CIRCULAR TO SHAREHOLDERS OF EFORA

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions and interpretations commencing on page 6 of this Circular apply mutatis mutandis throughout this Circular including this cover page. Shareholders are referred to page 2 of this Circular, which sets out the action required of them with regard to the Rights Offer, full details of which are set out in this Circular. If you are in any doubt as to the action that you should take, please consult your Broker, CSDP, banker, legal advisor, accountant or other professional advisor immediately. If you have disposed of all of your Ordinary Shares, this Circular and the Form of Instruction should be forwarded to the purchaser to whom, or the Broker, CSDP or agent through whom you disposed of your Ordinary Shares, except that this Circular and Form of Instruction should not be forwarded or transmitted by you to any person in any territory other than South Africa unless the Rights Offer can lawfully be made to such person or in such territory. Letters of Allocation, which are renounceable, can only be traded in Dematerialised form and, accordingly, Efora has issued all Letters of Allocation in Dematerialised form. The electronic record for holders of Certificated Shares is being maintained by Link Market Services South Africa Proprietary Limited which has made it possible for holders of Certificated Shares to enjoy the same rights and opportunities as holders of Dematerialised Shares in respect of the Letters of Allocation. Only whole numbers of Ordinary Shares will be issued in terms of the Rights Offer and Shareholders will be entitled to rounded numbers of shares once the ratio of entitlement has been applied. Excess applications will be allowed. The Form of Instruction enclosed with this Circular is negotiable and may be traded on the JSE. JURISDICTION All transactions arising from the provisions of this Circular and the Form of Instruction shall be governed by and be subject to the laws of South Africa. The Rights Offer may be affected by the laws of the relevant jurisdictions of foreign Shareholders. Such foreign Shareholders should inform themselves about and observe any applicable legal requirements of such jurisdictions in relation to all aspects of this Circular that may affect them, including the Rights Offer. It is the responsibility of any foreign Shareholder to satisfy himself/herself as to the full observation of the laws and regulatory requirements of the relevant jurisdiction in connection with the Rights Offer, including the obtaining of any governmental, exchange control or other consent or the making of any filings which may be required, the compliance with other necessary formalities, the payment of any issue, transfer or other taxes or requisite payments due in such jurisdiction. The Rights Offer is further subject to any other applicable laws and regulations, including the Exchange Control Regulations. Any foreign Shareholder who is in doubt as to his/her position, including, without limitation, his/her tax status, should consult an appropriate independent professional advisor in the relevant jurisdiction without delay. The CSDP or Broker will ensure that where such persons are holding Ordinary Shares in Dematerialised form that the CSDP or Broker adheres to the above restrictions. Please refer to Annexure 2 of this Circular for further details in this regard. EFORA ENERGY LIMITED (formerly SacOil Holdings Limited) (Incorporated in the Republic of South Africa) (Registration number: 1993/000460/06) Share code: EEL ISIN: ZAE ( Efora or the Company ) CIRCULAR TO SHAREHOLDERS OF EFORA Relating to: a renounceable Rights Offer of 1.2 billion Ordinary Shares at an issue price of R0.50 per share, in the ratio of shares for every 100 Ordinary Shares held at the close of business on Friday, 27 July 2018; and enclosing: a Form of Instruction in respect of a Letter of Allocation (to be completed by holders of Certificated Shares only). Rights Offer opens at 09:00 on Monday, 30 July 2018 Rights Offer closes at 12:00 on Friday, 10 August 2018 The Directors of Efora whose names appear in the Corporate Information and Advisors section of this Circular, 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 the omission of which would make any statement in this Circular false or misleading and that they have made all reasonable enquiries to ascertain such facts and that this Circular contains all information required in law and by the Listings Requirements. Transaction Advisor and Sponsor Date of issue: Thursday, 19 July 2018 This Circular is available in English only. Copies of this Circular may be obtained from the registered office of Efora and PSG Capital whose addresses are set out in the Corporate Information and Advisors section of this Circular, as well as in electronic form from the Company s website ( and from the Transfer Secretaries. These documents will be available from Thursday, 19 July 2018 until Friday, 10 August 2018, both days inclusive.

2 CORPORATE INFORMATION AND ADVISORS DIRECTORS B Seruwe (Chairperson)* # T Kgogo (Chief Executive Officer) D Matroos (Chief Financial Officer) IS Sehoole* # T Masasa* # P Mngconkola* # * Non-executive # Independent COMPANY SECRETARY AND REGISTERED OFFICE Fusion Corporate Secretarial Services Proprietary Limited Block C, Unit 7, Southdowns Office Park Karee Street Irene, 0157 PO Box 68528, Highveld, st Floor 12 Culross Road Bryanston, 2021 PostNet Suite 211, Private Bag X75, Bryanston, 2021 Date and place of incorporation 1 February 1993 South Africa TRANSACTION ADVISOR AND SPONSOR PSG Capital Proprietary Limited (Registration number 2006/015817/07) 1st Floor, Ou Kollege 35 Kerk Street Stellenbosch, 7600 PO Box 7403, Stellenbosch, 7599 and at: 2nd Floor, Building 3 11 Alice Lane Sandton, 2196 PO Box , Benmore, 2010 TRANSFER SECRETARIES Link Market Services South Africa Proprietary Limited (Registration number 2000/007239/07) 13th Floor 19 Ameshoff Street Braamfontein, 2001 PO Box 10462, Johannesburg, 2000

