Circular to shareholders. relating to:

Transcription

1 GIJIMA GROUP LIMITED Incorporated in the Republic of South Africa (Registration number 1998/021790/06) Share code: GIJ ISIN: ZAE ( Gijima or the Company ) Circular to shareholders relating to: the conversion of the ordinary shares in Gijima from ordinary shares with a par value to ordinary shares with no par value; an increase in the number of the Company s authorised shares and the corresponding amendment to the Company s Memorandum of Incorporation; a specific authority for the Company to issue new shares pursuant to a rights offer; the consolidation of the Company s shares on a 1 for 20 basis; authorisation for the Company to provide financial assistance to a subsidiary; and condonation under section 75(7)(b) of the Companies Act of the Company s directors interests; a notice of general meeting; and including: a form of proxy (blue) (for use by certificated shareholders and dematerialised shareholders with own name registration only); and a form of surrender (pink) (for use by certificated shareholders only). Date of issue: Wednesday, 10 April 2013 Merchant bank and sponsor Attorneys

2 CORPORATE INFORMATION AND ADVISORS Company secretary ithemba Governance and Statutory Solutions (Pty) Ltd (Registration number 2008/008745/07) Block 5, Suite 102 Monument Office Park 79 Steenbok Avenue Monument Park (PO Box 25160, Monument Park, 0105) Transfer secretaries Link Market Services South Africa (Pty) Ltd (Registration number 2000/007239/07) 13th Floor, Rennie House 19 Ameshoff Street Braamfontein Johannesburg 2001 (PO Box 4844, Johannesburg, 2000) Gijima registered office (Registration number 1998/021790/06) Jupiter Building, Gijima Office Park 47 Landmarks Avenue Kosmosdal Samrand Centurion 0157 (PO Box 10629, Centurion, 0046) Attorneys Webber Wentzel 10 Fricker Road Illovo Boulevard Johannesburg 2196 (PO Box 61771, Marshalltown, 2107) Merchant bank and sponsor Rand Merchant Bank (a division of FirstRand Bank Limited) (Registration number 1929/001225/06) 1 Merchant Place Corner Fredman Drive and Rivonia Road Sandton 2146 (PO Box , Sandton, 2146) This circular is available in English only. Copies may be obtained from the registered office of the Company and the transfer secretaries at the addresses set out above. Shareholders will be able to inspect the circular on the Company s website, from the date of issue of this circular until the date of the general meeting.

3 TABLE OF CONTENTS Page Corporate information and advisors Inside front cover Action required by shareholders 2 Important dates and times 4 Definitions 5 Circular to shareholders 1. Introduction 8 2. Rights offer 9 3. Increase in the number of the Company s authorised shares Conversion to no par value shares Consolidation of shares Authorised and issued shares Conditions precedent Bridge loan General meeting Opinion of the board Directors responsibility statement Consents Documents available for inspection 12 Annexure 1 Report on the share conversion in terms of Regulation 31 of the Act 13 Notice of general meeting 15 Form of proxy (blue) (for use by certificated shareholders and dematerialised shareholders with own name registration only) Form of surrender (pink) (for use by certificated shareholders only) Attached Attached 1

4 ACTION REQUIRED BY SHAREHOLDERS The definitions commencing on page 5 of this circular apply to this section. This circular is important and requires your immediate attention If you are in any doubt as to what action to take, please consult your broker, CSDP, banker, attorney, accountant or other professional advisor immediately. If you have disposed of all your Gijima shares, please forward this circular to the person to whom you disposed of such shares or to the broker, CSDP, banker or other agent through whom you disposed of such shares. Please take note of the following provisions regarding the action required by shareholders: A general meeting of shareholders will be held at the registered office of Gijima, in Jupiter Building, Gijima Office Park, 47 Landmarks Avenue, Kosmosdal, Samrand, Centurion, 0157 at 11:00 on Thursday, 9 May 2013 for the purpose of considering and, if deemed fit, passing, with or without modification, the special and ordinary resolutions set out in the attached notice of general meeting. 1. If you have dematerialised your shares without own name registration: Voting at the general meeting Your CSDP or broker should contact you to ascertain how you wish to cast your vote at the general meeting and thereafter cast your vote in accordance with your instructions. If you have not been contacted, it would be advisable for you to contact your CSDP or broker and furnish it with your voting instructions. If your CSDP or broker does not obtain voting instructions from you, it will be obliged to vote in accordance with the instructions contained in the agreement concluded between you and your CSDP or broker. You must not complete the attached form of proxy (blue). Attendance and representation at the general meeting In accordance with the agreement between you and your CSDP or broker, you must advise your CSDP or broker if you wish to attend the general meeting in person and your CSDP or broker will issue the necessary letter of representation for you to attend the general meeting. Surrender of documents of title Dematerialised shareholders must not complete the attached form of surrender (pink) and do not need to do anything with regard to the share consolidation as this will be automatically updated by their CSDP or broker. 2. If you have not dematerialised your shares or have dematerialised your shares with own name registration: Voting, attendance and representation at the general meeting You may attend and vote at the general meeting in person. Alternatively, you may appoint a proxy to represent you at the general meeting by completing the attached form of proxy (blue) in accordance with the instructions therein, which form must be lodged with or posted to the transfer secretaries to be received by no later than 11:00 on Tuesday, 7 May Any form of proxy not returned to the transfer secretaries by this time may be handed to the chairperson of the general meeting any time before the appointed proxy exercises any of the shareholder s rights at the general meeting. Shareholders are advised that they or their proxies may participate in the general meeting by means of a teleconference facility and, if they wish to do so: must contact Annamarie van der Merwe, the company secretary, at telephone number before 11:00 on Tuesday, 7 May, 2013 to receive dial-in instructions for the conference call; will be required to provide reasonably satisfactory identification; and will be billed separately by their own telephone service providers for their telephone call to participate in the general meeting. 2

