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Announcement regarding Capitalworks’ shareholding in RFG and dealings in securities by associates of directors
RFG Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2012/074392/06)
Share code: RFG
ISIN: ZAE000191979
("RFG")
ANNOUNCEMENT REGARDING CAPITALWORKS’ SHAREHOLDING IN RFG AND DEALINGS IN
SECURITIES BY ASSOCIATES OF DIRECTORS
1. INTRODUCTION
Capitalworks Private Equity Advisor Proprietary Limited, on behalf of funds that it advises or that
co-invests alongside such funds ("Capitalworks"), has been a significant, long-term investment
partner of RFG, pre-dating RFG's listing on the exchange operated by the JSE Limited ("JSE") in
2014 when Capitalworks, through its related (controlled) entities, retained a c.40% shareholding in
RFG following RFG's initial public offering. The related entities through which Capitalworks holds
such a controlling interest in RFG are South African en-commandite partnerships which have
reached the end of their tenure, thus necessitating a restructure of Capitalworks' shareholding in
RFG.
As RFG shareholders ("Shareholders") may be aware, Capitalworks' shareholding in RFG has, to
date, been held by and through:
(i) Capitalworks Private Equity GP Proprietary Limited ("Capitalworks PE GP"), as general
partner ("GP") of Capitalworks Rhodes Food Investment Partnership ("Capitalworks
RFIP"); and
(ii) South African Investment GP Trust ("Capitalworks Trust GP"), as GP of Capitalworks
Rhodes Food Investment Partnership II ("Capitalworks RFIP II"), South African
Investment Partnership ("SAIP") and South African Investment Partnership II ("SAIP II"),
(Capitalworks RFIP, Capitalworks RFIP II, SAIP and SAIP II together referred to as the
"Capitalworks RFG Funds"), with Capitalworks PE GP and Capitalworks Trust GP being related
parties of Capitalworks in which effective control of the RFG ordinary shares ("Shares") vest.
Accordingly, Shareholders are advised that Capitalworks has restructured its shareholding in RFG.
To this end, the Capitalworks RFG Funds have disposed of all Shares held by them, equating to
approximately 37.7% of the total issued ordinary share capital of RFG (being 98 677 102 Shares in
aggregate) (the "Capitalworks Disposal"). In addition, associates of certain members of the RFG
executive management team, namely Deputy CEO Pieter Hanekom and Chief Financial Officer
Tiaan Schoombie (together, "Participating Management Team") have also disposed of an
aggregate 1 305 903 Shares equating to approximately 0.5% of the total issued ordinary share
capital of RFG (the "Participating Management Team Disposal").
The Shares disposed of as part of the Capitalworks Disposal and the Participating Management
Team Disposal have been acquired by and consolidated into two newly established Capitalworks
funds (South African en-commandite partnerships), being:
(i) RFG Holdings Partnership ("RFG Holdings Partnership") of which RFG Holdings GP
Partnership (another newly established South African en-commandite partnerships of
which Capitalworks Trust GP is the GP) is the GP; and
(ii) Capitalworks RFG Partnership ("CW RFG Partnership") of which Capitalworks PE GP is
the GP,
(together, the "Capitalworks Acquisition").
The restructure of Capitalworks' shareholding in RFG does not alter the existing Capitalworks
control structure in RFG, which remains in place and will continue through the two current
Capitalworks GPs (being Capitalworks PE GP and Capitalworks Trust GP).
2. BACKGROUND AND RATIONALE
Founded in 2006, Capitalworks is a leading independent alternative asset management firm,
providing investment access and specialist solutions to its investors across a wide range of
industries and investment themes in global emerging markets. Capitalworks, through Capitalworks
PE GP and the Capitalworks Trust GP, as GPs of the Capitalworks RFG Funds, has been a long-
standing and supportive shareholder of RFG. As Capitalworks Fund I (being a fund comprising of
Capitalworks Private Equity Fund L.P., represented by Capitalworks International Equity Partners
GP Limited as its GP, and Capitalworks Private Equity Partnership, represented by Capitalworks
Private Equity GP Proprietary Limited as its GP) ("Capitalworks Fund I") and the Capitalworks
RFG Funds approach the end of their mandated fund lives and are therefore required to exit their
investment in RFG, the Capitalworks Disposal and simultaneous Capitalworks Acquisition will allow
Capitalworks to remain a major investor in RFG.
Capitalworks remains fully supportive of RFG and its management team and believes that RFG
provides Capitalworks with a compelling investment opportunity given that:
- RFG is a leading African food producer with a growing portfolio of market leading brands which
is complemented by its positioning in the private label space;
- RFG has a diverse portfolio of products, serving a wide range of consumers, which allows for
both resilience and growth;
- RFG has an experienced management team to continue to lead RFG in the next phase of its
growth;
- RFG has a significant asset base and distribution network to support the next phase of its
growth; and
- Capitalworks believes that RFG is well positioned as a platform for continued growth in South
Africa and the rest of Africa.
3. RFG MANAGEMENT PARTICIPATION IN RFG HOLDINGS PARTNERSHIP AND CW RFG
PARTNERSHIP
The Participating Management Team will indirectly (through RFG Holdings Partnership) reinvest
the net proceeds received from the Participating Management Team Disposal into the CW RFG
Partnership and, together with Chief Executive Officer Bruce Henderson, will contribute a further
R20 million of fresh capital to the new Capitalworks fund structure.
