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AFRICAN RAINBOW CAPITAL INVESTMENTS LIMITED - Abridged Pre-listing Statement

Release Date: 28/08/2017 09:07
Code(s): AIL     PDF:  
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Abridged Pre-listing Statement

African Rainbow Capital Investments Limited
(Incorporated in the Republic of Mauritius)
(Company number: C148430)
JSE share code: AIL       ISIN: MU0553S00000
(“ARC Investments”)


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION OR
REQUIRE ARC INVESTMENTS TO TAKE ANY FURTHER ACTION

ABRIDGED PRE-LISTING STATEMENT

This abridged pre-listing statement ("Abridged Pre-listing Statement") relates to the listing of ARC Investments' Ordinary
Shares in the “Financials – Speciality Finance” sector of the Main Board of the Johannesburg Stock Exchange, with effect
from the commencement of trade on Thursday, 7 September 2017.

The information in this Abridged Pre-listing Statement has been extracted, in summarised form, from the full Pre-listing
Statement issued by ARC Investments on Monday, 28 August 2017. This Abridged Pre-listing Statement is not
complete and does not contain all of the information that investors should consider before subscribing for Offer
Shares. Prospective investors should read the Pre-listing Statement in its entirety, including the “Risk factors”
section in the Pre-listing Statement, which describes certain risk factors that should be considered before making
an investment decision.

This Abridged Pre-listing Statement is not and shall not constitute an offer, or an invitation or solicitation, to the public, to
acquire the Offer Shares in any jurisdiction, and is issued in compliance with the Listings Requirements for the purpose of
providing information to selected persons in South Africa and other jurisdictions, with regard to ARC Investments.

Capitalised words and expressions used in this Abridged Pre-listing Statement shall, unless expressly defined herein or
indicated otherwise by the context, bear the meanings given to them in the Pre-listing Statement.

1.  Offer particulars

    The Pre-listing Statement relates to separate private placements by way of offers for subscription by ARC
    Investments, subject to certain conditions, to (i) selected persons in South Africa who fall within one of the specified
    categories listed in section 96(1)(a) of the South African Companies Act and (ii) selected persons in South Africa,
    acting as principal, acquiring Ordinary Shares for a total acquisition cost of R1,000,000 or more, as contemplated
    in section 96(1)(b) of the South African Companies Act and to selected persons outside the United States in reliance
    on Regulation S, to whom the Offer will specifically be addressed, and only by whom the Offer will be capable of
    acceptance, of up to 223,147,060 Ordinary Shares in ARC Investments, comprising an aggregate of up to 22.4 per
    cent. of the total issued Ordinary Shares of ARC Investments at Listing. There shall neither be an over-allotment
    of shares in terms of the Offer, nor will there be any stabilisation activity.

    Concurrent with the Offer, the Cornerstone Investors have agreed to subscribe at the Offer Price on the Listing
    Date for 247,441,175 Ordinary Shares, in aggregate, comprising an aggregate of 24.8 per cent of the total issued
    Ordinary Shares of ARC Investments at Listing. The subscriptions by the Cornerstone Investors do not form part
    of the Offer.

    The Offer Price at which the Offer Shares will be offered for subscription will be R8.50 per Offer Share. The gross
    proceeds from the issue of the Offer Shares and the Cornerstone Subscription Shares receivable by ARC
    Investments are estimated to be c. R4,000 million. The net proceeds that will be received by ARC Investments from
    the issue of the Offer Shares and the Cornerstone Subscription Shares are estimated to be c. R3,924 million after
    deducting fees and estimated expenses payable by ARC Investments, which are expected to amount to c.
    R76 million (including cash that will be retained by ARC Investments for reasonable foreseeable operating
    expenses).

    Subject to certain conditions (including the JSE’s minimum free float requirement, as set out in the Listings
    Requirements, being attained), a primary listing of all of ARC Investments' issued Ordinary Shares has been
    granted by the JSE in the “Financials – Speciality Finance” sector on the Main Board of the Johannesburg Stock
    Exchange under the abbreviated name “ARCINVEST”, JSE code “AIL” and ISIN MU0553S00000 with effect from
    the commencement of trade on Thursday, 7 September 2017.