5 Please note that whilst it is possible to participate in the general meeting through this medium, there is no facility for electronic voting and accordingly, shareholders are advised to follow the instructions set out in this Action required by shareholders section of the circular in respect of voting. Surrender of documents of title Certificated shareholders must complete the attached form of surrender (pink) and lodge it with the transfer secretaries. Subject to registration of the resolution with the Commission relating to the share consolidation, share certificates reflecting the new capital structure of the Company will be posted, by registered mail to certificated resident shareholders and, in the case of non-resident and emigrant certificated shareholders, to the authorised foreign exchange dealer in South Africa nominated by such shareholders, at their own risk, who have surrendered their documents of title by 12:00 on the record date for the share consolidation, or within five business days of receipt of the existing documents of title, whichever is the later. In the event that the special resolution to approve the share consolidation is not passed by the requisite majority of shareholders at the general meeting, or that the resolution relating to the share consolidation is not registered with the Commission, existing documents of title will be returned, by registered mail to certificated resident shareholders and, in the case of non-resident and emigrant certificated shareholders, to the authorised foreign exchange dealer in South Africa nominated by such shareholders, at their own risk. Certificated shareholders should be aware that share certificates are not accepted as tradeable instruments on the JSE. Certificated shareholders are therefore urged to take this opportunity to dematerialise their certificates as per the requirements of Strate. If any existing documents of title have been lost or destroyed and the certificated shareholder provides evidence to this effect to the satisfaction of the directors, then Gijima may dispense with the surrender of such documents of title against provision of an acceptable indemnity. Receipts will not be issued for the surrender of existing documents of title. Lodging agents who require special transaction receipts are requested to prepare such receipts and submit them for stamping together with the documents of title lodged. 3

6 IMPORTANT DATES AND TIMES 2013 Record date by which shareholders must be registered as such in order to receive this circular, which contains the notice of general meeting Circular posted to shareholders on Details of general meeting released on SENS on Last day to trade in order to be eligible to attend and vote at the general meeting Record date to determine which shareholders are entitled to attend and vote at the general meeting Last day to lodge forms of proxy with the transfer secretaries to vote at the general meeting by 11:00 on (see note 2 below) General meeting of shareholders to be held at 11:00 on Results of general meeting announced on SENS on Finalisation announcement confirming that the increase in the number of authorised shares has become effective released on SENS on or about Finalisation announcement confirming that the increase in the number of authorised shares has become effective published in the press on or about Friday, 5 April Wednesday, 10 April Wednesday, 10 April Friday, 26 April Friday, 3 May Tuesday, 7 May Thursday, 9 May Thursday, 9 May Friday, 17 May Monday, 20 May Notes 1. The dates and times provided for in this circular are subject to amendment. Any material amendment will be published on SENS and in the press. 2. Any form of proxy not returned to the transfer secretaries by this time may be handed to the chairperson of the general meeting any time before the appointed proxy exercises any of the shareholder s rights at the general meeting. 3. The important dates and times pertaining to the share consolidation will be announced on SENS and published in the press in due course. 4

7 DEFINITIONS In this circular, unless otherwise stated or the context so requires, the words in the first column below shall have the meanings stated opposite to them in the second column below, words in the singular shall include the plural and vice versa, words denoting one gender include the other and expressions denoting natural persons include juristic persons and associations of persons: Act or Companies Act Allan Gray board or the directors bridge loan bridge loan agreement certificated shareholders the Companies Act, No 71 of 2008, as amended; Allan Gray (Pty) Ltd, acting for and on behalf of its clients, as duly authorised agent and investment manager; the board of directors of Gijima at the date of this circular and set out on page 8 hereto; the granting of a bridge loan facility by the lender to Gijima, in the aggregate amount of R50 million, in order to finance the working capital requirements of the Company prior to completion of the rights offer; the agreement dated 2 April 2013 entered into between Gijima and the lender, and governing the terms of the bridge loan; shareholders who have not dematerialised their shares through Strate; circular or document this circular to shareholders dated Wednesday, 10 April 2013 incorporating a conversion report, notice of general meeting, a form of proxy (blue) and a form of surrender (pink); Commission common monetary area CSDP dematerialised or dematerialisation dematerialised shareholders dematerialised shares the funders Futuregrowth general meeting the Companies and Intellectual Property Commission established in terms of section 185 of the Act; South Africa, the Kingdoms of Swaziland and Lesotho and the Republic of Namibia; a central securities depository participant, being a participant as defined in section 1 of the Securities Services Act; the process by which certificated securities are converted to or held in an electronic form as uncertificated securities and recorded in the subregister of security holders maintained by a CDSP; shareholders who hold dematerialised shares; shares that have been through the dematerialisation process; the holders of debentures issued by GijimaAst Finance, as at the last practicable date; Futuregrowth Asset Management (Pty) Ltd, acting for and on behalf of its clients, as duly authorised agent and investment manager; the general meeting of shareholders to be held at Gijima, in Jupiter Building, Gijima Office Park, 47 Landmarks Avenue, Kosmosdal, Samrand, Centurion, 0157 at 11:00 on Thursday, 9 May 2013; Gijima or the Company Gijima Group Limited, registration number 1998/021790/06, a limited liability public company duly incorporated in accordance with the company laws of South Africa, the ordinary share capital of which is listed on the JSE; GijimaAst Finance GijimaAST Finance (Pty) Ltd, registration number 2006/007198/07, a limited liability private company duly incorporated in accordance with the company laws of South Africa; 5