3 TABLE OF CONTENTS Page Corporate information and advisors Inside front cover Action required by shareholders 2 Important dates and times 5 Definitions and interpretations 6 Circular to Shareholders 9 1. Introduction 9 2. Rationale for the Rights Offer and utilisation of funds 9 3. Particulars of the Rights Offer 9 4. Expenses Information on Efora Share trading history Responsibility statement Consents Documents available for inspection 17 Annexure 1 Table of entitlement 18 Annexure 2 Exchange Control Regulations 19 Annexure 3 Share trading history of Efora Shares 21 Annexure 4 Afric Oil acquisition announcements 22 Form of Instruction (where applicable) Enclosed 1

4 ACTION REQUIRED BY SHAREHOLDERS If you are in any doubt as to what action you should take, you should consult your Broker, CSDP, banker, legal advisor, accountant or other professional advisor immediately. If you have disposed of all your Ordinary Shares, please forward this Circular, together with the enclosed Form of Instruction, to the purchaser of such Ordinary Shares or the Broker, CSDP or other agent through whom you disposed of such Ordinary Shares. This Circular and Form of Instruction should not be forwarded to any person in any territory other than South Africa unless the Rights Offer can lawfully be made to such person or in such territory. Action required by shareholders of Certificated Shares A Form of Instruction for completion by Qualifying Shareholders who hold Certificated Shares is enclosed with this Circular and the relevant procedure for participation in the Rights Offer is set out below: a Letter of Allocation will be created in electronic form with the Transfer Secretaries; if you are a Qualifying Shareholder holding Certificated Shares and do not wish to subscribe for all of the Rights allocated to you as reflected in the Form of Instruction, you may either dispose of or renounce all or part of your entitlement as follows: if you wish to sell all or part of your entitlement, you must complete Form A in the enclosed Form of Instruction and return it to the Transfer Secretaries so as to be received by no later than 12:00 on Monday, 6 August The Transfer Secretaries will endeavour to procure the sale of Rights on the JSE on your behalf and to remit the net proceeds thereof in accordance with your instructions. In this regard, neither the Transfer Secretaries nor Efora will have any obligation or be responsible for any loss or damage whatsoever in relation to or arising from the timing of such sales, the price obtained, or the failure to dispose of such entitlements. Please note that the last day to trade Letters of Allocation is on Monday, 6 August 2018; and if you wish to renounce your entitlement in favour of any named renouncee, you must complete Form B in the enclosed Form of Instruction, and the renouncee must complete Form C in the enclosed Form of Instruction and return it to the Transfer Secretaries, to be received by no later than 12:00 on Friday, 10 August 2018, together with a bank-guaranteed cheque or bank draft or EFT swift reference number (EFT to be made into the Designated Bank Account, details of which are available from the corporate actions department of the Transfer Secretaries +27 (0) for the appropriate amount). If you are a Qualifying Shareholder holding Certificated Shares and wish to subscribe for all or part of your entitlement in terms of the enclosed Form of Instruction, you must complete the enclosed Form of Instruction in accordance with the instructions contained therein and lodge it together with the amount due in Rand in the form of a bank-guaranteed cheque or bankers draft or EFT swift reference number (EFT to be made into the Designated Bank Account, details of which are available from the corporate actions department of the Transfer Secretaries on +27 (0) ), with the Transfer Secretaries as follows: By hand to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited 13th Floor 19 Ameshoff Street Braamfontein By post to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited PO Box Johannesburg 2000 By facsimile to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited +27 (0) By electronic mail to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited specialprojects@linkmarketservices.co.za so as to be received by the Transfer Secretaries by no later than 12:00 on Friday, 10 August The Transfer Secretaries will not be responsible for any loss and/or damage whatsoever in relation to or arising from the late or non-receipt of faxed or ed Forms of Instruction or owing to Forms of Instruction being forwarded to any other facsimile or address other than those provided above. Forms of Instruction shall be deemed to be received on the date reflected in the Transfer Secretaries electronic or facsimile systems. Notwithstanding anything to the contrary, it is each Shareholder s responsibility to ensure that their Form of Instruction is received by the Transfer Secretaries. Efora and the Transfer Secretaries accept no responsibility and will not be held liable for any allocation of Rights Offer Shares pursuant to payment being made or alleged to have been made by way of electronic transfer and where proof of such payment 2