    On the Listing Date, the share capital of ARC Investments will comprise three classes of shares, of which there
    shall be 997,176,470 issued, listed Ordinary Shares (assuming that the Offer Shares are fully taken up and the
    subscriptions by the Cornerstone Investors are fully implemented), one issued, unlisted B Share and 5,000,000,000
    issued, unlisted C Shares. For further information in respect of the B Share and the C Shares, please see
    "Incorporation and share capital" in the Pre-listing Statement.
                                                                                                                                                           

2.  History of ARC and ARC Investments

    ARC is a South African registered investment holding company that seeks to utilise its empowerment credentials,
    balance sheet strength, the business track record of its leadership team and its brand to invest in financial services
    distribution businesses, to take strategic equity stakes in underlying financial services product providers and to
    acquire majority or significant minority interests in non-financial services businesses.

    ARC was founded in July 2015, and is a wholly-owned subsidiary of UBI. UBI was created in 2003 with the initial
    main purpose of building a broad-based Black-controlled investment entity as Sanlam's empowerment partner. In
    addition, the vision of UBI from the outset was to make a difference in the lives of ordinary South Africans by being
    a premier broad-based Black-owned and Black-controlled financial services group in South Africa.

    ARC Investments was registered and incorporated in Mauritius as a private company on 30 June 2017 under the
    Mauritian Companies Act, and was converted to a public company on 2 August 2017. ARC Investments is managed
    in Mauritius and holds a Category One Global Business Licence issued by the FSC.

    The main purposes of the establishment and proposed listing of ARC Investments are to:
    -  create a broad-based Black-controlled capital raising and investment vehicle of significant scale with a
       diversified indirectly held portfolio of investments;
    -  enable public-market investors to invest in ARC Investments and obtain an indirect exposure to a
       diversified pool of listed and unlisted B-BBEE assets though a listed investment vehicle; and
    -  enable ARC Investments to access capital markets, if required, to fund future expansion.

3.  Initial Portfolio Transfer

    The ARC Fund is an en commandite partnership established in South Africa, in which ARC Investments will hold
    99.95 per cent. of the Partnership Interest, and 100 per cent. of the Limited Partnership Interest.

    Prior to the Listing, the Initial Portfolio Interests will be transferred to the ARC Fund as a capital contribution at an
    Intrinsic Value of c. R4,476 million as part of the Initial Portfolio Transfer.

    The rationale for the Initial Portfolio Transfer is to seed the ARC Fund, with the Initial Portfolio Interests, the Funding
    Arrangements, the Portfolio Agreements and the Unimplemented Agreements. By virtue of the Initial Portfolio
    Transfer, upon Listing, Shareholders will have immediate exposure to ARC's established portfolio of investments.

    In the financial services sector, on implementation of the Initial Portfolio Transfer, the ARC Fund’s sole investment
    will be its 49.9 per cent. interest in FinHoldCo, an investment holding company mostly comprising equity stakes in
    businesses in the financial services sector. ARC will continue to hold the other 50.1 per cent. interest in FinHoldCo.

    In the non-financial services sector, the ARC Fund will generally hold its interests directly in the relevant Portfolio
    Companies although these interests may in some cases be held through intermediate companies.

    As set out under "Use of proceeds" in the Pre-listing Statement, if the Offer Shares are fully taken up and the
    subscriptions by the Cornerstone Investors are fully implemented, immediately after the Listing, ARC Investments
    will contribute to the ARC Fund c. R3,924 million in cash as a further capital contribution to the ARC Fund, using
    the net proceeds from the issue of the Offer Shares and the Cornerstone Subscription Shares.

    As at the Last Practicable Date, the ARC Fund intends to use c. R1.5 billion of the capital contribution which ARC
    Investments will make to the ARC Fund, to acquire additional Portfolio Interests in accordance with the
    Unimplemented Agreements (including, acquiring additional shares in Rain for c. R1.05 billion).

4.  Material Initial Portfolio Interests

    The table below sets out an analysis of the material Initial Portfolio Interests, which include the 10 largest
    investments that will be transferred to the ARC Fund pursuant to the Initial Portfolio Transfer.