8 Gijima Holdings Gijima Holdings (Pty) Ltd, registration number 1998/021835/07, a limited liability private company duly incorporated in accordance with the company laws of South Africa, being a wholly-owned subsidiary of Gijima; Guma Group heads of agreement increase in the number of authorised shares Investec AM JSE JSE Limited last practicable date the lender letter of undertaking Link Market Services Listings Requirements MOI own name registration principal shareholders Rand or R or cents rights offer rights offer shares Securities Services Act or SSA securitisation the security documents SENS collectively, Guma Tech (Pty) Ltd, Guma Support (Pty) Ltd, Guma Investment Holdings (Pty) Ltd and Guma Tech Group (Pty) Ltd, being a 36.5% shareholder in Gijima; the agreement dated 2 April 2013 entered into between, amongst others, Gijima and the funders; the proposed increase in the number of the Company s authorised shares from (one point three billion) shares to (five billion) shares by the creation of an additional (three point seven billion) shares; Investec Asset Management (Pty) Ltd, acting for and on behalf of its clients, as duly authorised agent and investment manager; the securities exchange operated by the JSE Limited; JSE Limited, registration number 2005/022939/06, a public company duly registered and incorporated with limited liability under the company laws of South Africa, licensed to operate as an exchange under the Securities Services Act; the last practicable date prior to finalisation of this circular, being Friday, 5 April 2013; Yebo Guma Investments (Pty) Ltd; the agreement dated 2 April 2013 entered into between Gijima, the principal shareholders and the underwriters; Link Market Services South Africa (Pty) Ltd, registration number 1929/001225/06, a limited liability private company duly incorporated in accordance with the company laws of South Africa; the JSE Limited Listings Requirements; the memorandum of incorporation of Gijima; the registration of dematerialised shares in the name of the beneficial owner thereof (as opposed to in the name of a nominee for the beneficial owner) in a subregister; Guma Group, Allan Gray and Investec AM; South African Rand and cents, the official currency of South Africa; the proposed renounceable rights offer by the Company to shareholders of the rights offer shares at an issue price of R0.05 per rights offer share and in the ratio of rights offer shares for every 100 shares held by shareholders on the record date for the rights offer; the (three billion) new shares to be issued pursuant to the rights offer; the Securities Services Act, No 36 of 2004, as amended; the trade receivables securitisation funding programme established by Gijima and pursuant to which debentures are issued by GijimaAst Finance from time to time; the (i) pledge of shares agreement; (ii) cession in security agreement; and (iii) general notarial bond, all of which emanate from the bridge loan agreement, and as more fully described in paragraph 8 of this circular; the Stock Exchange News Service of the JSE; 6

9 share consolidation or consolidation shareholders or Gijima shareholders shares or Gijima shares South Africa South African Exchange Control Regulations Strate transfer secretaries underwriters the proposed consolidation of Gijima shares, following the implementation of the rights offer, in the ratio of 1 for 20; registered holders of Gijima shares; ordinary shares issued by Gijima; the Republic of South Africa; the Exchange Control Regulations in terms of section 9 of the Currency and Exchanges Act, No 9 of 1933, as amended; Strate Limited, a registered central securities depository licensed in terms of the Securities Service Act; Link Market Services, the transfer secretaries of Gijima; and Guma Group and Futuregrowth. 7

