Wrap Text
Update Regarding JSE Suspension And Dividend – Correction And Legal Position
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
(“Labat Africa” or “the Company”)
ISIN Code: ZAE000018354 Share Code: LAB
FSE Code: LEI 9845000R73DF5EE41J88
UPDATE REGARDING JSE SUSPENSION AND DIVIDEND – CORRECTION AND LEGAL POSITION
Shareholders are referred to the announcement released by the Johannesburg Stock
Exchange (“JSE”) on 26 August 2026 regarding the immediate suspension of the listing of
Labat Africa’s securities (“JSE Suspension Announcement”). The Board wishes to provide
shareholders with an update regarding the Company’s current financial position and the
Board’s decision regarding the previously declared dividend.
1. JSE SUSPENSION AND DIVIDEND
The Company acknowledges the JSE Suspension Announcement and remains committed
to engaging constructively with the JSE to establish a clear and practical pathway towards
resolving the circumstances giving rise to the suspension.
On 23 June 2026, the Company declared a maiden dividend. At the time of declaration,
the Company had approximately 2.2 billion shares in issue. The Board considered the
Company’s financial position and applied the solvency and liquidity test contemplated in
sections 4 and 46 of the Companies Act, 2008 (Act 71 of 2008) (the “Companies Act”).
Based on the information available at that time, the Board was satisfied that the Company
could lawfully make the proposed distribution.
Following the declaration, the Company issued approximately 900 million additional shares.
Those shares fell within the applicable dividend timetable and ranked for the declared
dividend. The resulting increase in the dividend obligation was material and was not
contemplated when the original solvency and liquidity assessment was undertaken.
The Board acknowledges that it failed to appreciate the effect of the additional share issue
on the dividend obligation. The legal opinion obtained by the Company records that this
resulted in the distribution contemplated being materially different from the distribution
subjected to the original assessment, with the issue engaging the directors’ duties under
section 76(3)(c) of the Companies Act.
2. IMPACT OF SUSPENSION ON THE COMPANY’S FINANCIAL POSITION
Following the suspension, the Company experienced a further material deterioration in its
liquidity position. Certain creditors and funding providers withdrew or reduced facilities,
required repayment and/or otherwise restricted access to working capital.
These developments placed additional pressure on the Company’s ability to fund its
ordinary operations and materially reduced its ability to incur further indebtedness for the
purpose of satisfying the outstanding dividend claim.
The Board’s present priority is to preserve the Company’s operating capacity, protect its
underlying asset value and rebuild its financial position. The Board considers that taking
actions which would further impair the Company’s solvency or liquidity would not be
consistent with preserving the underlying value of the Company for shareholders.
3. COMPANIES ACT PROHIBITION ON THE DIVIDEND PAYMENT
The Company has obtained legal advice regarding the legal consequences of the
changed circumstances. The legal opinion concludes that, once it no longer reasonably
appeared that the Company would satisfy the solvency and liquidity test immediately after
completing the proposed distribution, section 46(1)(b) of the Companies Act prohibited the
Company from making the distribution.
Accordingly, the Company wishes to correct the record: the non-payment of the dividend
was not a discretionary decision by the Board to withhold a dividend which the Company
was lawfully able to pay. On the legal position advised to the Company, the Company was
prohibited by section 46(1)(b) from making the payment once the solvency and liquidity
test could no longer be satisfied.
The Company therefore considers the Companies Act prohibition to be the primary legal
reason why the dividend could not be paid when payment fell due. The subsequent
suspension and the withdrawal or reduction of creditor and funding facilities materially
worsened the Company’s liquidity position, but those events occurred after the point at
which the statutory prohibition on payment had already arisen.
The Board has concluded that, in the Company’s present circumstances, incurring
substantial additional debt principally to fund the dividend could place further pressure on
the Company’s solvency and liquidity and impair its ability to meet its other financial and
operating obligations.
The Board further believes that it would not be appropriate to continue creating an
expectation in the market that the dividend can be paid when the Company is presently
unable to provide a reasonable basis for such assurance. The Company considers it
preferable to communicate its financial position openly and transparently to shareholders.
