MONTAUK HOLDINGS LIMITED - Abridged Pre-Listing Statement of Montauk Holdings Limited

Abridged Pre-Listing Statement of Montauk Holdings Limited

MONTAUK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2010/017811/06
Share code: MNK ISIN: ZAE000197455
Date of incorporation: 31 August 2010
(Previously HCI International Holdings Limited and Elgabrite Proprietary Limited)
(“Montauk Holdings” or “the Company”)

ABRIDGED PRE-LISTING STATEMENT OF MONTAUK HOLDINGS LIMITED - LISTING OF THE ISSUED SHARE
CAPITAL OF MONTAUK HOLDINGS (“LISTING”) ON THE MAIN BOARD OF THE JSE LIMITED (“JSE”)

1.   INTRODUCTION

The abridged pre-listing statement appearing below (“Abridged Pre-listing Statement”) is not an
invitation to the public to subscribe for shares in Montauk Holdings, but is issued in compliance with the
Listings Requirements of the JSE for the purpose of providing information to the public and investors in
respect of Montauk Holdings.

The board of directors of the holding company of Montauk Holdings, Hosken Consolidated Investments
Limited (“HCI”) have elected to unbundle all of the Montauk Holdings shares held by HCI (“Unbundling”)
to its shareholders recorded on the HCI securitities register on Friday, 12 December 2014 (“Record
Date”), pursuant to which the entire issued share capital of Montauk Holdings will be listed on the main
board of the JSE.


2.   OVERVIEW OF MONTAUK HOLDINGS

Montauk Holdings develops, owns and operates large scale renewable energy projects utilising landfill
methane in the USA. Montauk Holdings and its subsidiaries and associates (“the Group”) has over 20
years’ experience in permitting, design, construction and operation of energy facilities utilizing landfill
gas (“LFG”) and is headquartered in Pittsburgh, Pennsylvania. The Group’s expertise and experience
includes, inter alia, the following:

    - pipeline quality gas production;
    - electric power generation;
    - carbon reduction and offset credits;
    - renewable energy credits; and
    - LFG collection system operations.

The Group’s portfolio of LFG processing and power generation assets has the following attractive
characteristics:

     -   leading market position in the conversion of LFG to pipeline quality natural gas;
     -   large-scale LFG projects provide substantial cash flows;
     -   attractive pricing on contracts with creditworthy counterparties;
     -   active management with the expertise and experience to support growth initiatives;
     -   well-defined expansion opportunities;
     -   favourable political and regulatory climate for renewable energy;
     -   seasoned, experienced professionals at all levels of organisation; and
     -   a strong environmental and safety record.

3.   RATIONALE

HCI, the holding company of Montauk Holdings, believes that the Unbundling best serves the interests
of HCI shareholders and will enhance HCI shareholder value through improving the public profile of, and
providing additional information regarding, Montauk Holdings. The HCI board of directors believe that
Montauk Holdings has the operational and financial capacity to pursue its envisioned growth strategy
independently and the Listing provides Montauk Holdings with the opportunity to raise additional capital
to facilitate future expansion, if required. The separate Listing of Montauk Holdings is further intended to
provide HCI shareholders with the flexibility to maintain, increase or decrease their investment in
Montauk Holdings based on their assessment of its prospects. In addition, through the Unbundling, the
Listing is intended to provide HCI shareholders with the opportunity to obtain direct exposure to the LFG
sector which offers an alternative risk and return profile to their current shareholding in HCI and which
has attractive growth prospects over the medium to long term.

Montauk Holdings has in the past been overlooked by investors because of its size relative to other
larger and higher profile HCI investments. The Listing will provide visibility and additional information
regarding Montauk Holdings which will allow investors to better assess its value.

4.   PROSPECTS

The Group has a number of planned strategies to achieve strong growth over the medium to long term,
which include:
     -   strategic acquisitions in a fragmented LFG industry with significant opportunity for
         consolidation;
     -   improved efficiencies of existing operations to achieve optimal economies of scale; and
     -   diversification into complimentary energy business lines.

5.   LISTING ON THE JSE

The JSE has granted Montauk Holdings a listing by way of introduction of all its issued ordinary shares on
the JSE main board under the abbreviated name “MONTAUK”, share code “MNK” and ISIN
ZAE000197455 with effect from the commencement of trade on 8 December 2014. Montauk Holdings
will be listed in the “Integrated Oil and Gas” sector.

6.   SHARE CAPITAL

At the Listing Date, the authorised share capital of Montauk Holdings will comprise 200 000 000
ordinary shares with no par value and 200 000 000 unclassified shares. Montauk Holdings will have an
issued share capital comprising 135 256 156 ordinary shares with no par value (“Montauk Holdings
Shares”). The issued share capital has a value of US$166 202 000. There will be no other class of shares
authorised or issued by Montauk Holdings at the Listing Date. All the Montauk Holdings Shares rank pari
passu in all respects, and all have equal rights to participate in capital, dividends and profit distributions
by Montauk Holdings. The Montauk Holdings Shares are fully paid-up and freely transferable. Montauk
Holdings does not have any shares held in treasury. There are no convertibility or redemption provisions
relating to the Montauk Holdings Shares.