10 GIJIMA GROUP LIMITED Incorporated in the Republic of South Africa (Registration number 1998/021790/06) Share code: GIJ ISIN: ZAE ( Gijima or the Company ) Non-executive Directors RW Gumede (Chairman) AH Trikamjee * JCL van der Walt * AFB Mthembu * M Macdonald * MHR Bussin * * Independent non-executive directors Executive Directors E Wilton (Interim Chief Executive Officer and Alternate Director) CJH Ferreira (Chief Financial Officer) Company secretary ithemba Governance and Statutory Solutions (Pty) Ltd CIRCULAR TO SHAREHOLDERS 1. Introduction Shareholders are referred to the cautionary announcement published on SENS on 28 March 2013 relating to a proposed renounceable rights offer. In terms of the securitisation, GijimaAst Finance presently has R255 million secured senior debentures in issue, presently held by the funders. Pursuant to the securitisation, GijimaAst Finance is subject to a number of financial covenants, including a minimum asset cover and gearing covenant. The Company and the funders have entered into the heads of agreement, in terms of which the funders have conditionally agreed to provide temporary leniency in respect of non-compliance by GijimaAst Finance with such covenants. One of the conditions upon which such leniency is to be granted is that sufficient equity capital must be raised by Gijima, and funds made available by Gijima to GijimaAst Finance, to ensure that GijimaAst Finance will meet the required minimum asset cover ratio and have sufficient funding reserves to cater for unforeseen risks. It is proposed that R150 million of new equity will be raised by Gijima by way of the rights offer. The purpose of this circular is to: 1.1 provide shareholders with relevant information relating to the proposed increase in the number of authorised shares, the conversion of the ordinary shares in Gijima from ordinary shares with a par value to ordinary shares with no par value, the proposed specific authority for the directors to issue 3 billion new shares pursuant to the rights offer, the consolidation of the shares of the Company, the proposed authorisation for the Company to provide financial assistance to a subsidiary and the condonation of the Company s directors interests; and 1.2 convene a general meeting in order to consider and, if deemed fit, pass the necessary special and ordinary resolutions to give effect thereto. 8

11 2. Rights offer In terms of the rights offer, Gijima will offer 3 billion rights offer shares at a subscription price of R0.05 per rights offer share, in the ratio of rights offer shares for every 100 shares held by shareholders at the close of business on the record date for the rights offer. The proceeds from the rights offer will be used, inter alia, to recapitalise the Company, to provide a funding injection to GijimaAst Finance in order to ensure compliance by GijimaAst Finance with its securitisation funding covenants, and to fund the working capital requirements of the Company going forward. The rights offer is expected to be concluded within the current financial year. Insofar as is known to the directors, the principal shareholders beneficially held, directly or indirectly, the following interests in the issued ordinary shares of Gijima as at the last practicable date: Shareholder Number of shares held % held Allan Gray Guma Tech (Pty) Ltd Guma Support (Pty) Ltd Investec AM Guma Investment Holdings (Pty) Ltd Guma Tech Group (Pty) Ltd Total Notes 1 As defined. 2 Messrs RW Gumede and CJH Ferreira have an interest and are also directors of Guma Tech (Pty) Ltd. 3 Messrs RW Gumede and CJH Ferreira have an interest and are also directors of Guma Support (Pty) Ltd. 4 Messrs RW Gumede and CJH Ferreira have an interest and are also directors of Guma Investment Holdings (Pty) Ltd. 5 Messrs RW Gumede and CJH Ferreira have an interest and are also directors of Guma Tech Group (Pty) Ltd. In terms of the letter of undertaking, the principal shareholders have undertaken to support the rights offer and have committed to vote in favour of, or (as regards Allan Gray and Investec AM and further subject to certain exceptions) to recommend to their clients that they vote in favour of, all of the special and ordinary resolutions required to implement the rights offer. The principal shareholders have further undertaken to subscribe for, or (as regards Allan Gray and Investec AM and further subject to certain exceptions) to recommend to their clients that they subscribe for, all of the rights offer shares offered to them pursuant to the rights offer, on the following basis: Shareholder Number of rights offer shares (million) % of rights offer shares Value of rights offer shares (Rand million) Guma Group Allan Gray Investec AM Total The undertakings by the principal shareholders are provided on the condition that the Company is not placed under supervision for business rescue in accordance with the Companies Act or into provisional or final liquidation prior to the close of the rights offer. In terms of the letter of undertaking, the balance of the rights offer shares not subscribed for by the principal shareholders will be underwritten by the underwriters on the following basis: Underwriter Number of rights offer shares (million) % of rights offer shares Value of rights offer shares (Rand million) Guma Group Futuregrowth Total