                                                                                                 Acquisition      Intrinsic
                                                                                                 cost by ARC          Value        Intrinsic          Percentage
                                                                                  ARC Fund's                                           Value        of Intrinsic
                                                             Unlisted              effective                                       excluding        Value of the
    Initial Portfolio Company                                 /listed    Sector     interest                                       discounts             Initial
                                                                                (percentage)           (Rand          (Rand    marketability           Portfolio
                                                                                                    million)       million)     and minority           Companies



    Financial services

    Alexander Forbes
    Limited                                                  Unlisted                   4.99             375            288              377                  5%
    .....................................................
                                                                                                                             

    Alexander Forbes Group
    Holdings                                                   Listed                   1.45             130            127              127                  2%
    .....................................................

    ooba
                                                             Unlisted                  14.76              97             97              117                  2%
    ..................................................... 

    ARC Health -
    Afrocentric(i)                                             Listed                   2.93             104             83               98                  2%
    .....................................................

    Colourfield
                                                             Unlisted                  13.72              81             66               95                  1%
    .....................................................

    Indwe Broker
    Holdings                                                 Unlisted                  25.45              90             41               46                  1%
    .....................................................

    Other financial
    services                                                                               -             265            265              265                  5%
    .....................................................

    Total                                 financial
    services                                                 -      -                      -           1,141            967            1,123                 17%
    .....................................................

    Non-financial
    services
    .....................................................

    Rain                                                               Telecommunic
                                                             Unlisted  ation              20           1,708          1,708            1,708                 31%
    .....................................................              

    Afrimat                                                            Building and
                                                               Listed  Construction     18.4             506            656              772                 12%
    .....................................................              

                                                                        
    Elandsfontein                                                      Agriculture
                                                             Unlisted  and food           25             350            423              489                  8%
    .....................................................              production
                                                                        

    EOH                                                                Information
                                                              Listed   technology         1.7            359            314              314                  6%
    .....................................................              
                                                                        
    BKB                                                                Agriculture
                                                            Unlisted   and food           20             219            220              314                  4%
    .....................................................              production
                                                                        
    Acorn                                                              Agriculture
    Agri                                                    Unlisted   and food           15             212            212              212                  4%
    .....................................................              production

    Afrigem -
                                                                       Information
    Payprop(ii)                                             Unlisted   technology       46.4             133            146              175                  3%
                                                                        
    .....................................................

    Val de Vie
    Investments                                             Unlisted   Real estate        20             168            142              196                  3%
    .....................................................

    Humanstate                                                         
                                                            Unlisted   Information        10             139            139              139                  3%
    .....................................................              technology

    Other non-financial services                                                                         602            602              602                 11%

    Total                         non-financial
    services                                                                                           4,395          4,561            4,921                 83%
    .....................................................
    Total financial and non-
                                                                                                       5,535          5,528            6,044
    financial services
    Less Investment in Rain to be
    funded from proceeds from                                                                         -1,052         -1,052           -1,052
    Subscription
    Value of Initial Portfolio
                                                                                                       4,483          4,476            4,992
    Interests


Notes:

   (i) This valuation relates to Afrocentric only, which is held by FinHoldCo through ARC Health.
  (ii) This valuation relates to PayProp only, which is held by the ARC Fund through Afrigem. ARC, through Afrigem,
       owns 46.4 per cent. of PayProp.
    For further information on the asset valuations in relation to the ARC Fund, see Annexure A and Annexure B of the
    Pre-listing Statement.

5.  Directors’ valuation of the Initial Portfolio Interests

    The table below sets out the directors' valuation of the Invested NAV and Invested NAV per Ordinary Share based
    on the Intrinsic Value of the Initial Portfolio Interests on the Listing Date, prior to the issue of the Cornerstone
    Subscription Shares and the Offer Shares and the costs attributable to the Initial Portfolio:
                                                                                                                           

    R million                                                                               Intrinsic
                                                                                                Value
    Equity and shareholder loan                                                                 4,476
    investments
    ..................................................................................

    Cash                                                                                            -
    ..................................................................................

    Liabilities                                                                                     -
    ..................................................................................

    Invested                                                                                    4,476
    NAV
    ..................................................................................

    Issued Ordinary Shares (in                                                                526,588
    000's)(i)
    ..................................................................................

    Invested NAV per Ordinary Share                                                              8.50
    (Rand)
    ..................................................................................

    Note:
    (i)  To be issued pursuant to the Initial Portfolio Transfer and excluding the issue of Offer Shares and
         Cornerstone Subscription Shares.