5 has not been received or purported proof of such payment being insufficient or defective for Efora together with the Transfer Secretaries, for any reason, not being able to reconcile a payment or purported payment with a particular application for Rights Offer Shares. If you are a renouncee, you may elect to receive your Rights Offer Shares in Dematerialised form by providing the information requested in respect of your CSDP or Broker in Form E in the enclosed Form of Instruction. In order to comply with recent legislative changes, the Rights Offer Shares may only be issued in Dematerialised form. In this regard: a) Qualifying Shareholders holding Certificated Shares who wish to receive the Rights Offer Shares allocated to them in Dematerialised form and who already have an account with a Broker or CSDP, will have their accounts at their Brokers or CSDPs credited with their Rights Offer Shares (provided that they have provided their Form of Instruction, and have elected Option 1 on Form E thereof, along with the relevant CSDP details, to the Transfer Secretaries on or before 12:00 on Monday, 6 August 2018; b) Qualifying Shareholders holding Certificated Shares who do not wish to hold the Rights Offers Shares allocated to them in Dematerialised form and prefer to hold their Rights Offer Shares in Certificated form, will be afforded the option to rematerialise their Dematerialised Rights Offer Shares and replace these with a physical Document of Title, provided that such Qualifying Shareholders have elected Option 3 on Form E of their Form of Instruction and provided their Form of Instruction to the Transfer Secretaries on or before 12:00 on Monday, 6 August 2018; or c) Qualifying Shareholders holding Certificated Shares who wish to receive the Rights Offers Shares allocated to them in Dematerialised form, but who do not have an account with a Broker or CSDP, will be issued with statements of allocation and will be required to appoint a Broker or CSDP so that Dematerialised Rights Offer Shares can be made available to them following implementation of the Rights Offer (such Shareholders will be required to provide the statement of allocation to their Broker or CSDP as proof of their holdings), provided that such Qualifying Shareholders have elected Option 2 on Form E of their Form of Instruction. Certificated Shareholders should indicate which of the above applies, when completing the Form of Instruction. Should a Certificated Shareholder contemplated in paragraph (a) above fail to provide the necessary Broker and CSDP account details and other information requested in the Form of Instruction, it will not be possible to credit such Shareholder s account at its Broker or CSDP with the Rights Offer Shares due to it, and such Shareholder will instead be issued with a statement of allocation. Should you be a Qualifying Shareholder holding Certificated Shares: contemplated in paragraph (a) above and have provided your Form of Instruction to the Transfer Secretaries on or before 12:00 on Monday, 6 August 2018, the Rights Offer Shares allocated to you will be credited to your Broker or CSDP account on Monday, 13 August 2018; or contemplated in paragraph (b) above, and have provided your Form of Instruction to the Transfer Secretaries on or before 12:00 on Monday, 6 August 2018, the share certificate for your Rights Offer Shares will be posted to you, at your risk, on Monday, 13 August 2018; or should you be a Shareholder contemplated in paragraph (c) above, the statement of allocation in respect of your Rights Offer Shares will be posted to you, at your risk, on Monday, 13 August Qualifying Shareholders who wish to rematerialise their Dematerialised Rights Offer Shares as provided for above and whose registered addresses in the Register are outside of the Common Monetary Area, or whose Ordinary Share certificates are restrictively endorsed in terms of the Exchange Control Regulations, should refer to paragraph 3.9 below. If the required documentation and payment has not been received in accordance with the instructions contained in the enclosed Form of Instruction (either from the Qualifying Shareholders or from any person in whose favour the Rights have been renounced) by 12:00 on Friday, 10 August 2018, then the Rights to those unsubscribed Rights Offer Shares will be deemed to have been declined and the Rights Offer entitlement will lapse. Action required by holders of Dematerialised Shares If you are a Qualifying Shareholder and have Dematerialised your Ordinary Shares, you will not receive a printed Form of Instruction and you should receive notification from your CSDP or Broker regarding the Rights to which you are entitled in terms of the Rights Offer. Your CSDP or Broker will credit your account with the number of Rights to which you are entitled and will contact you to ascertain: whether you wish to follow your Rights in terms of the Rights Offer and, if so, in respect of how many Rights Offer Shares; and if you do not follow all or any of your Rights: 3

6 - whether you wish to sell your Rights and, if so, how many Rights you wish to sell; - whether you wish to renounce your Rights and, if so, how many Rights and in favour of whom you wish to renounce those Rights; or - whether you wish your Rights to lapse. CSDPs effect payment in respect of Dematerialised Shareholders on a delivery versus payment basis. If you are a Qualifying Shareholder holding Dematerialised Shares and wish to follow your Rights in respect of the Rights Offer, you are required to notify your duly appointed CSDP or Broker of your acceptance of the Rights Offer in the manner and time stipulated in the custody agreement governing the relationship between yourself and your CSDP or Broker. If you are not contacted, you should proactively contact your CSDP or Broker and provide them with your instructions. If your CSDP or broker does not obtain instructions from you, they are obliged to act in terms of the mandate granted to them by you, or if the mandate is silent in this regard, not to subscribe for Ordinary Shares in terms of the Rights Offer. Efora does not take responsibility and will not be held liable for any failure on the part of any CSDP or Broker to notify you of the Rights Offer and/or to obtain instructions from you to subscribe for the Rights Offer shares and/or to sell the Rights allocated. 4