4. DEALINGS IN SECURITIES BY DIRECTORS AND ASSOCIATES OF DIRECTORS
In compliance with the Listings Requirements of the JSE, the following dealings in Shares by
directors and associates of directors pursuant to the Capitalworks Disposal, the Participating
Management Team Disposal and the Capitalworks Acquisition is hereby disclosed as follows:
Capitalworks Disposal:
Associates’ dealings
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks PE GP, as GP of Capitalworks RFIP
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks PE GP, as GP of Capitalworks RFIP and have
an indirect economic interest in RFG by way of a carried
interest in relation to the investments held in RFG by
Capitalworks PE GP, as GP of Capitalworks RFIP
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 59 692 656
Disposal price per security: R12.50
Total value of transaction: R746 158 200
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks Trust GP, as GP of Capitalworks RFIP II
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks Trust GP, as GP of Capitalworks RFIP II and
have an indirect economic interest in RFG by way of a
carried interest in relation to the investments held in RFG by
Capitalworks Trust GP, as GP of Capitalworks RFIP II
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 4 851 260
Disposal price per security: R12.50
Total value of transaction: R60 640 750
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks Trust GP, as GP of SAIP
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks Trust GP, as GP of SAIP and have an indirect
economic interest in RFG by way of a carried interest in
relation to the investments held in RFG by Capitalworks
Trust GP, as GP of SAIP
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 8 904 940
Disposal price per security: R12.50
Total value of transaction: R111 311 750
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks Trust GP, as GP of SAIP II
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks Trust GP, as GP of SAIP II and have an
indirect economic interest in RFG by way of a carried
interest in relation to the investments held in RFG by
Capitalworks Trust GP, as GP of SAIP II
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 25 228 246
Disposal price per security: R12.50
Total value of transaction: R315 353 075
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Participating Management Team Disposal:
Name of director: Tiaan Schoombie
Company: RFG Holdings Limited
Name of associate: Schoombies Investments Proprietary Limited
Relationship of associate to Tiaan Schoombie is a trustee and beneficiary of the sole
director: shareholder of Schoombies Investments Proprietary Limited
and a director of the company
Date of transaction: 26 March 2021
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Number of securities: 1 000 000
Disposal price per security: R12.50
Total value of transaction: R12 500 000
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Name of director: Pieter Hanekom
Company: RFG Holdings Limited
Name of associate: Relta 38 Proprietary Limited
Relationship of associate to Pieter Hanekom is the sole director of, and through a family
director: trust controls the majority of the voting rights in, Relta 38
Proprietary Limited
Date of transaction: 26 March 2021
Nature of transaction: Off market disposal of securities
Class of securities: Ordinary shares
Number of securities: 305 903
Disposal price per security: R12.50
Total value of transaction: R3 823 788
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Capitalworks Acquisition:
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks PE GP, as GP of CW RFG Partnership
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks PE GP, as GP of CW RFG Partnership and
have an indirect economic interest in RFG by way of a
carried interest in relation to the investments held in RFG by
Capitalworks PE GP, as GP of CW RFG Partnership
Nature of transaction: Off market purchase of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 97 503 005
Purchase price per R12.50
security:
Total value of transaction: R1 218 787 562.50
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks Trust GP, as GP of RFG Holdings GP
Partnership (which, in turn, acts as GP for RFG Holdings
Partnership)
Relationship of associate to Garth Willis and Chad Smart are indirect controlling
directors: shareholders and directors within the control structure of
Capitalworks Trust GP, as GP of RFG Holdings GP
Partnership (which, in turn, acts as GP for RFG Holdings
Partnership) and have an indirect economic interest in RFG
by way of a carried interest in relation to the investments
held in RFG by Capitalworks Trust GP, as GP of RFG
Holdings GP Partnership (as GP for RFG Holdings
Partnership)
Nature of transaction: Off market purchase of securities
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities: 2 480 000
Purchase price per R12.50
security:
Total value of transaction: R31 000 000
Nature of interest: Indirect beneficial
Clearance obtained: Not required – associate dealing
Shareholders are further advised that an associate of directors Garth Willis and Chad Smart has entered
into a security (pledge and cession) arrangement in respect of RFG Shares:
Name of directors: Garth Willis and Chad Smart
Company: RFG Holdings Limited
Name of associate: Capitalworks PE GP, as GP of CW RFG Partnership
Relationship of associate Garth Willis and Chad Smart are indirect controlling
to directors: shareholders and directors within the control structure of
Capitalworks PE GP, as GP of CW RFG Partnership and
have an indirect economic interest in RFG by way of a
carried interest in relation to the investments held in RFG by
Capitalworks PE GP, as GP of CW RFG Partnership
Nature of transaction: Off-market pledge and cession in securitatem debiti of
Shares as security for financial obligations of Capitalworks
PE GP, as GP of CW RFG Partnership, in favour of Rand
Merchant Bank (A division of FirstRand Bank Limited)
("RMB")
Class of securities: Ordinary shares
Date of transaction: 26 March 2021
Number of securities 97 503 005
pledged:
Deemed value of securities R1 218 787 562.50
based on prevailing market
price:
Nature of interest: Indirect beneficial
Nature, term and amount of (i) Guarantee for existing Capitalworks Fund I debt to
financial obligation: RMB; due 23 April 2021 - R57 041 214; and
(ii) Term loan facility to be provided by RMB; bridge
portion - R71 928 257; balance repayable in 5 years -
R375 011 558
Groot Drakenstein
26 March 2021
Sponsor to RFG
Rand Merchant Bank (A division of FirstRand Bank Limited)
Financial and transaction adviser to Capitalworks
Rand Merchant Bank (A division of FirstRand Bank Limited)
Legal adviser to Capitalworks
Webber Wentzel
Date: 26-03-2021 05:23:00
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