6.  Key strengths of ARC Investments

    ARC Investments' investment proposition is based on:

    -  the unique opportunity to invest into a liquid listed vehicle that provides access to indirectly held unlisted
       investment opportunities typically unavailable to investors;

    -  its ability to benefit from the full range of credentials of ARC, ARC Investments, UBI, FinHoldCo and the
       General Partner, including B-BBEE credentials, the comprehensive experience and strong reputation of
       the members of the ARC investment team as well as the investment committee and the investment
       advisory committee of the General Partner, and the benefits of the ARC brand;

    -  the ARC Fund's ability to leverage off its own, ARC's and ARC Investments' B-BBEE credentials when
       making investments to negotiate an upfront discount to full market value based on its value contribution;

    -  ARC's demonstrable track record of deal execution having invested c. R5.4 billion in acquiring ARC's
       interests in the Initial Portfolio Companies since ARC was created in July 2015;

    -  providing indirect access to a diversified pool of investments in companies across various industries; and

    -  the structural efficiency of ARC Investments managing and conducting its business operations in Mauritius
       given the business-friendly environment, the spread of tax treaties that Mauritius has with many, but not
       all, of the jurisdictions that ARC Investments is expected to invest in and its acceptance among global
       investors as an investment jurisdiction as at the date of the Pre-listing Statement.

7.  Investment management structure

    The ARC Fund will be managed by the General Partner. The General Partner is 100 per cent. owned and controlled
    by UBI and accordingly is a Black-owned and controlled company.

    All the investment decisions of the ARC Fund will be taken by the General Partner through its investment committee
    or, subject to the terms of any delegations in place, its investment advisory committee. The ARC Fund's relationship
    with the General Partner is governed by the Partnership Agreement. The General Partner has, in turn, entered into
    the Investment Services Agreement with ARC, in terms of which ARC will assist the General Partner to source
    investment opportunities for the ARC Fund and provide certain administrative and back office support to the
    General Partner. ARC Investments, as the Limited Partner, will be a passive investor in the ARC Fund and it will
    play no role in the management or investment decisions of the ARC Fund.

    For further information on the Partnership Agreement, see "Material Contracts" and the Investment Services
    Agreement, see "Investment Services Agreement" in the Pre-listing Statement.
                                                                                                                       

8.  ARC Fund strategy

    By investing in a broad range of sectors and through a variety of types of listed and unlisted equity and financial
    instruments, the ARC Fund will generally seek to gain exposure to growth and early-maturity stage businesses in
    which management teams are appropriately incentivised. The ARC Fund will generally seek to acquire significant
    minority equity interests (but may in certain cases seek to acquire majority interests, or less significant minority
    interests) in established and start-up businesses that meet one or more of the following attributes:

    -  experienced, qualified and capable management;

    -  a demonstrable track record;

    -  strong cash flow generation;

    -  solid growth prospects;

    -  established market position;

    -  businesses with the opportunity to consolidate their respective markets and/or existing businesses within
       the ARC Fund portfolio; and/or

    -  businesses whose commercial prospects can be enhanced by having strong B-BBEE credentials.

    Where the ARC Fund holds majority or significant minority stakes in Portfolio Companies, the ARC Fund will where
    appropriate seek to provide broad strategic guidance to such companies. This will generally be provided through
    participation on their boards of directors.

    The ARC Fund has the flexibility to participate in opportunistic investments as and when they arise.

    The ARC Fund will focus on transactions in South Africa and other select countries in Africa. The ARC Fund may,
    however, invest in Portfolio Companies with interests and/or operations elsewhere in the world.

    The ARC Fund may be geared, as appropriate, in order to meet its investment strategy.

    The ARC Fund is evergreen and does not have a target size.

9.  ARC Investments' objectives

    ARC Investments’ medium to long-term objective is to grow its NAV by at least 16 per cent. per annum, risk
    adjusted, gross of dividend distributions, any management fees paid to the general partner of the ARC Fund and
    any performance participation. Each investment opportunity will be expected to exceed this minimum risk-adjusted
    return hurdle on a stand-alone basis (i.e., without taking into account potential synergy benefits that can be derived
    from being part of a diversified portfolio). The return threshold applicable to start-ups may be significantly higher
    than the 16 per cent. per annum hurdle, reflecting the higher risks attaching to such ventures relative to established
    businesses.

