Category 1 transaction: dilution of investment in Prescient and withdrawal of cautionary announcement STELLAR CAPITAL PARTNERS LIMITED Incorporated in the Republic of South Africa (Registration number: 1998/015580/06) Share code: SCP ISIN: ZAE000198586 (“Stellar Capital”) CATEGORY 1 TRANSACTION ANNOUNCEMENT: DILUTION OF INVESTMENT IN PRESCIENT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Introduction and Terms of the Transactions Shareholders are referred to the cautionary announcement released on the Stock Exchange News Service (“SENS”) on 18 June 2018 wherein they were advised that Stellar Capital is a party to negotiations with an empowered entity to invest in Prescient Holdings (Pty) Ltd (“Prescient”) to further improve Prescient’s B-BBEE status. It was also disclosed that the potential investment by the empowered entity could result in a dilution of Stellar Capital’s shareholding in Prescient. Stellar Capital is pleased to announce that a binding term sheet has been concluded which will result in Prescient becoming an empowered entity with Prescient Empowerment Trust (Pty) Ltd (“PET”) ultimately becoming the controlling shareholder of Prescient. This will be achieved in a series of transactions: i) repurchases by Prescient of 50% of the shares currently held by Stellar Capital (“Prescient Repurchases”) for cash; ii) Sithega Holding (Pty) Ltd (“Sithega”), led by Mr Thabo Dloti, subscribing for additional shares in PET and becoming the controlling shareholder in PET; iii) the subscription of additional shares in PET by a staff share scheme; iv) the subscription of additional shares in Prescient by PET; and v) the exchange of Stellar Capital’s remaining shares in Prescient for an instrument in PET that will retain Stellar Capital’s effective 19.4% economic interest in the issued shares of Prescient, collectively referred to as the “Transactions”. The end result of the above mentioned series of transactions is that Prescient will become 71.5% owned by PET. The cash proceeds payable to Stellar Capital as a result of the disposal of half of its shares currently held in Prescient (per i) above) is approximately R384.5 million. The Prescient Repurchases of Stellar Capital’s shares together with the subscription of additional shares for the injection of capital in Prescient by PET will result in a dilution of Stellar Capital’s effective investment in Prescient from 49% to 19.4%. The effective date of the Transactions will be 1 April 2018 and the closing date will be the 3rd business day after all the relevant Conditions Precedent are fulfilled or waived. 2. Rationale With empowerment a key focus, Prescient and Stellar Capital have been searching for a suitable partner for Prescient. We believe that we have found this partner in Sithega which is led by Mr. Thabo Dloti, a well-respected executive boasting 25 years’ experience in running asset management and insurance businesses. On conclusion of the Transactions, Sithega will have an indirect controlling equity stake in Prescient, positioning Prescient as an eminent black-owned participant in the South African non-banking financial services market. Sithega will also actively participate in the Prescient strategy of scaling up the business. The Transactions will result in Stellar Capital reducing its material holding in Prescient for a cash consideration in excess of its most recent published valuation level. The proposed Transactions also enables Stellar Capital to retain a significant economic interest in an empowered Prescient as the business resets itself for the next step in its growth path. Stellar Capital will utilise the proceeds of the Prescient Repurchases to reduce levels of debt as part of the process to optimise its capital structure. 3. Nature of the Business of Prescient Prescient is a diversified, global financial services group with a 20-year track record of providing solutions to its clients in Asset Management, Investment Administration, Retirement Solutions, Stockbroking and Wealth Management. As at 31 March 2018 the group had R87 billion client assets under management (AUM) and more than R350 billion client assets under administration (AUA), split between asset admin of R246 billion and unit holder admin of R112 billion. 4. Conditions Precedent to the Transactions The Transactions are subject to the fulfilment or waiver of the following conditions precedent: 4.1. Approval of the Transactions by the shareholders of Prescient as may be required; 4.2. Approval of the Prescient Repurchases by the shareholders of Prescient in terms of section 48(8)(b) read with sections 114 and 115 of the Companies Act 71 of 2008 (“Companies Act”) as may be required; 4.3. All regulatory approvals being obtained as may be required in law (including any regulatory approvals required by the Takeover Regulation Panel, the Competition Authorities, the Jersey Financial Services Commission and the Central Bank of Ireland); 4.4. The conclusion between the parties of the appropriate comprehensive agreements; 4.5. Confirmation from an accredited B-BBEE ratings agency that Prescient and PET will be black-owned at the conclusion of the Transactions; and 4.6 Suitable protections being implemented for minority shareholders in Prescient and PET. 5. Warranties and Indemnities The Transactions are subject to warranties and indemnities that are normal for transactions of this nature including a commitment provided by Sithega that it will maintain BEE majority shareholding in PET for a minimum period ranging between five and ten years. 6. Net Assets and profits of Prescient The value of the net assets of Prescient as at 31 March 2018 amounts to R327.6 million (three hundred twenty-seven million and six hundred thousand rand). The profit after tax for the year ended 31 March 2018 attributable to Prescient is R86.9 million (eighty-six million and nine hundred thousand rand). This unaudited historical financial information for Prescient was prepared in accordance with International Financial Reporting Standards. 7. Categorisation The Transactions relating to Stellar Capital have been categorised as a category 1 transaction in terms of section 9.5(a) of the JSE Limited Listings Requirements. No circular or shareholders’ approval are required in terms of Stellar Capital’s Investment Policy as approved by the JSE Limited and Stellar Capital shareholders. 8. Withdrawal of cautionary announcement relating to the potential dilution of shareholding in Prescient The cautionary announcement released by Stellar Capital on SENS on 18 June 2018 is hereby withdrawn as it relates to Prescient. Shareholders are reminded that the cautionary announcement released on SENS on 18 June 2018 relating to the disposal process of Amecor and the cautionary announcement released on SENS on 9 July 2018 relating to the proposed delisting process of Torre Industries Limited have not been withdrawn and accordingly, caution is still required to be exercised by shareholders when dealing in the securities of Stellar Capital. 9. Further announcements Stellar Capital shareholders will be notified once the last of the Conditions Precedent have been fulfilled or waived. Cape Town 26 July 2018 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 26/07/2018 02:00:00 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.