ANDULELA INVESTMENT HOLDINGS LIMITED - Andulela Investment Holdings Limited - Scheme of Arrangement and possible Delisting

Andulela Investment Holdings Limited - Scheme of Arrangement and possible Delisting

Andulela Investment Holdings Limited 
(Incorporated in the Republic of South Africa) 
(Registration number: 1950/037061/06)
JSE share code: AND ISIN: ZAE000172870
("Andulela" or "the Company")

Newshelf 1005 Proprietary Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/028867/07) 
("Newshelf" or "the Offeror")

Joint announcement of a firm intention to make an Offer to acquire all of 
the issued ordinary shares in Andulela, other than the shares held by Newshelf 
or related parties, via a Scheme of Arrangement or Conditional Standby Offer 
and the proposed delisting of Andulela

1. Introduction
Andulela shareholders ("Shareholders") are advised that the Board of Andulela 
("the Board") has received a binding offer from Newshelf to acquire all of the 
issued ordinary shares in Andulela ("Scheme Shares") which are held by the 
shareholders of Andulela other than the Offeror or related parties ("Eligible 
Shareholders"). The Board has resolved that it will propose a scheme of 
arrangement as contemplated in section 114(1)(e) of the Companies Act, 71 of 
2008, as amended from time to time ("Companies Act") and paragraph 1.17(b) of 
the JSE Listings Requirements ("Listings Requirements"), between Andulela and 
its Shareholders ("Scheme") in terms of which, if implemented the Offeror will 
acquire all the Scheme Shares for a cash consideration of R3,00 (three Rand only) 
per Scheme Share ("Scheme Consideration"). The Eligible Shareholders currently 
own 2 734 281 (3,12%) ordinary shares in the Company.

The Offeror has resolved to make a conditional standby offer (the "Standby Offer"), 
as contemplated in section 117(1)(c)(v) of the Companies Act and paragraph 1.15(c) 
of the Listings Requirements to the Eligible Shareholders to acquire all the 
ordinary shares that it or the related parties do not already own 
("Standby Offer Share") for a cash consideration of R3.00 (three Rand only) 
("Standby Offer Consideration"), per Standby Offer Share should the Scheme not be 
approved by the Eligible Shareholders.

The Scheme and Standby Offer will be proposed concurrently on the basis that the 
implementation of the Standby Offer will be conditional upon, inter alia, the 
Eligible Shareholders approving the delisting of the Company ("the Delisting") and 
the Scheme not becoming operative. In this regard, the Offeror has submitted a 
firm intention offer letter to Andulela dated 10 February 2020 in relation to the 
Standby Offer.

The Scheme will be subject to the fulfilment or waiver of the conditions precedent 
set out in paragraph 3.2 below ("Scheme Conditions") and the Standby Offer will be 
subject to the fulfilment or waiver of the conditions precedent set out in 
paragraph 3.4 below ("Standby Offer Conditions").

The purpose of this joint firm intention announcement ("Firm Intention
Announcement") is to, inter alia, advise Andulela Shareholders of the terms
and conditions of the Scheme and Standby Offer (together, "the Proposed
Transaction").

2. Rationale for the Scheme and Standby Offer
The Offeror and the Board believe that the Company has not derived any material 
benefits from being in the listed environment, having not garnered institutional 
shareholder support to justify the regulatory processes, Listings Requirements, 
compliance- and associated costs with being a listed entity.

The Proposed Transaction will provide Eligible Shareholders with an opportunity 
to dispose of their Scheme Shares for cash at a substantial premium and with 
manageable transaction risk. Accordingly, the Independent Board believes that it 
is in the interests of the Company and the Eligible Shareholders that they be 
given an opportunity to consider the Offer.

3. Salient terms of the Scheme and Standby Offer
The Scheme and the Standby Offer each constitute an "affected transaction"
as defined in sections 117(1)(c)(iii) and 117(1)(c)(v) of the Companies Act
respectively, and as such the Scheme and Standby Offer are regulated by the 
Companies Act and the Companies Regulations, 2011 (the "Companies Regulations"). 
The salient terms of and other information pertaining to the Scheme and Standby 
Offer are set out below: 3.1 Scheme
The Scheme will be proposed by the Board between Andulela and the Eligible
Shareholders.

