PPC LIMITED - PPC Receives Indigenisation Certificate for its Operation Zimbabwe

PPC Receives Indigenisation Certificate for its Operation Zimbabwe

PPC LTD
(Incorporated in the Republic of South Africa)
(Company registration number: 1892/000667/06)
JSE Code: PPC
ISIN: ZAE000170049
("PPC" or the “company")

PPC RECEIVES   INDIGENISATION   CERTIFICATE   FOR     ITS   OPERATIONS    IN
ZIMBABWE

PPC is pleased to announce that the Government of Zimbabwe has
awarded an indigenisation certificate to Portland Holdings Limited
(“PHL”) the wholly-owned subsidiary incorporating all of PPC’s
operations in Zimbabwe.

The indigenisation certificate acknowledges PHL’s compliance with
both the spirit and the letter of the Zimbabwean Indigenisation and
Economic Empowerment Act.

The Indigenisation and Economic Empowerment Act requires non-
indigenous manufacturing companies operating in Zimbabwe to submit
an empowerment plan, to satisfy a 51% indigenous Zimbabwean
ownership requirement by October 2015.

This transaction follows a series of engagements between PHL and the
Zimbabwe Government, through the Minister of Youth Development,
Indigenisation and Empowerment, which engagements culminated in the
approval   of   an  empowerment   plan   that   complies  with   the
indigenisation legislation.

Through PPC's secondary listing on the Zimbabwe Stock Exchange and
an existing PHL Employee Share Option Plan, PHL was deemed to have a
pre-existing indigenous shareholding of 21.4%.

To comply with the legislative requirements, an additional 29.6%
equity in PHL will be sold to four indigenous parties:

1. The PPCZ Special Community Trust (“PSCT”)
   The PSCT will be issued with a 10% equity interest in PHL (post
   transaction).
   The PSCT will benefit communities within the surrounding area of
   PHL’s existing and future operations. The initial beneficiaries
   of the PCST will be the Gwanda Rural District and the Umguza
   Rural District share ownership trusts.

2. The National     Indigenisation   and   Economic    Empowerment       Fund
   (“NIEEF”)
   NIEEF will be    issued with a 9.7% equity interest in PHL (post
   transaction).
   The Government    of Zimbabwe has established this fund to benefit
   all indigenous   Zimbabweans.

3. Employee Share Option Plan (“ESOP”)
   PHL will establish a new ESOP which will be issued a 5% equity
   interest in PHL (post transaction).
  PHL’s existing and future qualifying      employees   will   benefit
  through this additional plan.

4. Strategic Equity Partners (“SEP”)
   SEP will be issued with a 4.9% equity interest in PHL (post
   transaction).
   PHL’s Strategic Equity Partners will initially consist of three
   current non-executive directors of PHL who are indigenous
   Zimbabweans.

The transaction has been facilitated by PHL through a notional
vendor facilitation (“NVF”) mechanism for a period of 10 years.

The empowerment plan will result in an economic cost of
approximately US$6.2 million which will be fully expensed in PHL’s
2013 income statement. During the NVF period, the facilitation
mechanism will lower PPC earnings by a nominal value of
approximately R0.02 per annum.

In addition to this facilitation, PHL will make a further US$3
million cash donation to the PPCZ Special Community Trust in order
to expedite urgent community development projects.

Paul Stuiver, CEO of PPC commented “We believe that our plan is both
practical and in the spirit of true indigenisation and economic
empowerment. We see the Zimbabwe market as an exciting growth
opportunity and expect our operations to approach full capacity over
the next 2-3 years. This opens up further investment opportunities
for PPC in Zimbabwe.”

19 November 2012

Sponsor:
Merrill Lynch South Africa (Pty) Limited

Merchant Bank and Transaction Advisors:
Rand Merchant Bank

Legal Advisors:
Bowman Gilfillan

Reporting Accountants:
Deloitte & Touche

PPC:
Azola Lowan
Tel: +27 (0) 11 386 9024
Azola.Lowan@ppc.co.za

Financial Communications Advisor:
College Hill
Jacques de Bie
Mobile: +27 (82) 691 5384
Jacques.deBie@collegehill.co.za

Notes:
PPC’s subsidiary Portland Holdings Limited is the largest cement
producer in Zimbabwe. Together the clinker manufacturing plant in
Colleen Bawn and the milling depot in Bulawayo can produce over
1000,000 tons of cement annually.

Zimbabwe has experienced a rapid increase in cement demand since
2009. National cement demand is currently estimated at more than one
million tons per annum.

PPC is the leading cement supplier in southern Africa with eight
cement manufacturing facilities and three milling depots in South
Africa, Botswana and Zimbabwe with total capacity to produce eight
million tons of cement annually.

PPC also produces millions of tons of aggregates, metallurgical-
grade lime, burnt dolomite and limestone annually in southern
Africa.

In addition to serving southern African markets, PPC is involved
with the construction of a new cement plant in Ethiopia and with
cement and lime exports to other African countries.

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