Announcement in relation to the disposal of the group's joint venture interest in Group Five Pipe 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") ANNOUNCEMENT IN RELATION TO THE DISPOSAL OF THE GROUP’S JOINT VENTURE INTEREST IN GROUP FIVE PIPE 1. INTRODUCTION Shareholders are advised that the Company has entered into a sale of business agreement (“the Transaction Agreement”) with LB Pipes Proprietary Limited (“LB” or “the Purchaser”), pursuant to which LB will acquire the Group’s 50% share in its steel pipe business, Group Five Pipe, for a total cash consideration of R80 million ("the Transaction"). 2. THE TRANSACTION 2.1. Rationale for the Transaction As set out in the announcement released by the Group on the Stock Exchange News Service of the JSE Limited on 7 November 2017, although the Manufacturing cluster (which includes Group Five Pipe) remains a strong performer within the Group and contributes solid earnings and cash flow, it is regarded as a non-core operation and, in light of the Group’s revised strategy, will be disposed of in due course. Group Five Pipe manufactures large bore spiral-welded steel pipes for mainly water transport systems. LB is owned 51% by a black industrialist, 26% by Marine Civil Proprietary Limited (“Marine Civils”) and 23% by the Industrial Development Corporation (“IDC”). The disposal sale, at fair value as a going concern, into a predominantly black owned company retains the engineering skills of Marine Civils alongside the financial backing of the IDC. 2.2. Salient terms of the Transaction In terms of the Transaction Agreement, Group Five will dispose of its stake in the Group Five Pipe Joint Venture (being a 50% share in the unincorporated joint venture with Marine Civils held by Group Five Construction Pty Ltd (“G5C”)) for a total cash consideration of R80 million. In addition, the Group will receive a cash distribution of at least R25 million, being its share of the cash available in the joint venture in excess of the minimum working capital required in terms of the Transaction Agreement. The Transaction proceeds will be retained by G5C and applied to that entity as required. The effective date of the Group Five Pipe transaction is 1 November 2017, with the ownership transfer effective on the first date after the conditions fulfilment date. 2.3. Conditions precedent The implementation of the Transaction is subject to the fulfilment by 15 December 2017, or waiver, as the case may be, of the following remaining material conditions precedent: - resolution by the various parties’ Board of Directors, authoring the conclusion and implementation of the Transaction; - Competition Commission Authority approval; - the Purchaser being registered as a VAT vendor; - each counterparty to any contract being executed by the business accepts the change in ownership; - completion by the Purchaser of a due diligence; and - proof of the Purchaser’s ability to timeously meet its payment and delivery obligations. 2.4. Net assets and operating profits of the Group’s share in Group Five Pipe Group Five’s 50% share in the audited net asset value of the Group Five Pipe Joint Venture as at 30 June 2017 was R46,6 million and its share of the audited operating profit for the year ended 30 June 2017 was R13 000. The group’s share of the audited operating profit for the year ended 30 June 2016 was a R5,4 million loss. The audited results were prepared in accordance with the framework concepts and the recognition and measurement criteria of International Reporting Standards (IFRS). 3. CATEGORISATION The Transaction is classified as a Category 2 transaction in terms of the JSE Limited Listings Requirements, and accordingly no shareholder approval is required. Johannesburg 22 November 2017 Transaction Sponsor THE STANDARD BANK OF SOUTH AFRICA LIMITED Legal Advisor WERKSMANS ATTORNEYS Sponsor NEDBANK CORPORATE AND INVESTMENT BANKING Date: 22/11/2017 02:45:00 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.