10. Management Fees

    In consideration for the General Partner's obligation to maintain the ARC Fund’s B-BBEE credentials, its ability to
    benefit from the UBI brand and management responsibility for the ARC Fund in terms of the Partnership Agreement,
    a Fund Management Fee of:

    (i)  where the Opening Invested NAV is below R10 billion, 1.75 per cent. per annum on the average of the Opening
         Invested NAV and Closing Invested NAV of that Quarter;
    (ii) where the Opening Invested NAV is between R10 billion and R15 billion, the higher of the amount determined
         in terms of (i) and 1.5 per cent. per annum on the average of the Opening Invested NAV and Closing Invested
         NAV of that Quarter;
    (iii)where the Opening Invested NAV is above R15 billion, 1.25 per cent. per annum on the average of the Opening
         Invested NAV and Closing Invested NAV of that Quarter,
    
    will be drawn down from the ARC Fund. The Invested NAV will be adjusted for investments and realisations during
    the quarter.

    The Fund Management Fee will be calculated by the General Partner and paid quarterly by the ARC Fund to the
    General Partner.

    With regard to Cash Management Investments made by the ARC Fund, in consideration for the management of
    such Investments by the General Partner in terms of the Partnership Agreement, a Cash Management Fee of
                                                                                                                                            

    0.25 per cent. per annum on the average of the opening and closing balance of each Cash Management Investment
    will be drawn down from the ARC Fund. The Cash Management Fee will be calculated and paid quarterly by the
    ARC Fund to the General Partner.

    For further information on the Fund Management Fee and Cash Management Fee, see "Fund Management Fee
    and Cash Management Fee" in the Pre-listing Statement.

11. Performance Participation

    The Performance Participation will be calculated annually based on the Growth in Invested NAV, subject to the
    Growth in Invested NAV% exceeding the Performance Hurdle (10 per cent. per annum) and the Invested NAV at
    the beginning of the measurement period not being less than the previous highest Invested NAV.

    Subject to the above, the number of C Shares that will automatically convert into Ordinary Shares will be determined
    by dividing the Performance Participation for the relevant annual measurement period by the Invested NAV plus
    cash per Ordinary Share at the end of that measurement period.

    A worked example of the calculation of Performance Participation is set out in Annexure J of the Pre-listing
    Statement.

    For further information on Performance Participation, see "Performance Participation" in the Pre-listing Statement.

12. Directors

    The details of the Directors are set out below:

                                                                                                                   Occupation/
    Name, age and nationality                                                       Business address               function
    Mark Cyril Olivier, 48, United                                                  Level 3, Alexander House       Independent non-
    Kingdom                                                                         35 Cybercity                   executive Director
    ...........................................................................     Ebène 72201                    (Chairperson)
                                                                                    Mauritius
    Deans Tommy Lo Seen Chong, 58,                                                  Level 3, Alexander House       Independent non-
    Mauritian                                                                       35 Cybercity                   executive Director
    ...........................................................................     Ebène 72201
                                                                                    Mauritius
    Yan Chong Ng Cheng Hin, 42,                                                     Level 3, Alexander House       Independent non-
    Mauritian                                                                       35 Cybercity                   executive Director
    ...........................................................................     Ebène 72201                    (alternate to Deans
                                                                                    Mauritius                      Tommy Lo Seen
                                                                                                                   Chong)
                                                                                                                     
    Sipho Abednego Nkosi, 63, South                                                 Level 3, Alexander House       Independent non-
    African                                                                         35 Cybercity                   executive Director
    ...........................................................................     Ebène 72201
                                                                                    Mauritius
    Clive Msipha, 35,                                                               Level 3, Alexander House       Independent non-
    Zimbabwean                                                                      35 Cybercity                   executive Director
    ...........................................................................     Ebène 72201
                                                                                    Mauritius
    Bridget Ntombenhle Radebe, 37, South                                            Level 3, Alexander House       Non-executive
    African                                                                         35 Cybercity                   Director
    ...........................................................................     Ebène 72201
                                                                                    Mauritius

13. Salient dates and times


                                                                                                                                        2017
    Opening time and date of the                                                                       09h00 on            Monday, 28 August
    Offer:
    ................................................................................................
    Publication of the Pre-listing Statement:                                                                              Monday, 28 August
    ................................................................................................
    ................................................................................................
                                                                                                                                                 

    Expected last time and date for indications of interest for                                        12h00 on          Monday, 4 September
    purposes of the
    bookbuild:
    ................................................................................................
    Successful applicants advised of allocations: .....................                                                  Monday, 4 September
    Final number of Offer Shares released on SENS:                                                                      Tuesday, 5 September
    ................................................................................................
    Final number of Offer Shares published in the press:                                                              Wednesday, 6 September
    ................................................................................................
    Expected Settlement Date and Listing Date on the                                                                   Thursday, 7 September
    Johannesburg Stock Exchange:
    ................................................................................................
    Notes:
    Any change will be released on SENS and published in the South African press.
    All references to time in this Abridged Pre-listing Statement are to South African Standard Time (SAST or
    GMT+2).