7 IMPORTANT DATES AND TIMES The definitions and interpretations commencing on page 6 of this Circular apply to this section Declaration announcement released on SENS and in the press Finalisation announcement released on SENS Publication of the Rights Offer Circular on the website of Efora Last day to trade in Ordinary Shares in order to participate in the Rights Offer (cum entitlement) Listing of and trading in the Letters of Allocation under the JSE Code EELN and ISIN ZAE on the JSE commences at 09:00 on Ordinary Shares commence trading ex-rights on the JSE at 09:00 on Rights Offer Circular and Form of Instruction distributed to Certificated Shareholders Record Date for determination of Shareholders entitled to participate in the Rights Offer (Initial Record Date) Rights Offer opens at 09:00 on Certificated Shareholders will have their Letters of Allocation credited to an electronic account held at the Transfer Secretaries at 9:00 on Tuesday, 17 July Thursday, 19 July Thursday, 19 July Tuesday, 24 July Wednesday, 25 July Wednesday, 25 July Wednesday, 25 July Friday, 27 July Monday, 30 July Monday, 30 July Dematerialised Shareholders will have their accounts at their CSDP or Broker credited with their entitlement at 9:00 on Circular, where applicable, posted to Qualifying Dematerialised Shareholders Last day for trading Letters of Allocation on the JSE Form of Instruction lodged by Certificated Shareholders wishing to sell all or part of their entitlement at the Transfer Secretaries by 12:00 on Listing of Rights Offer Shares and trading therein on the JSE commences Rights Offer closes at 12:00. Payment to be made and Form of Instruction lodged by Certificated Shareholders wishing to renounce or subscribe for all or part of the entitlement at the Transfer Secretaries* on Record Date for the Letters of Allocation (Final Record Date) Rights Offer Shares issued and posted to Shareholders in certificated form (where applicable) on or about CSDP or Broker accounts in respect of Dematerialised Shareholders will be updated with Rights Offer shares and debited with any payments due on Results of Rights Offer announced on SENS In respect of successful excess applications (if applicable), Rights issue Shares issued to Qualifying Dematerialised Shareholders and/or Share certificates posted to Qualifying Certificated Shareholders on or about In respect of unsuccessful excess applications (if any), Refund payments made to Certificated Shareholders on or about Monday, 30 July Monday, 6 August Monday, 6 August Tuesday, 7 August Friday, 10 August Friday, 10 August Monday, 13 August Monday, 13 August Monday, 13 August Wednesday, 15 August Wednesday, 15 August * CSDPs effect payment in respect of Dematerialised Shareholders on a delivery versus payment method. Notes: 1. Unless otherwise indicated, all times are South African times. 2. Shareholders may not Dematerialise or rematerialise their Ordinary Shares between Wednesday, 25 July 2018 and Friday, 27 July 2018, both dates inclusive. 3. Any amendments to the above dates and times will be announced on SENS. 5

8 DEFINITIONS AND INTERPRETATIONS In this Circular and the annexures hereto, unless otherwise stated or the context clearly indicates a contrary intention, the following words and expressions shall bear the meaning assigned to them hereunder. Words in the singular shall include the plural and vice versa, words signifying any one gender shall include the other genders and references to natural persons shall include juristic persons and associations of persons: Act or Companies Act Acquisition the Companies Act, No. 71 of 2008, as amended from time to time, including the Companies Regulations 2011; the Company s acquisition of, and subscription for shares constituting the entire issued share capital of Phembani Oil; Afric Oil Afric Oil Proprietary Limited incorporated in South Africa with registration number 1995/001866/07, a subsidiary of Phembani Oil; Authorised Share Capital Authorised but Unissued Share Capital Associate Board or Directors Broker Business Day Certificated Shares Certificated Shareholders Circular Common Monetary Area CSDP Dematerialise Dematerialised Shareholders Dematerialised Shares Designated Bank Account Documents of Title Efora or the Company or the Group Ordinary Shares of no par value of which Ordinary Shares have been issued and Ordinary Shares remain unissued; unissued Ordinary Shares forming part of the Authorised Share Capital; an associate as defined in the Companies Act; the board of directors of Efora; any person registered as a broking member (equities) in terms of the Rules of the JSE made in accordance with the provisions of the Financial Markets Act; any day of the week, excluding Saturdays, Sundays and all official South African public holidays; Ordinary Shares that have not been Dematerialised in terms of Strate, title to which is represented by Documents of Title; holders of Certificated Shares; this bound document, dated Thursday, 19 July 2018, incorporating a Form of Instruction, where applicable; collectively, South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland; a Central Securities Depository Participant defined as a participant in section 1 of the Financial Markets Act and appointed by individual Shareholders for purposes of, and in regard to, Dematerialisation of Documents of Title for the purpose of incorporation into Strate; the process whereby share certificates and any other Documents of Title to shares in a tangible form are Dematerialised into electronic records for the purposes of Strate; holders of Dematerialised Shares; Ordinary Shares which have been Dematerialised in terms of the requirements of Strate and the ownership of which is no longer evidenced by physical Documents of Title but by electronic records; the bank account, the details of which will be provided on request from the corporate actions department of the Transfer Secretaries, contactable during ordinary business hours on +27 (0) ; share certificates, certified transfer deeds, balanced receipts, or any other documents of title as the case may be; Efora (Registration number 1993/000460/06), a public company, incorporated in accordance with the laws of South Africa, whose shares are listed on the JSE; 6