12 3. Increase in the number of the Company s authorised shares The Company s current authorised ordinary shares are insufficient for the purpose of implementing the proposed rights offer. The board proposes an increase in the number of the Company s authorised ordinary shares from 1.3 billion ordinary shares to 5.0 billion ordinary shares. In order to give effect to the increase in the number of authorised shares, it will be necessary for shareholders to approve the corresponding amendment to the MOI reflecting such increase. If approved by shareholders, the increase in the number of authorised shares will become effective on the date on which the notice of amendment in respect of the corresponding amendment to the MOI is filed with the Commission, as contemplated in section 16(9) of the Companies Act. 4. Conversion to no par value shares The current share capital of Gijima comprises of shares with a par value of R0.10 per share. In order to give effect to the increase in the number of authorised shares, it will first be necessary for shareholders to approve the amendment to the MOI to reflect the conversion of the ordinary shares in Gijima from ordinary shares with a par value to ordinary shares with no par value. 5. Consolidation of shares It is proposed that, following the rights offer, the Company should undertake a share consolidation on the basis of one consolidated share for every 20 shares held before consolidation. The rationale for the consolidation of the authorised and issued shares of the Company is to decrease the large number of authorised and issued shares following the rights offer, to a more manageable number of shares. In order to give effect to the consolidation of shares, it will be necessary for shareholders to approve the amendment to the MOI to reflect such consolidation. The share consolidation will be implemented in accordance with standard rounding convention and the requirements of Strate. Namely, allocations of consolidated Gijima shares will be rounded down to the nearest whole number, where they are less than 0.5, and will be rounded up to the nearest whole number, where they are equal to or greater than 0.5, resulting in allocations of whole Gijima shares and no fractional entitlements. 6. Authorised and issued shares If approved by shareholders, it is anticipated that the share consolidation will become effective on the date on which the notice of amendment in respect of the corresponding amendment to the MOI is filed with the Commission, as contemplated in section 16(9) of the Companies Act and application will be made to the JSE for the listing of the Company s new capital structure. The Company s authorised and issued share capital as at the last practicable date is set out below: Number of authorised shares ordinary shares of R0.10 each Number of issued shares ordinary shares of R0.10 each Treasury shares ordinary shares of R0.10 each The Company s authorised and issued share capital after the proposed increase in the number of authorised shares, conversion to no par value shares and rights offer is set out below: Number of authorised shares ordinary shares of no par value Number of issued shares ordinary shares of no par value Treasury shares ordinary shares of no par value The Company s authorised and issued share capital after the proposed share consolidation is set out below: Number of authorised shares ordinary shares of no par value Number of issued shares ordinary shares of no par value Treasury shares ordinary shares of no par value 10

13 7. Conditions precedent The increase in authorised share capital and the conversion to no par value shares and therefore the proposed rights offer, are conditional upon: the requisite shareholder approval of all the special and ordinary resolutions contained in the notice of the general meeting which forms part of this circular (save for the special resolutions required for the consolidation of the shares); and the filing of special resolutions number 1 to 5 with the Commission and its acceptance of special resolutions 1 to Bridge loan In order to finance the working capital requirements of the Company prior to completion of the rights offer, the lender will make available to the Company, a bridge loan facility in the amount of R50 million. Gijima Holdings is required to provide credit support for the obligations of Gijima under the bridge loan agreement. To this end, the Company has entered into: 8.1 the bridge loan agreement, incorporating a guarantee and indemnity in favour of the lender; and 8.2 the security documents, as follows: a pledge of shares agreement, in terms of which the Company pledges its shares in Gijima Holdings to the lender; a cession in security agreement in favour of the lender in respect of certain intellectual property rights and certain material contracts; and a general notarial bond by the Company in favour of the lender over all its movable assets, as security for the due performance of its obligations to the lender in respect of the bridge loan agreement and to cover any related costs and disbursements which may be incurred, subject to approval by shareholders by means of special resolution in terms of section 44(3)(a)(ii) of the Companies Act. In terms of section 44(2) of the Companies Act, the security referred to in 8.1 and 8.2 above, constitutes the granting of financial assistance by Gijima to Gijima Holdings, a related company for purposes of the Companies Act. The granting of such financial assistance requires the approval of shareholders by means of a special resolution. 9. General meeting At the general meeting, shareholders will be requested to consider and, if deemed fit, to pass, with or without modification, the special and ordinary resolutions required (i) to authorise the conversion of the ordinary shares in Gijima to ordinary shares with no par value; (ii) for the correction of the typographical error as regards the issued and authorised shares and the increase in the number of authorised shares; (iii) for the share consolidation; (iv) for the corresponding amendments to the MOI; (v) to grant the specific authority for the directors to issue 3 billion rights offer shares pursuant to the rights offer; (vi) to approve the granting of financial assistance to Gijima Holdings in order to facilitate the bridge loan; and (vii) for the condonation under section 75(7)(b) of the Companies Act of the Company s directors interests. The notice convening the general meeting is attached to this circular. A form of proxy (blue), for use by those certificated shareholders and dematerialised shareholders with own name registration who are unable to attend the general meeting, but wish to be represented thereat, is attached to and forms part of this circular. Duly completed forms of proxy must be received by the transfer secretaries (see contact details on the inside front cover) by no later than 11:00 on Tuesday, 7 May 2013 or handed to the chairperson of the general meeting before the appointed proxy exercises any of the relevant shareholder s rights at the general meeting. Dematerialised shareholders without own name registration must timeously advise their CSDP or broker if they wish to attend and vote at the general meeting in order for the CSDP or broker to provide them with the necessary letter of representation to do so. Such shareholders must also timeously provide their CSDP or broker with their voting instruction in order for the CSDP or broker to vote in accordance with their instruction at the general meeting. 10. Opinion of the board The board is of the opinion that, for the reasons stipulated in paragraph 2 of this circular, the proposed specific authority for the directors to issue 3 billion shares pursuant to the rights offer is in the best interests of the Company. For the reasons stipulated in paragraphs 3, 4 and 5 of this circular, the board is of the opinion that the proposed increase in the number of authorised shares, conversion of par value 11

