged individuals and communities. Due to the fact that the Company is a public company, the offers have to proceed within a specified legal framework that is likely to be concluded within three months time. In terms of this framework certain announcements and publications have to be made in the media, which will provide relevant information to affected parties. The Board believes that either of the offers received could provide a long-term solution to the current challenges faced by the Company. Furthermore the Board is also pursuing various options to address any short-term liquidity challenges and will engage with the relevant stakeholders. Johannesburg 8 October 2012 Sponsor: PSG Capital Proprietary Limited Date: 08/10/2012 05:45:00 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.