9 Efora Shares or Ordinary Shares or Shares Efora Shareholders or Shareholders EFT Equity Bridge Loan Exchange Control Regulations ordinary shares of no par value in the issued ordinary share capital of Efora; the registered holders of Ordinary Shares; Electronic Funds Transfer; a loan granted to the Company by Gemcorp Africa Fund I Limited in the amount of USD12.5 million (R163.5 million at an exchange rate of R13.1/USD1) at an annual interest rate of 8.5%, which loan is repayable by 31 August 2018 from the proceeds of a Rights Offer; the Exchange Control Regulations, 1961, as amended, promulgated in terms of section 9 of the South African Currency and Exchanges Act, 1933 (No. 9 of 1933), as amended; Financial Markets Act the Financial Markets Act, No. 19 of 2012; Form of Instruction JSE Last Practicable Date Letter of Allocation Listings Requirements Phembani Oil a form of instruction in respect of the Letter of Allocation; JSE Limited (Registration number 2005/022939/06), a public company incorporated in South Africa and licensed as an exchange under the Financial Markets Act; Tuesday, 10 July 2018, the last practicable date prior to the finalisation of this Circular; a renounceable (nil paid) letter of allocation in electronic form relating to the Rights Offer; the Listings Requirements of the JSE, as amended from time to time by the JSE; Phembani Oil Propriety Limited, a company registered in South Africa with company registration number 2006/037679/07, a wholly-owned subsidiary of Efora; PIC the Public Investment Corporation (SOC) Limited (Registration number 2005/009094/06), a corporation created in terms of the Public Investment Corporation Act, 2004, as amended, and duly registered and incorporated under the laws of South Africa, the 60.72% shareholder in the Company as at the Last Practicable Date; Qualifying Shareholder a registered holder of Ordinary Shares on the Register of Shareholders of Efora as at 17:00 on the Record Date for the Rights Offer and which does not have its registered address in any jurisdiction in which it would be unlawful to make the Rights Offer; Rand or R Ratio of Entitlement Record Date for the Rights Offer Record Date for the Letters of Allocation Register Rights Rights Offer Rights Offer Share Price Rights Offer Shares SENS South Africa South African Rand, the official currency of South Africa; the number of Rights Offer Shares to which Shareholders are entitled to subscribe for in terms of the Rights Offer, being Ordinary Shares for every 100 Ordinary Shares held on the Record Date for the Rights Offer, and/or such proportionate lower number of Ordinary Shares in respect of a holding of less than 100 Ordinary Shares held on the Record Date for the Rights Offer; the last day for Shareholders to be recorded in the Register in order to participate in the Rights Offer, being close of business on Friday, 27 July 2018; the last day for Shareholders to be recorded in the Register in order for Shareholders to subscribe for the Rights Offer Shares, being Friday, 10 August 2018; means the register of Certificated Shareholders maintained by Efora and the sub-registers of Dematerialised Shareholders maintained by the relevant CSDPs; the entitlement to subscribe for Ordinary Shares pursuant to the Rights Offer; the Rights to subscribe for 1.2 billion Ordinary Shares at the Rights Offer Share Price in the ratio of Rights Offer Shares for every 100 Ordinary Shares held on the Record Date for the Rights Offer; the price per new Ordinary Share to be offered to Shareholders in terms of the Rights Offer being R0.50 per Share; the 1.2 billion Ordinary Shares representing approximately 324.6% of the current issued share capital of the Company and which are the subject of the Rights Offer; the Stock Exchange News Service of the JSE; the Republic of South Africa; 7

10 Strate Subsidiary Transaction Advisor and Sponsor or PSG Capital the settlement and clearing system used by the JSE, managed by Strate Proprietary Limited (Registration number 1998/022242/07), a limited liability private company duly incorporated in South Africa; a subsidiary as defined in the Companies Act; PSG Capital Proprietary Limited (Registration number 2006/015817/07), a private company duly incorporated in accordance with the laws of South Africa; Transfer Secretaries Link Market Services South Africa Proprietary Limited (Registration number 2000/007239/07), a private company incorporated in accordance with the laws of South Africa, being the transfer secretaries of Efora; Undertaking the letter of undertaking entered into between Efora and the PIC, dated Monday, 28 May 2018, in terms of which the PIC agrees to follow its Rights in terms of the Rights Offer; and VAT Value Added Tax. 8

11 EFORA ENERGY LIMITED (formerly SacOil Holdings Limited) (Incorporated in the Republic of South Africa) (Registration number: 1993/000460/06) Share code: EEL ISIN: ZAE ( Efora or the Company ) Directors B Seruwe (Chairperson)* # T Kgogo (Chief Executive Officer) D Matroos (Chief Financial Officer) IS Sehoole* # T Masasa* # P Mngconkola* # * Non-executive # Independent CIRCULAR TO SHAREHOLDERS 1. INTRODUCTION 1.1 Shareholders are referred to the announcement on SENS, 17 July 2018, in which Shareholders were advised that the Board had resolved to pursue the implementation of the Rights Offer. 1.2 In terms of the Undertaking, Efora has received commitment from its major shareholder, the PIC, to follow its rights in terms of the Rights Offer. 1.3 In terms of the Rights Offer, Shareholders recorded in the Register at the close of trade on Friday, 27 July 2018, will receive the Rights to subscribe for Rights Offer Shares on the basis of Rights for every 100 Ordinary Shares held, for subscription at R0.50 per Rights Offer Share. Only whole numbers of Ordinary Shares will be issued and Shareholders will be entitled to rounded numbers of Ordinary Shares once the ratio has been applied. Excess applications will be allowed. 1.4 The JSE has agreed to the listing of the Rights Offer Shares and the purpose of this Circular is to furnish Shareholders with relevant information relating to the Rights Offer, the action required and the implications thereof, in accordance with the Companies Act and the Listings Requirements. 2. RATIONALE FOR THE RIGHTS OFFER AND UTILISATION OF FUNDS 2.1 On Tuesday, 6 March 2017, the Company announced the Acquisition. Phembani s only asset is a 71% direct interest in Afric Oil, one of the largest independent fuel distributors in South Africa, distributing fuel products (diesel, petrol and paraffin) to a diversified client base that includes local and national government, mining, construction, transport, manufacturing, parastatals, resellers and agricultural clients. 2.2 On Thursday, 31 May 2017, Efora released on SENS its provisional condensed audited results for the year ended 28 February 2017, wherein it was disclosed that the Company had entered into the Equity Bridge Loan, to raise US$12.5 million that would be repaid from the proceeds of the Rights Offer part of the proceeds of the US$12.5 million which to fund the Phembani Acquisition. 2.3 The proceeds from the Rights Offer will be utilised to settle the Equity Bridge Loan of US$12.5 million and to provide capital to fund the Group s operations for the foreseeable future. In addition, the Company is engaging with various parties on numerous value accretive acquisition opportunities in line with the Company s growth strategy. Funds raised from the Rights Offer will also be utilised to fund such potential acquisitions. 3. PARTICULARS OF THE RIGHTS OFFER 3.1 Terms of the Rights Offer Efora hereby offers to Qualifying Shareholders a total of 1.2 billion Ordinary Shares for subscription, upon the terms and conditions set out in this Circular and in the attached Form of Instruction, by way of renounceable 9