14 ordinary shares to no par value ordinary shares and the consolidation of the Company s shares are in the best interests of the Company. For the reasons stipulated in paragraph 8 of this circular, the board is of the opinion that the provision of financial assistance to Gijima Holdings in order to facilitate the bridge loan, is in the best interests of the Company. 11. Directors responsibility statement The directors as at the last practicable date, collectively and individually, accept full responsibility for the accuracy of the information given in this circular and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this circular contains all information required by law and the Listings Requirements. 12. Consents The merchant bank and sponsor, attorneys and the transfer secretaries, the details of whom are set out on the inside front cover of this circular, have consented, in writing, to act in the capacities stated and to their names being used in this circular and have not withdrawn their consent prior to the publication of this circular. 13. Documents available for inspection Copies of the following documents will be available for inspection at the Company s registered office and at the office of the transfer secretaries, whose addresses are noted on the inside front cover of this circular, during normal business hours, from the date of issue of this circular until the date of the general meeting: the heads of agreement; the bridge loan agreement; the security documents; the letter of undertaking; the memoranda of incorporation of Gijima and each of its subsidiaries; the report of the board in terms of Regulation 31 of the Regulations, as set out in Annexure 1 to this circular; the annual financial statements of Gijima for the three years ending 30 June 2012, 30 June 2011 and 30 June 2010; the unaudited interim report for the six months ending 31 December 2012; the letters of consent received from the merchant bank and sponsor, attorneys and the transfer secretaries; and a signed copy of this circular. For and on behalf of the board Chief Financial Officer CJH Ferreira Samrand Wednesday, 10 April

15 ANNEXURE 1 REPORT ON THE SHARE CONVERSION IN TERMS OF REGULATION 31 OF THE ACT 1. Background 1.1 The Company at present has authorised ordinary shares and issued ordinary shares with a par value of R0.10 each ( the Ordinary Shares ). 1.2 The board of directors has proposed that a total of R of new equity will be raised by way of a rights offer, the details of which are set out in paragraph 2 of the circular ( the Rights Offer ) which will be used, inter alia, to recapitalise the Company, to provide a funding injection to GijimaAst Finance in order to ensure compliance by GijimaAst Finance with its securitisation funding covenants, and to fund the working capital requirements of the Company going forward. 1.3 The Company will have insufficient authorised and unissued ordinary shares to issue for the purposes of the Rights Offer. Accordingly to implement the Rights Offer, the Company must increase its authorised and unissued shares. 1.4 In terms of the transitional provisions in Schedule 5 to the Companies Act, 2008 ( the Companies Act ) and in terms of the Companies Regulations, 2011 ( the Regulations ), companies which existed as at the effective date of the Companies Act, being 1 May 2011, may not increase their existing authorised par value shares by creating new shares in the same class, unless it has first converted the existing par value shares to no par value shares. 1.5 So as to meet the requirements of the Companies Act, the Regulations and the Listings Requirements of the JSE Limited ( JSE ) to increase authorised Ordinary Shares, the Company must first convert the Ordinary Shares into ordinary shares of no par value ( the Converted Ordinary Shares ) pursuant to the provisions of Regulation 31, which conversion the board of directors of the Company recommends. 1.6 In terms of regulation 31(6) of the Regulations, a company may amend its Memorandum of Incorporation to effect a conversion of its authorised and issued shares of par value to shares of no par value by way of a resolution proposed by the board of directors at any time after the date on which the Companies Act came into effect, and such resolution will have been adopted if it is approved by: a special resolution adopted by the holders of shares of each such class of shares; and a further special resolution adopted by a meeting of the Company s shareholders called for that purpose. 1.7 The ordinary shareholders of the Company ( Ordinary Shareholders ) are requested in the notice of general meeting dated Wednesday, 10 April 2013, to which this document is attached, to approve the special resolution required to authorise the conversion of the Ordinary Shares with a par value of R0.10 each into Converted Ordinary Shares of no par value, on the basis that each Ordinary Share will be converted into one no par value Converted Ordinary Share ( the Proposed Conversion ). 1.8 Regulation 31(7) of the Regulations requires the board of directors of a company to prepare a report in respect of a proposed resolution to convert any par value shares into no par value shares ( the Report ). This document constitutes the Report in relation to the Proposed Conversion. 2. The Report 2.1 General In terms of Regulation 31(7) of the Regulations the Report is required to, at a minimum: state all information relevant to the value of the securities affected by a proposed conversion; identify holders of the company s securities affected by a proposed conversion; describe the material effects that the proposed conversion will have on the rights of the holders of the company s securities affected by a proposed conversion; and evaluate any material adverse effects of a proposed arrangement against the compensation that any of those persons will receive in terms of the arrangement. 13