14. Copies of the Pre-listing Statement

    The Pre-listing Statement is only available in English and copies thereof may be obtained by persons invited to
    participate in the Offer during normal business hours from Monday, 28 August 2017 until Monday,
    4 September 2017 from ARC, ARC Investments and Rand Merchant Bank at their respective physical addresses
    which appear below:

    ARC:                                                         ARC Investments:                            Rand Merchant Bank:
    1st Floor, Marsh Building                                    Level 3, Alexander House                    1 Merchant Place
    Cnr Fredman Drive and Fifth                                  35 Cybercity                                Cnr Rivonia Road and Fredman Drive
    Street                                                       Ebène 72201                                 Sandton 2196
    Sandton 2196                                                 Mauritius                                   Johannesburg
    Johannesburg                                                                                             South Africa
    South Africa

    The Pre-listing Statement will also be available on ARC Investments' website at www.arci.mu.

Ebène, Mauritius (with simultaneous circulation in Johannesburg)

28 August 2017

Financial adviser, bookrunner and JSE sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited

Legal advisers
Webber Wentzel, legal and tax adviser to ARC Investments as to South African law
Linklaters LLP, legal adviser to ARC Investments as to English and US law
BLC Robert & Associates, legal and tax adviser to ARC Investments as to Mauritian law
DLA Piper South Africa Services Proprietary Limited, legal adviser to Rand Merchant Bank as to South African law

Independent reporting accountant
PricewaterhouseCoopers Inc.
                                                                                                                            

DISCLAIMER

The distribution of this Abridged Pre-listing Statement and the Pre-listing Statement and the Offer in certain jurisdictions
may be restricted by law. No action has been or will be taken by ARC, ARC Investments or Rand Merchant Bank to permit
a public offering of the Offer Shares in any jurisdiction. No action has been, or will be, taken to permit the possession or
distribution of this Abridged Pre-listing Statement and the Pre-listing Statement (or any other offering or publicity materials
or application form(s) relating to the Offer Shares) in any jurisdiction where action for that purpose may be required or
doing so is restricted by law. Accordingly, neither this Abridged Pre-listing Statement, the Pre-listing Statement, any
advertisement, nor any other offering material may be distributed or published in any jurisdiction except under
circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this
Abridged Pre-listing Statement and the Pre-listing Statement comes should inform themselves about, and observe, any
such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws or regulations of certain
jurisdictions. Further information with regard to the restrictions on the distribution of this Abridged Pre-listing Statement
and the Pre-listing Statement and the Offer is set out in "Selling and Transfer Restrictions" in the Pre-listing Statement.

The distribution of this Abridged Pre-listing Statement and the Pre-listing Statement and the making of the Offer may be
restricted by law. It is the responsibility of any person into whose possession this Abridged Pre-listing Statement and the
Pre-listing Statement comes to inform themselves about, and observe, any such restrictions. Any failure to comply with
any of those restrictions may constitute a violation of the applicable laws or regulations of certain jurisdictions. The Pre-
listing Statement does not constitute an offer of, or an invitation to acquire or subscribe for, any of the Offer Shares in any
jurisdiction in which such offer, subscription or purchase would be unlawful or require further action for such purpose.