12 Rights, at a subscription price of R0.50 per Ordinary Share on the basis of Rights Offer Shares for every 100 Ordinary Shares held by Qualifying Shareholders at the close of trade on the Record Date for the Rights Offer. Efora will raise a maximum of R600 million in terms of the Rights Offer The subscription price represents a discount of 16.7% to the 30-day volume weighted average traded price of Efora s Ordinary Shares of R0.583, as at Friday, 6 July 2018, being the end of the week prior to announcing the Rights Offer Qualifying Shareholders recorded in the Register of Efora at the close of business on Friday, 27 July 2018, will be entitled to participate in the Rights Offer The enclosed Form of Instruction contains details of the Rights to which holders of Certificated Shares are entitled, as well as the procedure for acceptance and/or sale and/or renunciation of all or part of those Rights. Holders of Dematerialised Shares will be advised of the Rights to which they are entitled as well as the procedure for acceptance and/or sale and/or renunciation of all or part of those Rights by their CSDP or Broker in terms of the custody agreement entered into between the Shareholder and his CSDP or Broker, as the case may be The subscription price is payable in full, in Rand, by Qualifying Shareholders holding Certificated Shares on acceptance of the Rights Offer. CSDPs will make payment, on a delivery versus payment basis, in respect of Qualifying Shareholders holding Dematerialised Shares who have accepted the Rights Offer. Qualifying Shareholders holding Dematerialised Shares who have accepted the Rights Offer must ensure that the necessary funds are deposited with the relevant CSDP or Broker, as the case may be The Rights Offer shares will, upon allotment and issue, rank pari passu with all other existing Ordinary Shares in terms of both voting rights and dividends The Letters of Allocation in respect of the Rights Offer are negotiable and will be listed on the JSE on Wednesday, 25 July 2018, under the JSE code EELN and ISIN ZAE The Rights Offer Shares cannot be traded before such Shares are listed on the JSE on Tuesday, 7 August While the Rights Offer has not been underwritten, the PIC has provided Efora with an undertaking that it will follow its rights in full. 3.2 Opening and closing dates of the Rights Offer The Rights Offer will open at 09:00 on Monday, 30 July 2018 and will close at 12:00 on Friday, 10 August Entitlement The table of entitlement illustrating the number of Rights Offer Shares to which Qualifying Shareholders will be entitled is set out in Annexure 1 to this Circular. The entitlement of each Qualifying Shareholder is reflected in the appropriate block in the Form of Instruction, which is enclosed with this Circular. If you are a Qualifying Shareholder and hold Dematerialised Shares you will not receive a printed Form of Instruction. Qualifying Shareholders holding Dematerialised Shares will have their accounts automatically credited with their entitlements in accordance with Annexure Fractional entitlement The whole number of Rights to subscribe for Rights Offer Shares to which Qualifying Shareholders will become entitled will be determined by the Ratio of Entitlement. Only whole numbers of Ordinary Shares will be issued and Shareholders will be entitled to subscribe for rounded numbers of Ordinary Shares once the Ratio of Entitlement has been applied. Fractional entitlements of 0.5 or greater will be rounded up and less than 0.5 will be rounded down. 3.5 Minimum subscription and undertaking The Rights Offer is not conditional on any minimum subscription being obtained Pursuant to the provisions of the Undertaking, the PIC provided Efora with a commitment to follow all of its rights in terms of the Rights Offer and to subscribe for all the Ordinary Shares to which it is entitled under the Rights Offer, as set out below: Number of Ordinary Shares held in Efora before the Rights Offer Number of Rights Offer Shares Offered % of Rights Offer Shares Maximum number of Ordinary Shares held in Efora after the Rights Offer by PIC % In terms of the Undertaking, there will be no commitment or other fees payable to the PIC. 10