16 3. Effect of the Proposed Conversion 3.1 Information relevant to the value of the securities affected by the proposed conversion Given that the number of Ordinary Shares in issue and the rights attaching to those Ordinary Shares will be unaffected by the Proposed Conversion, the Proposed Conversion will have no impact on the historic net asset value, earnings, headline earnings and distributions per Converted Ordinary Share and should have no impact on the price at which Converted Ordinary Shares trade on the JSE. 3.2 Holders of the Company s securities affected by the Proposed Conversion The Proposed Conversion will affect the holders of all Ordinary Shares Certificated shareholders holding share certificates of Ordinary Shares with a par value of R0.10 will not be asked to surrender their share certificates at this point in time and will be able to dematerialise the share certificates of such Ordinary Shares with a par value of R0.10 in order to trade in their Converted Ordinary Shares. If required, Ordinary Shareholders may then request share certificates for their Converted Ordinary Shares and accordingly become certificated Ordinary Shareholders. 3.3 Material effects of the Proposed Conversion on Ordinary Shareholders The Proposed Conversion has no impact on any of the rights attaching to the Ordinary Shares. 3.4 Evaluation of material adverse effects of the Proposed Conversion against compensation offered The Proposed Conversion has no adverse effects on Ordinary Shareholders as they are in the same position and enjoy the same rights before and after the Proposed Conversion. As a result, no compensation will be offered in the context of the Proposed Conversion. 4. Filing and publishing of the Report A copy of this Report will be filed at the Companies and Intellectual Property Commission and at the South African Revenue Services at the same time as this Report is published to the Ordinary Shareholders. 14

17 GIJIMA GROUP LIMITED Incorporated in the Republic of South Africa (Registration number 1998/021790/06) Share code: GIJ ISIN: ZAE ( Gijima or the Company ) NOTICE OF GENERAL MEETING The definitions commencing on page 5 of the circular to which this notice of general meeting is attached apply to this notice of general meeting. Notice is hereby given that a general meeting of shareholders of Gijima will be held at the registered office of Gijima, in Jupiter Building, Gijima Office Park, 47 Landmarks Avenue, Kosmosdal, Samrand, Centurion, 0157 at 11:00 on Thursday, 9 May 2013 for the purpose of considering and, if deemed fit, passing, with or without modification, the special and ordinary resolutions set out in this notice. SPECIAL RESOLUTION NUMBER 1: CONVERSION OF PAR VALUE SHARES TO NO PAR VALUE SHARES Resolved that all the ordinary shares in the share capital of the Company, comprising (one point three billion) authorised and (nine hundred and sixty eight million three hundred and fifty seven thousand three hundred and seventy nine) issued ordinary shares having a par value of R0.10 (ten cents) each, are, without altering the substance of the specific rights and privileges associated therewith, converted into ordinary shares having no par value, on the basis that each ordinary no par value share shall after the conversion have the same value, rights and privileges which attached to such shares immediately prior to the passing of this special resolution number 1. Motivation for special resolution number 1 The Companies Act limits the Company s ability to restructure its par value shares. In order to meet the requirements of the Companies Act that the Company s ordinary shares do not have a par value, the Company s authorised and issued share capital must be converted from ordinary par value shares into ordinary shares of no par value in terms of Regulation 31 of the Regulations (being Regulations promulgated from time to time under the Companies Act) and in accordance with the report attached as Annexure 1 to the circular. In order for special resolution number 1 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 2: CORRECTION OF TYPOGRAPHICAL ERROR Resolved that, subject to the passing of special resolution number 1, the MOI of the Company be and is hereby amended by the replacement of the figures and words (nine hundred and sixty eight million, three hundred and fifty seven thousand, three hundred and seventy nine) in article 3.1 of the MOI with the figures and words (one point three billion). Motivation for special resolution number 2 Article 3.1 of the MOI must be amended in order to correct the typographical error which incorrectly reflects the authorised ordinary share capital of the Company as (nine hundred and sixty eight million, three hundred and fifty seven thousand, three hundred and seventy nine) ordinary shares, instead of its actual authorised ordinary share capital of (one point three billion) ordinary shares. The reason for special resolution number 2 is to ensure that the Company s MOI contains the necessary and correct detail in relation to the Company s authorised shares as required. In order for special resolution number 2 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. 15

