Revised terms of the compulsory convertible preference share rights offer and proposed circular to shareholders Chemical Specialities Limited Incorporated in the Republic of South Africa Registration number 2005/039947/06 Share code: CSP ISIN: ZAE000109427 ("Chemspec" or "the Company") REVISED TERMS OF THE COMPULSORY CONVERTIBLE PREFERENCE SHARE (“CCP”) RIGHTS OFFER AND PROPOSED CIRCULAR TO SHAREHOLDERS 1. INTRODUCTION Shareholders are referred to the announcement of 27 June 2013, published on the Stock Exchange News service of the JSE Limited (“SENS”), whereby shareholders were advised of a proposed rights offer to raise approximately R193 million in the form of a renounceable compulsory convertible preference shares (“the proposed rights offer”). Shareholders are advised that the terms of the proposed rights offer have been revised to adjust to the prevailing market price of Chemspec ordinary shares, as more fully set out in paragraph 2 below. 2. REVISED PARTICULARS OF THE PROPOSED RIGHTS OFFER Gross amount R214,772,330 raised Ratio 50 CCP’s for every 100 ordinary shares held Dividend rate 8% cumulative preference dividend per annum, calculated on the issue price (before the dividend tax) payable six- monthly Issue price 40 cents* per CCP Conversion terms 1 ordinary share for every 1 CCP after 3 years from issue Listing Application will be made for a listing of the CCP’s on the JSE * The issue price is at a premium of 11% to the closing price of 36 cents per Chemspec ordinary share on Thursday 1 August 2013, the day before this announcement. 3. PROPOSED CIRCULAR TO SHAREHOLDERS In order to effect the proposed rights offer in terms of the Companies Act, no 71 of 2008 (“the Act”) and the JSE Listings Requirements, shareholders will be asked in general meeting to approve the following corporate actions: - amendments to the Company’s Memorandum of Incorporation to create 750,000,000 compulsory convertible preference shares and to increase the number of authorised ordinary shares in the share capital of the Company by an additional 750,000,000 ordinary shares; - authorising the Board, specifically, to issue CCPs to ordinary shareholders in accordance with the proposed rights offer; - authorising the Board, generally, to issue the balance of the CCPs for cash; and - a waiver of any potential mandatory offer which may be triggered as a result of the proposed rights offer. Chemspec is in the process drafting a circular to shareholders to be posted to shareholders on and about 8 August 2013 incorporating a notice of general meeting and further details will be announced as soon as possible. 4. IRREVOCABLE UNDERTAKINGS Chemspec shareholders representing 65,28% of the shares in issue have irrevocably undertaken to vote in favour of the shareholders resolutions (required in terms of the Act and the JSE Listings Requirements) necessary to give effect to the proposed rights offer. 5. CONDITIONS PRECEDENT The proposed rights offer is conditional upon, inter alia: - the approval by the JSE of the required documentation so as to implement the proposed rights offer; - the passing of any necessary shareholder resolutions required to implement the proposed rights offer; - the registration by the Registrar of Companies of all documents and resolutions (if any) required in respect of the proposed rights offer; and - obtaining all regulatory approvals required (if any) in terms of the Act. 6. CAUTIONARY ANNOUNCEMENT AND FURTHER DETAILED ANNOUNCEMENT Shareholders are advised that the proposed rights offer may have a material effect on the price of the Company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the Company’s securities until a full announcement is made setting out the salient dates and times as well as the pro forma financial effects of the proposed rights offer. A further detailed announcement will be made in due course. Durban 2 August 2013 Designated Advisor Grindrod Bank Limited Date: 02/08/2013 04:17:00 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.