Group restructuring update Group Five Limited (Incorporated in the Republic of South Africa) (Registration number: 1969/000032/06) Share code: GRF ISIN: ZAE000027405 ("Group Five” or "the Company" or "the Group") ____________________________________________________________________________ Group restructuring update _____________________________________________________________________________ Introduction The board of Group Five wishes to provide an update to the market on the group’s restructuring process, which was highlighted to the market as a priority short-term management focus area in February 2017. The acting CEO, Themba Mosai, has implemented meaningful changes since his appointment at the beginning of March 2017. These changes are aimed at unlocking shareholder value and addressing mainly the loss-making Engineering & Construction (E&C) cluster. The board and executive management are aligned on this approach. As part of this business turnaround process led and implemented by management, with support from independent consultant Deloitte Consulting, the E&C Cluster has now been split into Construction: South Africa, Construction: Rest of Africa and engineer, procure and construct (EPC) sector businesses. These changes will result in more focused businesses with appropriate resources and cost bases relevant to the regions and service offerings provided. This process led to the implementation of voluntary and forced retrenchments that are set to conclude at the end of June. The main objective of these changes is to right size the business in line with the current market conditions. As communicated with the H1 F2017 interim results release, the financial impact of these retrenchments was not included in the market guidance provided as these could not be quantified at the time. The impact of the retrenchments will be included within the H2 F2017 results and additional guidance will be provided, should this be required, once the process has been completed. Revised Engineering & Construction structure Construction The South African and Rest of Africa Construction businesses will be led by the Executive Director of Construction, Mark Humphreys, who has been with the group for 29 years. He has fulfilled the role of Chief Operations Officer for the Engineering & Construction cluster for the last two years. EPC / Sector Peter de Vries, who has been with the group for 11 years and has significance experience in EPC contracting, will lead the EPC / sector-driven business. He will report directly to the acting CEO. This business will focus on Infrastructure, Energy, Plant and Process and Smart Cities / Town Development, all areas the group has significant experience in. Investments & Concessions and Manufacturing The group will continue to support and grow its annuity and cash-generating clusters of Investments & Concessions and Manufacturing. The strategic equity partnership with Aberdeen Infrastructure Funds, currently being implemented in the Investments & Concessions cluster and announced on the 5 th of December 2016, is progressing well with only a number of outstanding regulatory conditions to be met. Material Contract Update The Kpone Independent Power Plant (Kpone) project is now approaching its completion phase, with tight timelines to conclusion and a required contractual completion date in H1 F2018. As outlined with the F2017 interim results release in February 2017, certain design delays had been experienced together with certain tunnelling impact delays. Although these have continued to be managed well by the experienced project team, these delays will now affect the original completion date. These delays are not expected to negatively impact the contract’s profit recognition reported to date. The contract continues to receive focused senior and executive management attention in line with its contract size. Voluntary Rebuild Programme (VRP) As also announced in February 2017, the board opted to dispose of a minimum 40% economic interest to fulfil its VRP responsibility. Transaction advisors have been appointed to assist the Group in achieving this milestone at the earliest time possible. CEO Appointment The board process of appointing a permanent CEO is well underway. The board continues to support the acting CEO in the implementation of the required changes in the group and wishes management well. Johannesburg 3 May 2017 Sponsor NEDBANK CORPORATE AND INVESTMENT BANKING Date: 03/05/2017 09:34:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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