In the event that the Scheme becomes operative, the listing of all of the Shares 
on the Johannesburg Stock Exchange ("JSE") will be terminated, and Eligible 
Shareholders, excluding those Eligible Shareholders who validly exercise their 
appraisal rights in accordance with section 164 of the Companies Act as a 
consequence of the approval of the Scheme and whose shareholder rights have not 
been reinstated as envisaged in sections 164(9) and 164(10) of the Companies Act 
or who have not been ordered by any South African High Court ("the Court") to 
withdraw their demands in terms of section 164(15)(c)(v)(aa) of the Companies Act 
("Scheme Participants"), will be deemed to have disposed of all of their Scheme 
Shares at the Scheme Consideration, such that the Offeror will acquire all of the 
Scheme Shares previously held by the Scheme Participants.

3.2 Scheme Conditions
The Scheme is subject to the fulfilment or waiver, as the case may be, of the 
following Scheme Conditions on or before 15 May 2020 (or such other date as the 
Offeror and Andulela may agree to in writing, with approval of the Takeover 
Regulation Panel ("TRP"):
3.2.1 approval by the Eligible Shareholders of the Scheme as is contemplated by 
section 114, read with section 115, of the Act. To the extent required, approval 
by the Court of the implementation of such resolution in terms of section 115(2)(c) 
and/or section 115(3) of the Act; and if applicable, Andulela not having treated 
the aforesaid resolution as a nullity, as contemplated in section 115(5)(b) of 
the Act;
3.2.2 the receipt of all approvals, consents or waivers from those South African 
regulatory authorities as may be necessary for Andulela to implement the Scheme 
and Delisting, including the JSE and TRP (on an unconditional basis). Provided 
that if any such approval, consent or waiver is granted subject to any condition 
or qualification, then the Offeror and Andulela must agree to the imposition of 
such condition or qualification in writing, in which event the approval, consent 
or waiver will be regarded as having been granted; and
3.2.3 The TRP has issued a compliance certificate in respect of the Scheme in 
terms of section 119(4)(b) of the Companies Act, provided that if such compliance 
certificate is issued conditionally or on terms, this condition shall not be 
regarded as having been fulfilled unless the party which is or parties which are 
affected by such conditions or terms, confirm/s in writing (by not later than 
the said date and time) that such conditions and terms are acceptable to it/them, 
acting reasonably.

The above conditions cannot be waived and time periods for the fulfilment of 
such conditions cannot be extended unless agreed to in writing by Andulela and 
the Offeror.

3.3 The Standby Offer
Simultaneously with the Scheme, the Offeror will make a separate but concurrent 
Standby Offer, in terms of section 117(1)(c)(v) of the Companies Act and 
paragraph 1.15(c) of the Listings Requirements, to the Eligible Shareholders, 
whereby each Eligible Shareholder will be entitled to elect whether or not to 
dispose of all of their Standby Offer Shares to the Offeror for the Standby 
Offer Consideration.

If the Standby Offer becomes wholly unconditional and is implemented, then the 
listing of all the Andulela Shares on the JSE will be terminated and each 
Eligible Shareholder that has accepted the Standby Offer ("Standby Offer 
Participants") will receive the Standby Offer Consideration and dispose of their 
Standby Offer Shares. Eligible Shareholders who have not accepted the Standby 
Offer, subject to the provisions of section 124(1) of the Companies Act as set 
out below, will remain shareholders in Andulela, which will become an unlisted 
subsidiary of the Offeror, and the tradability of their Andulela Shares will 
be limited.

In the event that the Standby Offer is implemented and accepted by Eligible 
Shareholders holding at least 90% of the Standby Offer Shares, the Offeror may, 
at its election, invoke the provisions of section 124(1) of the Companies Act, 
to compulsorily acquire all of the Standby Offer Shares not already tendered 
by the Eligible Shareholders.

3.4 The Standby Offer Conditions
Implementation of the Standby Offer will be subject to the fulfilment or
waiver of the following conditions by no later than 17h00 (South African time) 
on 15 May 2020, or such later date as Andulela, and the Offeror agree on in 
writing on or before such date:
3.4.1 the Scheme does not become operative;
3.4.2 approval by Eligible Shareholders of an ordinary resolution to approve 
the Delisting in terms of paragraphs 1.15(a) and 1.16 of the Listings 
Requirements ("Delisting Resolution"); and
3.4.3 the receipt of all approvals, consents or waivers from those South African 
regulatory authorities as may be necessary for Andulela to implement the Standby 
Offer and Delisting, including the JSE and TRP (by means of issue of a compliance 
certificate in terms of section 121(b)(i) of the Companies Act) on an 
unconditional basis. Provided that if any such approval, consent or waiver is 
granted subject to any condition or qualification, then the Offeror and Andulela 
must agree to the imposition of such condition or qualification in writing, 
in which event the approval, consent or waiver will be regarded as having 
been granted.