In South Africa, the Offer will only be made by way of separate private placements to (i) selected persons falling within
one of the specified categories listed in section 96(1)(a) of the South African Companies Act and (ii) selected persons,
acting as principal, acquiring Ordinary Shares for a total acquisition cost of R1,000,000 or more, as contemplated in section
96(1)(b) of the South African Companies, and to whom the Offer will specifically be addressed, and only by whom the
Offer will be capable of acceptance, and this Abridged Pre-listing Statement and the Pre-listing Statement are only being
made available to such South African Qualifying Investors. The Offer and the relevant information that pertains to such
Offer in respect of each class of South African Qualifying Investor is combined in the Pre-listing Statement for the sake of
convenience only. Accordingly: (i) the Offer is not an offer to the public as contemplated in the South African Companies
Act; (ii) this Abridged Pre-listing Statement and the Pre-listing Statement do not, nor do they intend to, constitute a
“registered prospectus”, as contemplated by the South African Companies Act; and (iii) no prospectus has been filed with
the CIPC in respect of the Offer. As a result, this Abridged Pre-listing Statement and the Pre-listing Statement do not
comply with the substance and form requirements for a prospectus set out in the South African Companies Act and the
South African Companies Regulations of 2011, and has not been approved by, and/or registered with, the CIPC, or any
other South African authority. FinSurv and the JSE have approved the Pre-listing Statement.

The information contained in this Abridged Pre-listing Statement and the Pre-listing Statement constitutes factual
information as contemplated in section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act, 37
of 2002, as amended ("FAIS Act") and should not be construed as an express or implied recommendation, guide or
proposal that any particular transaction in respect of the Offer Shares or in relation to the business or future investments
of ARC Investments or the ARC Fund is appropriate to the particular investment objectives, financial situations or needs
of a prospective investor, and nothing in this Abridged Pre-listing Statement and the Pre-listing Statement should be
construed as constituting the canvassing for, or marketing or advertising of, financial services in South Africa. ARC
Investments is not a financial services provider licensed as such under the FAIS Act.

This Abridged Pre-listing Statement and the Pre-listing Statement are only being distributed to and is only directed at: (i)
persons who are outside the United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (“Order”); or (iii) high net worth entities
falling within Article 49(2)(a) to (d) of the Order; or (iv) persons to whom it may otherwise lawfully be communicated (all
such persons together being referred to as “Relevant Persons”). The Offer Shares are only available to, and any invitation,
offer or agreement to purchase or otherwise acquire such Offer Shares will be engaged in only with, Relevant Persons.
Any person who is not a Relevant Person should not act or rely on this Abridged Pre-listing Statement and the Pre-listing
Statement or any of its contents.

The Offer Shares have not been and will not be registered under the US Securities Act or under any securities law or
regulation of any state or other jurisdiction of the United States and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons (as defined in Regulation S).

The Offer Shares are being offered and sold outside of the United States in reliance on Regulation S.

Neither this Abridged Pre-listing Statement, the Pre-listing Statement nor any other information contained in them relating
to the Offer may be treated as a prospectus for the purpose of the Mauritian Securities Act 2005 or be released or issued
to the public in Mauritius or be used in connection with any offer to the public in Mauritius. Moreover, this Abridged Pre-
listing Statement and the Pre-listing Statement do not constitute an offer made to the public in Mauritius to subscribe for,
or purchase, the Offer Shares. Any Offer will only be made (i) to sophisticated investors as described under the Mauritian
Securities Act 2005, or (ii) by way of private placement to persons to whom the Offer is addressed and who make an
investment of a total cost of subscription of no less than ZAR1,000,000 for their own account.

In any member state of the European Economic Area (which includes the European Union, Iceland, Norway and
Liechtenstein) that has implemented the EU Prospectus Directive (each, a “Relevant Member State”), this communication
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is only addressed to and is only directed at qualified investors in that Relevant Member State within the meaning of the
EU Prospectus Directive.

This Abridged Pre-listing Statement and the Pre-listing Statement contains statements about ARC, ARC Investments, the
ARC Fund, the General Partner and/or the Initial Portfolio Companies that are or may be forward-looking statements. All
statements, other than statements of historical fact, are, or may be deemed to be, forward-looking statements, including,
without limitation, those concerning: strategy; the economic outlook for the industries in which ARC Investments, through
the ARC Fund, may invest; cash costs; operating results, investment prospects, results and performance, return on
investment, realisations, valuations; growth prospects and outlook for investments or funds, individually or in the
aggregate; liquidity, capital resources and expenditure; and the outcome and consequences of any investment strategy.
These forward-looking statements are not based on historical facts, but rather reflect current expectations concerning
future results and events and generally may be identified by the use of forward-looking words or phrases such as “believe”,
“aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”, “estimated”, “potential” or
similar words and phrases.