4. CORRECTION OF PREVIOUS ANNOUNCEMENTS
The Company acknowledges that certain communications issued to the market and to the
JSE, including the announcement on the 30 July 2026 (“Previous Announcement”) and
correspondence to the JSE on the 3 August and 11 August 2026, stated that the Board
remained fully committed to paying the declared dividend in full and created an
expectation that the dividend would be paid.
Considering the legal advice now obtained, the Company acknowledges that those
statements did not accurately record the operative legal position.
The Company accepts responsibility for the earlier communications and considers it
important that the market record is corrected promptly and transparently. This correction is
made in accordance with the principle in paragraph 1.2(e) of the JSE Listings Requirements
that false, misleading or deceptive information, or a material omission, be remedied
forthwith.
The Company also wishes to place on record the legal position detailed in paragraph 3 of
this announcement following the Company’s inability to fulfil the dividend payment as
announced on SENS on 23 June 2026, leading to the postponement of the payment as
announced on SENS on 30 July 2026 and the JSE’s instruction on5 August 2026, to remedy
the non-payment by immediately effecting payment of the dividend and, failing that,
transfer the dividend amount to STRATE pending payment.
The Company recognises and respects the JSE’s regulatory mandate and its obligation to
protect the integrity of the market. However, having regard to the legal opinion obtained
by the Company, the instruction to effect payment must be reconsidered in light of section
46(1)(b) of the Companies Act, which, on the facts applicable to the Company, prohibited
the Company from making the distribution once the solvency and liquidity test could no
longer be satisfied.
5. ENGAGEMENT WITH THE JSE AND CREDITORS
Labat remains committed to complying with the JSE Listings Requirements, the Companies
Act, the Financial Markets Act and all other applicable regulatory requirements.
In parallel, and recognising the importance of protecting the interests and underlying value
of all shareholders, the Company is preparing a proposal for engagement with the JSE
which is intended to address the position arising from the non-payment of the dividend and
to provide an appropriate mechanism through which the interests and rights of affected
shareholders may be recognised and preserved. The Company intends to present this
proposal to the JSE for consideration, subject to applicable law, regulatory requirements
and the necessary approvals.
The Company will also continue its recovery and stabilisation programme, including
engagement with creditors and funding providers, cost and cash-preservation measures,
and the evaluation of appropriate funding and strategic opportunities which do not create
an unsustainable additional debt burden.
The Board recognises the uncertainty and disappointment experienced by shareholders.
The Company accepts responsibility for the oversight concerning the additional share issue
and for correcting the earlier communications which did not accurately reflect the
subsequent legal position. At the same time, the Board considers it essential that the
Company does not take action which would itself contravene the Companies Act or
materially prejudice the Company and, ultimately, its shareholders.
The Company will continue to engage with the JSE, its Sponsor and all relevant stakeholders
and will provide further updates through SENS as material developments are sufficiently
finalised and are required to be disclosed in accordance with the JSE Listings Requirements.
6. RECOVERY AND STABILISATION OF THE COMPANY
The Company will now focus its available financial and operational resources on stabilising
the business, preserving liquidity, rebuilding creditor and shareholder confidence and
strengthening its balance sheet.
The Company will engage with existing creditors and funding providers regarding the
restoration or restructuring of appropriate working-capital facilities and will continue to
evaluate alternative funding and strategic investment opportunities that can strengthen
the Company without creating an unsustainable debt burden.
Management will also undertake appropriate cost-control and cash-preservation measures
and review the Company’s assets, investments and operations with the objective of
improving cash generation and protecting long-term shareholder value.
The Company will continue to assess strategic opportunities that can strengthen its
underlying asset base and financial position, subject to all applicable regulatory,
shareholder and Sponsor requirements.
JOHANNESBURG
23 September 2026
JSE Sponsor
Vunani Sponsors
Date: 23/09/2026 11:04:00
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.
Sharenet Sites 