13 3.6 Procedures for acceptance If you are a Qualifying Shareholder holding Certificated Shares and/or have had Rights renounced in your favour, and wish to subscribe for all or part of your entitlement in terms of the enclosed Form of Instruction, you must complete the enclosed Form of Instruction in accordance with the instructions contained therein and lodge it together with payment of the subscription price with the Transfer Secretaries at the addresses set out in paragraph of this Circular, so as to be received by the Transfer Secretaries by no later than 12:00 on Friday, 10 August Once received by the Transfer Secretaries, the acceptance is irrevocable and may not be withdrawn If payment is not received on or before 12:00 on Friday, 10 August 2018, the day of the closing of the Rights Offer, the Qualifying Shareholder or renouncee concerned will be deemed to have declined the Rights Offer to acquire Rights Offer Shares pursuant to the Rights Offer Qualifying Shareholders holding Certificated Shares are advised to take into consideration postal delivery times when posting their Forms of Instruction, as no late postal deliveries will be accepted. Qualifying Shareholders are advised to deliver their completed Forms of Instruction together with their bank-guaranteed cheques or bankers drafts, or EFT swift reference number by hand or by courier, where possible to the Transfer Secretaries as set out in the enclosed Form of Instruction. Forms of Instruction together with proof of EFT payment may also be faxed or ed to the Transfer Secretaries in accordance with the provisions of the section of this Circular titled Action Required by Shareholders If you are a Qualifying Shareholder and have Dematerialised your Ordinary Shares you will not receive a printed Form of Instruction. You should receive notification from your CSDP or Broker regarding the Rights to which you are entitled in terms of the Rights Offer If you are a Qualifying Shareholder holding Dematerialised Shares and wish to follow your Rights in respect of the Rights Offer, you are required to notify your duly appointed CSDP or Broker of your acceptance of the Rights Offer in the manner and time stipulated in the custody agreement governing the relationship between yourself and your CSDP or Broker Efora does not take responsibility and will not be held liable for any failure on the part of any CSDP or Broker to notify you of the Rights Offer and/or to obtain instructions from you to subscribe for the Rights Offer Shares and/or to sell the Rights allocated. 3.7 Procedures for sale and renunciation If you are a Qualifying Shareholder holding Certificated Shares and do not wish to subscribe for all of the Rights allocated to you as reflected in the Form of Instruction, you may either dispose of or renounce all or part of your entitlement as follows: if you wish to sell all or part of your entitlement, you must complete Form A in the enclosed Form of Instruction and return it to the Transfer Secretaries to be received by no later than 12:00 on Monday, 6 August The Transfer Secretaries will endeavour to procure the sale of Rights on the JSE on your behalf and to remit the net proceeds thereof in accordance with your instructions. In this regard, neither the Transfer Secretaries nor Efora will have any obligation or be responsible for any loss or damage whatsoever in relation to or arising from the timing of such sales, the price obtained, or the failure to dispose of such entitlements; and if you wish to renounce your entitlement or any part thereof in favour of any named renouncee, you must complete Form B in the enclosed Form of Instruction, and the renouncee must complete Form C in the enclosed Form of Instruction and return it to the Transfer Secretaries, to be received by no later than 12:00 on Friday, 10 August 2018, together with a bank-guaranteed cheque or bank draft or an EFT accompanied by an EFT swift reference number for the appropriate subscription amount. If you wish to renounce parts of your entitlement in favour of different renouncees, you may copy Form B and use a copied Form B for each additional renouncee If you are a Qualifying Shareholder holding Dematerialised Shares and wish to renounce or sell some or all of the Rights allocated to you as a holder of Dematerialised Shares, you should make the necessary arrangements with your CSDP or Broker in the manner and time stipulated in the custody agreement governing the relationship between yourself and your CSDP or Broker. 3.8 Payment Payment by holders of Certificated Shares The amount due on acceptance of the Rights Offer is payable in Rand. 11

14 A banker s draft drawn on a registered bank or a bank-guaranteed cheque drawn on a South African bank (each of which should be crossed and marked not transferable and, in the case of a cheque, with the words or bearer deleted) in favour of Efora Energy Limited Rights Offer in respect of the amount due or an EFT accompanied by an EFT swift reference number (obtainable from Link Market Services South Africa Proprietary Limited, at +27 (0) ), together with a properly completed Form of Instruction, should be clearly marked Efora Energy Limited Rights Offer, and delivered to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited 13th Floor, 19 Ameshoff Street, Braamfontein so as to be received by no later than 12:00 on Friday, 10 August 2018, or may be posted, at the risk of the Shareholder or his renouncee, to: Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited PO Box 10462, Johannesburg, 2000 so as to be received by no later than 12:00 on Friday, 10 August 2018, or may be faxed to (only in the case where payment is by way of EFT): Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited +27 (0) so as to be received by no later than 12:00 on Friday, 10 August 2018, or may be ed to (only in the case where payment is by way of EFT): Efora Energy Limited Rights Offer c/o Link Market Services South Africa Proprietary Limited specialprojects@linkmaketservices.co.za so as to be received by no later than 12:00 on Friday, 10 August All bank-guaranteed cheques or bankers drafts received by the Transfer Secretaries will be deposited immediately for payment. The payment as referred to in paragraph will constitute an irrevocable acceptance by the Shareholder or renouncee of the Rights Offer upon the terms and conditions set out in this Circular and in the enclosed Form of Instruction. In the event that any cheque or banker s draft is dishonoured, Efora, in its sole discretion, may treat the relevant acceptance as void or may tender delivery of the relevant Rights Offer Shares to which it relates against payment in cash of the issue price for such Ordinary Shares Money received in respect of an application that is rejected or otherwise treated as void by Efora, or which is otherwise not validly received in accordance with the terms stipulated, will be posted by registered post by way of a cheque drawn (without interest) in Rand to the applicant concerned, at the applicant s risk, on or about Wednesday, 15 August If the applicant concerned is not a Shareholder and gives no address in the attached Form of Instruction, then the relevant refund will be held by Efora until collected by the applicant and no interest will accrue to the applicant in respect thereof Payment by holders of Dematerialised Shares Payment will be effected on the Shareholder s behalf in Rand by the CSDP or Broker. The CSDP or Broker will make payment in respect of Qualifying Shareholders holding Dematerialised Shares on a delivery versus payment basis. 3.9 Exchange Control Regulations An outline of the applicable Exchange Control Regulations is available in Annexure 2 to this Circular. Relevant Qualifying Shareholders are advised to acquaint themselves with these regulations In the case of Qualifying Shareholders who wish to rematerialise their Dematerialised Rights Offer Shares as provided for above and whose registered addresses in the Register are outside of the Common Monetary Area, or where the relevant Ordinary Share certificates are restrictively endorsed in terms of the Exchange Control Regulations, the following will apply: for non-residents who are emigrants, the replacement Documents of Title will be sent to the Qualifying Shareholder s authorised dealer in foreign exchange in South Africa controlling their blocked assets; and 12