The Offeror shall be entitled to waive (in whole or in part) in writing the 
Standby Offer Conditions stipulated in paragraphs 3.4.2. The Standby Offer 
Conditions stipulated in paragraphs 3.4.1 and 3.4.3 are not capable of waiver.

3.5 Scheme Consideration and Standby Offer Consideration
Trading in the shares of the Company on the JSE is limited. The share price
has been at or around one cent per share for most of the past 12 months. The 
Scheme Consideration and Standby Offer Consideration is therefore at a 
significant premium to the price at which shares in the Company have traded 
for the past twelve months.

4. Termination events
The Scheme and/or Standby Offer, as the case may be, will terminate with
immediate effect, if any or all of the Scheme Conditions or Standby Offer
Conditions have not been fulfilled or waived on or before the relevant
date/s for fulfilment or waiver.

5. Independent Board, Independent Expert and recommendations
The Board has constituted an independent board ("Independent Board") as
required by the Companies Regulations, represented by Messrs MJ Husain, BW
Smith, PE du Preez and NMS Hadjee, to consider, inter alia, the terms and
conditions of the Scheme and Standby Offer.

The Independent Board has appointed Merchantec Proprietary Limited 
("the Independent Expert") to provide the independent expert opinion to be 
prepared in respect of the Scheme and Standby Offer in accordance with 
Regulation 90(6), as read with sections 114(2) and 114(3) of the Companies 
Act and paragraph 1.15(d) as read with Schedule 5 of the Listings 
Requirements ("Independent Expert Report").

The recommendation of the Board and the Independent Expert Report will be 
included in the Circular (as envisaged in paragraph 8 below).

The directors of Andulela do not own any shares in the Offeror or related 
parties.

6.The delisting
The listing of the Andulela Shares on the JSE will be terminated subject
to:
6.1 the Scheme becoming operative; or
6.2 the Resolution for the Delisting being approved by the requisite 
majority of Eligible Shareholders at the General Meeting and the Standby 
Offer being implemented.

7. Financial effects of the Scheme
The impact of the Scheme has been calculated and the Board can confirm that 
the implementation of the Scheme will only impact the financial information 
of Andulela as follows:
7.1 once-off transaction costs of approximately R2,5 million or 2,85 cents 
per ordinary share, payable out of working capital; and
7.2 Significant ongoing savings to the costs related to being listed will 
also be achieved once delisted.

8. Circular and salient dates
Andulela and Newshelf will issue a combined circular to Shareholders,
containing full terms and conditions of the Scheme and Standby Offer and a
notice to convene the General Meeting ("Circular").

The Circular is expected to be posted on or about Thursday, 12 March 2020.

9. Cash confirmation
In compliance with regulation 111(4)(b) of the Companies Regulations, the
Offeror has provided the Company with the necessary confirmation from 
Ulrich Roux and Associates Incorporated that sufficient cash is held in 
favour of the Eligible Shareholders for the sole purpose of discharging the 
Scheme Consideration or the Standby Offer Consideration. The aggregate cash 
consideration amounts to R8 202 843.

10. The Independent Board and Board Responsibility Statement
The Board and the Independent Board:
10.1 accepts responsibility for the information contained in this announcement;
10.2 confirms that to the best of each member's respective knowledge and 
belief, the information contained in this announcement relating to Andulela is 
true; and
10.3 confirms that this announcement relating to Andulela does not omit 
anything likely to affect the importance of the information relating to the 
Scheme and Standby Offer.

11. Newshelf Responsibility Statement
Newshelf:
11.1 accepts responsibility for the information contained in this
announcement;
11.2 confirms that to the best of each member's respective knowledge and belief, 
the information contained in this announcement relating to Newshelf is true; and
11.3 confirms that this announcement relating to Newshelf does not omit anything 
likely to affect the importance of the information relating to the Scheme and 
Standby Offer.

Sandton
14 February 2020

Corporate Advisor and Sponsor to Andulela
Bridge Capital Advisors Proprietary Limited


Legal Advisors to Andulela
Chris Boulle Inc

Independent Expert
Merchantec Capital

Date: 14-02-2020 12:50:00
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