Further det caut announcement re the potential acquisition of the business and assets of Reinhardt Transport Group LABAT AFRICA LIMITED (Incorporated in the Republic of South Africa) (Registration number 1986/001616/06) (“Labat” or “the company”) ISIN Code: ZAE000018354 Share code: LAB FURTHER DETAILED CAUTIONARY ANNOUNCEMENT REGARDING THE POTENTIAL ACQUISITION OF THE BUSINESS AND ASSETS OF REINHARDT TRANSPORT GROUP Shareholders of Labat are referred to the Company’s announcement of 28 April 2015 regarding Labat’s intention to acquire a business for R627.5 million (“the proposed transaction”). Shareholders are advised that the Proposed Transaction referred to in that announcement is that of a logistics and transport business called Reinhardt Transport Group Proprietary Limited (“RTG” or “the business”). Shareholders are advised that Labat and RTG are in the process of entering into sale and purchase agreements for the acquisition of the brands, business and assets of RTG (“Sale Assets”). In terms of the Proposed Transaction, Labat will acquire the Sale Assets at a purchase consideration of R627.5 million (six hundred and twenty seven million and five hundred thousand Rand) to be settled in cash. The Proposed Transaction will be subject to certain conditions precedent being fulfilled including, inter alia, regulatory and shareholder approvals. It is noted that Labat remains a preferred bidder in relation to the acquisition of the Sale Assets from RTG. RTG GROUP Given RTG’s dynamic and experienced management team, their wish to succeed and the responsible manner in which RTG conducts its business, there is every reason to expect that RTG will achieve even greater success in the future and continue to grow. RTG is well established and recognised within the transport market and is seen as one of the largest privately owned logistic businesses in South Africa, an aspect certain clients see as a significant advantage. RTG has a strong platform, and accordingly its cash flow generating ability remains excellent. RTG provides a unique opportunity to invest in a thriving business in South Africa which will provide a solid return on investment to any incoming investor. RTG consists of the following operations: - Reinhardt Transport; - Chrome Carriers; and - Amalgamated Bulk (dormant). The above operations run as divisions within RTG. RTG currently has seven operating depots, based in Nigel, Rustenburg, Durban, Richards Bay, Komatipoort, Phalaborwa and Maputo. RTG - FINANCIAL PERFORMANCE The revenue generated by the business is expected to exceed R1.5 billion for the year ending 30 June 2015, whilst historic EBITDA generated by the business for the year ended 30 June 2014 amounted to R315 million, with an expected EBITDA of approximately R338 million to 30 June 2015. Projected profit after tax for the year ending 30 June 2015 is expected to reach around R100 million, before any once-off or IFRS adjustments. Shareholders are advised that the implementation of the Proposed Transaction will result in a reverse takeover of Labat. The JSE Listings Requirements stipulate that the Company can only retain its listing following a reverse listing if the JSE is satisfied that the Company continues to qualify to be listed. Pursuant to the Proposed Transaction Labat will be submitting an application for a transfer of its listing to the Main Board. RENEWAL OF CAUTIONARY ANNOUNCEMENT It should be noted that this is a detailed cautionary announcement and is not a final terms announcement. The Company will only commence with the preparation of a circular to shareholders once certain conditions precedent have been met and the Company has been confirmed as the preferred bidder and Purchaser of the Sale Assets from RTG. Shareholders are further advised that Labat intends issuing new shares in Labat in order to settle a portion of the cash consideration, with a preference to B-BBEE investors, BEE investors, existing Labat shareholders and the RTG vendors and management. In considering the placing, the board of directors of Labat wishes to ensure that Labat remains a black company bearing in mind the new BEE Codes and the various industry charters in which RTG operates. This will obviously result in a dilution to existing Labat shareholders, the extent of which has not been determined as yet. The pricing and details of the placing will be communicated in due course and interested participants are encouraged to contact the company’s sponsor to register an interest on 011 480 8500 with either Kay Stoler or Michelle Krastanov. Further negotiations regarding the Proposed Transaction, as well as other negotiations in the logistics industry are still in progress and if successfully concluded, may have an effect on the price at which the Company’s securities trade. Shareholders are also advised that Global Emerging Market (GEM), the USA based private equity fund, has extended its line of equity facility of US$100 million (approximately R1.2 billion) to Labat for another five years, to fund further acquisitions in the transport and logistics sector. Shareholders are accordingly advised to continue to exercise caution when dealing in the Company’s securities until a full announcement is made and the cautionary announcement withdrawn. Johannesburg 19 May 2015 Sponsor Arbor Capital Sponsors Proprietary Limited Date: 19/05/2015 03:26:00 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.