Examples of forward-looking statements include statements regarding a future financial position or future profits, cash
flows, corporate or investment strategy (including proposed investments), future or expected returns, future realisations,
and other economic factors, such as, among other things, interest and exchange rates. The forward-looking statements
contained in this Abridged Pre-listing Statement and the Pre-listing Statement, include statements relating to the ARC
Fund Investment to be made by ARC Investments and statements regarding the business objectives and strategies of the
underlying Portfolio Companies.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. ARC Investments cautions that forward-looking statements are not
guarantees of future performance. Actual results, returns, financial and operating conditions, liquidity and the
developments within the industries in which ARC Investments, through the ARC Fund, may invest may differ materially
from those made in, or suggested by, the forward-looking statements contained in this Abridged Pre-listing Statement and
the Pre-listing Statement.

All these forward-looking statements are based on estimates and assumptions, all of which estimates and assumptions,
although ARC Investments may believe them to be reasonable, are inherently uncertain. Such estimates, assumptions or
statements may not eventuate. Many factors (including factors not yet known to ARC Investments, or not currently
considered material) could cause the actual results, returns, performance or achievements of ARC Investments to be
materially different from any future results, performance or achievements expressed or implied in those estimates,
statements or assumptions including the factors set out in "Risk factors" in the Pre-listing Statement.

Investors should keep in mind that any forward-looking statement made in this Abridged Pre-listing Statement and the
Pre-listing Statement or elsewhere is applicable only at the date on which such forward-looking statement is made. New
factors that could cause the business of ARC Investments, or other matters to which such forward-looking statements
relate, not to develop as expected may emerge from time to time, and it is not possible to predict all of them. Further, the
extent to which any factor or combination of factors may cause actual results or matters to differ materially from those
contained in any forward-looking statement are not known. ARC Investments has no duty, and does not intend, to update
or revise the forward-looking statements contained in this Abridged Pre-listing Statement and the Pre-listing Statement
after the Last Practicable Date, except as may be required by law.

In considering any performance data contained in this Abridged Pre-listing Statement and the Pre-listing Statement, it
should be borne in mind that past or targeted performance is not indicative of future results, and there can be no assurance
that the ARC Fund will achieve comparable results or that target returns will be met. In addition, there can be no assurance
that unrealised investments will be realised at the valuations shown as actual. Realised returns will depend on, among
other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related
transaction costs, and the timing and manner of sale, all of which may differ from the assumptions on which the valuations
contained in this Abridged Pre-listing Statement and the Pre-listing Statement are based.

No representation or warranty, express or implied, is made by any person other than ARC Investments as to the accuracy,
completeness or verification of the information set out in this Abridged Pre-listing Statement and the Pre-listing Statement,
and nothing contained in this Abridged Pre-listing Statement and the Pre-listing Statement is, or shall be relied upon as, a
promise or representation in this respect, whether as to the past or the future. No person other than ARC Investments
assumes responsibility for this Abridged Pre-listing Statement's and the Pre-listing Statement's accuracy, completeness
or verification and all other persons accordingly disclaim, to the fullest extent permitted by applicable laws and regulations,
any and all liability whether arising in delict, tort, contract or otherwise that they might otherwise be found to have in respect
of this document or any such statement.

Rand Merchant Bank is acting exclusively for ARC Investments and no one else in connection with the Offer. It will not
regard any other person (whether or not a recipient of this document) as its client in relation to the Offer and will not be
responsible to anyone other than ARC Investments for providing the protections afforded to its clients nor for giving advice
in relation to the Offer or any transaction or arrangement referred to in this Abridged Pre-listing Statement and the Pre-
listing Statement.

In connection with the Offer, Rand Merchant Bank and any of its affiliates, acting as an investor for its own account, may
take up Ordinary Shares in the Offer and in that capacity may retain, purchase or sell for its own account such securities
and any Ordinary Shares or related investments and may offer or sell such Ordinary Shares or other investments otherwise
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than in connection with the Offer. Accordingly, references in this Abridged Pre-listing Statement and the Pre-listing
Statement to Ordinary Shares being offered or placed should be read as including any offering or placement of Ordinary
Shares to Rand Merchant Bank or any of its affiliates acting in such capacity. In addition, Rand Merchant Bank or its
affiliates may enter into financing arrangements (including swaps) with investors in connection with which Rand Merchant
Bank or its affiliates may from time to time acquire, hold or dispose of Ordinary Shares. Rand Merchant Bank does not
intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or
regulatory obligation to do so.

Date: 28/08/2017 09:07:00 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.

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