18 SPECIAL RESOLUTION NUMBER 3: APPROVAL OF INCREASE IN THE NUMBER OF AUTHORISED SHARES Resolved that, subject to the passing of special resolution numbers 1 and 2, in terms of section 36(2) of the Companies Act, the authorised shares of the Company are increased from (one point three billion) to (five billion) by the creation of (three point seven billion) ordinary shares of no par value. Motivation for special resolution number 3 As the Company will be required to issue additional shares, inter alia, for purposes of the proposed rights offer, but does not have sufficient authorised shares, the Company wishes to increase the authorised shares to (five billion) by the creation and authorising of (three point seven billion) shares. In order for special resolution number 2 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 4: AMENDMENT OF MOI INCREASE IN THE NUMBER OF AUTHORISED SHARES Resolved that, subject to the passing of special resolution numbers 1 to 3, the MOI of the Company be and is hereby amended by the deletion of article 3.1 of the MOI in its entirety and the replacement thereof with the following new article: The Company is authorised to issue up to (five billion) Ordinary Shares, subject to the preferences, rights, limitations and other terms associated with the Ordinary Shares, as set out in article Motivation for special resolution number 4 In terms of section 36(2) of the Companies Act, and Regulation 31(6)(b)(i) of the Companies Regulations, the MOI must be amended in order to give effect to a change in the number of the Company s authorised shares. The reason for special resolution number 4 is to ensure that the Company s MOI contains the necessary detail in relation to the Company s authorised shares as required. In order for special resolution number 3 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 5: APPROVAL OF ISSUE OF RIGHTS OFFER SHARES Resolved that, subject to the passing of special resolution numbers 1 to 4, as a specific authority and approval in terms of section 41(3) of the Companies Act, the directors of the Company be and are hereby authorised by way of a specific authority, to issue (three billion) rights offer shares pursuant to the rights offer, which issue shall be in accordance with the terms and conditions of the proposed rights offer. Motivation for special resolution number (three billion) rights offer shares will be issued pursuant to the rights offer to raise gross proceeds of R (one hundred and fifty million Rand). This special resolution number 4 will authorise the Company to issue the rights offer shares pursuant to the rights offer and to grant a specific authority to the directors of the Company in terms of section 41(3) of the Companies Act. If shareholders fail to follow all of their rights in terms of the rights offer, they will suffer an immediate dilution in their voting rights. In terms of section 41(3) of the Companies Act, an issue of shares requires approval of the shareholders by way of a special resolution if the voting power of the class of shares that are to be issued will be equal to or exceed 30% (thirty per cent) of the voting power of all the shares of that class held by shareholders immediately before the relevant transaction. The effect of special resolution number 5 is to authorise the Company to issue the rights offer shares in terms of the rights offer. In order for special resolution number 5 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 6: CONSOLIDATION OF SHARES Resolved that, subject to the passing of special resolution numbers 1 to 5, that the authorised and issued shares of the Company comprising (five billion) authorised shares and (three billion nine hundred and sixty eight million three hundred and fifty seven thousand three hundred and seventy nine) issued shares, be consolidated on a 1 for 20 basis so as, after consolidation, to comprise

19 (two hundred and fifty million) authorised shares and (one hundred and ninety eight million four hundred and seventeen thousand eight hundred and sixty nine) issued shares. Motivation for special resolution number 6 The consolidation of the authorised and issued shares of the Company is to decrease the large number of authorised and issued shares following the implementation of the rights offer to a more manageable number of shares. In order for special resolution number 6 to be passed, the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 7: AMENDMENT OF MOI CONSOLIDATION OF SHARES Resolved that, subject to the passing of special resolution numbers 1 to 6, the MOI of the Company be and is hereby amended by the deletion of article 3.1 of the MOI in its entirety and the replacement thereof with the following new article: The Company is authorised to issue up to (two hundred and fifty million) Ordinary Shares, subject to the preferences, rights, limitations and other terms associated with the Ordinary Shares, as set out in article Motivation for special resolution number 7 In terms of section 36(2) of the Companies Act, the MOI must be amended in order to give effect to a change in the number of the Company s authorised shares pursuant to the consolidation of the shares. The reason for special resolution number 7 is to ensure that the Company s MOI contains the necessary detail in relation to the Company s authorised shares pursuant to the consolidation of the shares, as required. In order for special resolution number 7 to be passed the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. SPECIAL RESOLUTION NUMBER 8: FINANCIAL ASSISTANCE Resolved that, to the extent required by section 44 of the Companies Act, the board of directors of the Company may, subject to compliance with the requirements of the Company s memorandum of incorporation and the Companies Act, each as presently constituted and as amended from time to time, authorise the Company to provide direct or indirect financial assistance by way of a loan, guarantee, the provision of security or otherwise, to any person for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the Company or a related or interrelated company, or for the purchase of any securities of the Company or a related or interrelated company, pursuant to the provisions of the heads of agreement, the letter of undertaking, the bridge loan agreement and the security documents. In order for special resolution number 8 to be passed, the support of at least 75% of the voting rights exercised on the resolution by the shareholders present in person, or represented by proxy, at the general meeting is required. ORDINARY RESOLUTION NUMBER 1: SIGNATURE OF DOCUMENTS AND AUTHORITY OF DIRECTORS Resolved that any director or the secretary of the Company be and is hereby authorised to do all such things and sign all such documents and agreements and procure the doing of all such things and signature of all documents as may be necessary and take all such action as they consider necessary for or incidental to the implementation of the resolutions passed at the general meeting of the Company and set out in this notice. In order for this ordinary resolution number 1 to be passed, the support of more than 50% (fifty per cent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the special general meeting is required. ORDINARY RESOLUTION NUMBER 2: CONDONATION OF DIRECTORS INTERESTS Resolved that, to the extent necessary, the entry into by the Company, and the implementation of, the heads of agreement, the letter of undertaking, the bridge loan agreement and the security documents be and is (to the extent required) hereby approved and/or ratified pursuant to section 75(7)(b) of the Companies Act. In order for this ordinary resolution number 2 to be passed, the support of more than 50% (fifty per cent) of the voting rights exercised on the resolution by shareholders present in person, or represented by proxy, at the special general meeting is required. 17