Category 1 disposal of investment in Amecor 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” or “the Company”) CATEGORY 1 DISPOSAL OF INVESTMENT IN AMECOR AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Introduction Shareholders are referred to the cautionary announcement published on the Stock Exchange News Service on 18 June 2018 (and to the renewals thereof on 27 July 2018, 10 September 2018, 19 October 2018 and 30 November 2018) regarding the proposed disposal by the Company of the entire issued share capital of its investee company, Amalgamated Electronic Corporation Limited (“Amecor”). The Stellar Capital board of directors is pleased to announce that the Company has entered into a sale and purchase agreement (“Disposal Agreement”) with First Carlyle Growth V (“Carlyle”) through its wholly-owned subsidiary, K2018615178 (South Africa) Proprietary Limited (which is a special purpose entity) (“the Purchaser”) for the disposal of the entire issued share capital of Amecor (“Disposal”). The effective date of the Disposal will be the closing date thereof, which is expected to be on or about 31 March 2019 (“Closing Date”). 2. Consideration for the Disposal The cash proceeds payable to Stellar Capital, as a result of the Disposal, will be R413 million. The cash proceeds will escalate by 10% per annum in the event that the Closing Date is delayed beyond 31 March 2019. In addition, Stellar Capital will be entitled to pre-Closing Date dividends, amounting to R31 million in respect of the financial period 1 July 2018 to the Closing Date. 3. Rationale for the Disposal Stellar Capital received a number of unsolicited expressions of interest to acquire Amecor at attractive valuations earlier this year and decided to undertake a formal disposal process in respect of its 100% interest in Amecor. The Disposal will result in a capital profit of R144 million for Stellar Capital, which represents a significant return on capital deployed, in addition to R90 million of dividends received during the holding period (29 months). Stellar Capital will utilise the proceeds of the Disposal to redeem its preference shares and to optimise its capital structure going forward. 4. Nature of the business of Amecor Amecor offers a range of exclusive technologies relating to security, electronics and networks. Amecor’s core activities comprise of: • The manufacture and supply of sophisticated security transmission technology and applications; • A national distribution arm providing country-wide access to Amecor’s vast array of security and electronic products; and • A licenced Radio Frequency and GSM global network for data transmission and off-site equipment and/or security control. 5. Conditions Precedent to the Disposal The Disposal is subject to the fulfilment or waiver (where applicable) of the following outstanding conditions precedent: 5.1 That the Purchaser obtains warranty and indemnity insurance (refer to paragraph 6 below); 5.2 Certain due diligence items identified and notified by Stellar Capital to the Purchaser prior to the signature date being rectified to the satisfaction of the Purchaser, acting reasonably; 5.3 A mortgage bond registered over a property owned by the Amecor group (and in respect of which there is no outstanding liabilities) being cancelled; 5.4 The Purchaser entering into finance agreements to procure borrowings to partially finance the Disposal consideration; 5.5 Change of control consents and cession and transfer being received from certain customers and suppliers; 5.6 The Purchaser obtaining approval for certain radio frequency spectrum and class electronics communications networks licences from the Independent Communications Authority of South Africa; 5.7 The Purchaser procuring all approvals from the Financial Surveillance Department of the South African Reserve Bank under its Exchange Control Regulations, to the extent required for the implementation of the Disposal; 5.8 In terms section 119(6) of the Companies Act, 71 of 2008 (“Act”), the Purchaser being granted exemption by the Takeover Regulation Panel from compliance with Parts B and C of Chapter 5 of the Act and the Takeover Regulations, 2011; and 5.9 The Disposal being unconditionally approved by any relevant competition and/or anti-trust authorities in South Africa or elsewhere, or conditionally approved on terms and conditions acceptable to each of the Purchaser and Stellar Capital. 6. Warranties and indemnities The Disposal is subject to warranties and indemnities that are normal for a transaction of this nature. The obtaining of a warranty and indemnity insurance policy by the Purchaser, which is a condition precedent to the Disposal, shall provide for limited recourse to Stellar Capital in respect of any warranty claims. 7. Net assets and profits of Amecor The consolidated value of the net assets of the Amecor group as at 31 March 2018 amounted to R120 million (one hundred and twenty million rand). The profit after tax for the year ended 31 March 2018 attributable to the Amecor group was R42 million (forty-two million rand). This audited historical financial information for Amecor was prepared in accordance with International Financial Reporting Standards. 8. Categorisation The Disposal has 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. 9. Withdrawal of cautionary announcement In light of the information contained in this announcement, it is no longer necessary for shareholders to exercise caution when dealing in their Stellar Capital shares and the cautionary and renewal of cautionary announcements released by the Company are accordingly hereby withdrawn. 10. Further announcement Stellar Capital shareholders will be notified once the last of the conditions precedent to the Disposal have been fulfilled or waived (as applicable). Cape Town 14 December 2018 Financial adviser and sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Legal adviser Cliffe Dekker Hofmeyr Date: 14/12/2018 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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