7.   MONTAUK HOLDINGS DIRECTORS

The full names, ages, business addresses and capacities of the directors of Montauk Holdings are
provided below:

 Full name                 Age      Capacity                     Business Address

                                                                 Fifth Floor, Foster Plaza Building 10,
 D R Herrman                47      Chief Executive Officer      680 Andersen Drive, Pittsburgh, PA,
                                                                 15126, United States of America
                                                                 Fifth Floor, Foster Plaza Building 10,
 S F McClain                40      Chief Financial Officer      680 Andersen Drive, Pittsburgh, PA,
                                                                 15126, United States of America

                                                                 Suite 801, 76 Regent Road, Seapoint,
 J A Copelyn                64      Non-executive Chairman
                                                                 Cape Town, 8005, South Africa

                                    Independent non-             52 Intersite Avenue, Umgeni Business
 M H Ahmed                  49
                                    executive Director           Park, Durban, 4001, South Africa

                                                                 Suite 61, 14 Narabang Way, Belrose,
 MA Jacobson                46      Non-executive Director
                                                                 New South Wales, 2085, Australia
                                    Independent non-             42 Overport Drive, Overport, Durban,
 N B Jappie                 54
                                    executive Director           4091, South Africa
                                                                 Fifth Floor, Foster Plaza Building 10,
                                    Independent non-
 B S Raynor                 64                                   680 Andersen Drive, Pittsburgh, PA,
                                    executive Director
                                                                 15126, United States of America
                                                                 La Concorde, 57 Main Street, Paarl,
 A van der Veen             43      Non-executive Director
                                                                 7646, South Africa
8.   OWNERSHIP AND CONTROL

Immediately following the Unbundling, HCI shareholders will hold Montauk Holdings Shares in
proportion to their shareholdings in HCI.

Sactwu and certain of the directors and members of management of HCI, who will become shareholders
of Montauk Holdings following the Unbundling by virtue of their shareholdings in HCI have entered into
an agreement to regulate the manner in which they will conduct themselves in relation to their
Montauk Holdings Shares. The agreement establishes a voting pool amongst the parties to the
agreement and the parties furthermore grant one another pre-emptive rights in respect of the parties’
Montauk Holdings Shares.

Sactwu and certain of the directors and members of management of HCI have entered into an option
agreement comprising a put and call option. Sactwu has indicated that it may divest from its investment
in Montauk Holdings as the investment does not fit its investment mandate of supporting businesses
that operate in South Africa and as such the option agreement will provide Sactwu with the opportunity
to exit its 30% shareholding in Montauk Holdings in an orderly manner which doesn’t adversely impact
the Company or the other shareholders.

The call option provides that the Montauk Holdings Shares held by Sactwu can be acquired by the other
parties to the agreement for an aggregate consideration of R142 645 000 (plus an amount of R3.44 per
additional Montauk Holdings Share acquired by Sactwu prior to the exercise of the call option) during
the call option period of 180 days commencing on the date of Listing.

The put option allows Sactwu to sell the Montauk Holdings Shares to the other parties to the agreement
at the lesser of the 20 day VWAP prior to the date on which the put option is exercised and the
aggregate amount of R142 645 000 (plus R3.44 per additional Montauk Holdings Share acquired by
Sactwu prior to exercise of the put option) during the put option period which commences when the call
option period ends and lasts for 20 business days thereafter.

9.   POSTING OF PRE-LISTING STATEMENT

The Pre-listing Statement will be posted to HCI shareholders on Wednesday 19 November 2014
regarding the Listing and containing detailed information regarding the Company (“Pre-listing
Statement”). The Pre-listing Statement will also be available on HCI’s website at www.hci.co.za.

10. SALIENT DATES RELATING TO THE LISTING

The salient dates relating to the Listing and the Unbundling are set out below:

Release of the abridged Montauk Holdings Pre-listing Statement                    Wednesday, 19 November
on SENS on

Declaration and finalisation announcement released on SENS on                     Wednesday, 19 November

Last Business Day to trade in HCI Shares on the JSE for settlement                     Friday, 5 December
by the Record Date, and thereby participate in the Unbundling on
All trades in HCI Shares from this day will exclude the right to                  Monday, 8 December
receive Montauk Holdings Shares on

Listing of Montauk Holdings Shares on the JSE under the JSE code:                 Monday, 8 December
MNK and ISIN ZAE000197455 with effect from the
commencement of business on

Record Date to participate in the Unbundling being the date on                     Friday, 12 December
which HCI shareholders must be recorded in the Register in order
to participate in the Unbundling on

Montauk Holdings Shares issued on                                                Monday, 15 December

CSDP or Broker accounts of HCI dematerialised shareholders                       Monday, 15 December
updated with the Montauk Holdings Shares and share certificates
posted to HCI certificated shareholders Montauk Holdings on

11. COPIES OF THE PRE-LISTING STATEMENT

Copies of the Pre-listing Statement will be available for inspection during normal office hours from
Wednesday, 19 November 2014 up to and including Monday, 15 December 2014 at the registered office
of Montauk Holdings (Suite 801, 76 Regent Road, Seapoint, Cape Town, 8005, South Africa), the offices
of the investment bank and sponsor (100 Grayston Drive, Sandown, Sandton, 2196, South Africa) and
the offices of the Transfer Secretaries (70 Marshall Street, Johannesburg, 2001) during normal business
hours (excluding Saturdays, Sundays and South African public holidays). In addition the Pre-listing
Statement will be available electronically on HCI’s website, www.hci.co.za.



Cape Town
19 November 2014

Investment bank and sponsor

Investec Bank Limited



Corporate law advisor

Edward Nathan Sonnenbergs Inc.



Reporting accountants

Grant Thornton (Jhb) Inc

Date: 19/11/2014 11:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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