15 3.10 JSE listings for all other non-residents, the replacement Documents of Title will be restrictively endorsed non-resident in terms of the Exchange Control Regulations. The Issuer Regulation Division of the JSE has approved the listing of: the Letters of Allocation in respect of all of the 1.2 billion Rights Offer Shares with effect from the commencement of trade on Wednesday, 25 July 2018, to the close of trade on Monday, 6 August 2018, both days inclusive; and billion Rights Offer Shares with effect from the commencement of trade on Tuesday, 7 August Documents of title New Ordinary Share certificates to be issued to Qualifying Shareholders holding Certificated Shares or renouncees who have opted to rematerialise their Dematerialised Rights Offer Shares to which they are entitled as contemplated in the section titled Action Required By Shareholders, will be posted to persons entitled thereto, by registered post, at the risk of the Shareholders concerned, on or about Monday, 13 August 2018, provided that the Form of Instruction in respect thereof has been provided to the Transfer Secretaries before 12:00 on Friday, 10 August Qualifying Shareholders receiving the Rights Offer Shares must note that such Certificated Shares are not good for delivery in respect of future trades on the JSE until they have been Dematerialised Qualifying Shareholders holding Dematerialised Shares who have applied for, and been allotted, Ordinary Shares under the Rights Offer will have their accounts updated with the Rights Offer Shares to which they are entitled and in respect of which they have accepted the Rights Offer, on Monday, 13 August Taxation 4. EXPENSES Shareholders are advised to consult their tax and financial advisors regarding any taxation implications pertaining to them regarding the acceptance of their Rights in terms of the Rights Offer. 4.1 It is estimated that Efora s expenses relating to the Rights Offer will amount to approximately R1.6 million. The expenses (excluding VAT) relating to the Rights Offer have been detailed below. Nature of expense Paid/Payable to R 000 JSE documentation inspection fee JSE 26 JSE listing fee JSE 225 Printing, publication and distribution GroundPepper 100 Transaction Advisor and Sponsor PSG Capital Transfer Secretaries Link 40 Contingency 109 Total Other than set out above, Efora has incurred no preliminary expenses in relation to the Rights Offer during the three years preceding the date of this Circular. 4.3 The expenses of the Rights Offer will be written off against the stated capital. 5. INFORMATION ON EFORA 5.1 Overview of business Efora Energy Limited is an independent, pan-african full-cycle oil and gas company based in South Africa and is listed on the JSE. The Company has a diverse portfolio of assets spanning production in Egypt; exploration in the Democratic Republic of Congo; midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout Southern Africa. Our focus as a Group is on delivering energy for the African continent by using Africa s own resources to meet the significant growth in demand expected over the next decade Egypt Lagia Oil Field The Lagia Oil Field is an onshore block located on the Sinai Peninsula in Egypt, directly adjacent to the Gulf of Suez. It was wholly acquired by Efora on 22 October 2014 through the acquisition of Mena International Petroleum Company Limited ( Mena ) and is operated by PetroSinai, a company jointly owned by Mena and the Egyptian General Petroleum Corporation ( EGPC ) in accordance with Egyptian Law 11 of Production sharing for the Lagia Development Lease is governed by the terms of the Lagia Concession whereby 35% of net production is treated as cost oil, and is available to be used by Mena for the recovery of qualified costs, expenses and expenditures incurred in respect of exploration, development and related 13

16 operations. If the proportion of net production allocated for cost recovery exceeds costs available for recovery, EGPC is entitled to receive a proportion of this excess cost oil or cost gas in accordance with the share allocated for profit oil. Of the net production from the Lagia Development Lease 65% must be shared between Mena and EGPC as profit oil. The Lagia operations consist of 10 production wells that have been connected to the installed steam facilities to support a thermal recovery process on the existing production wells. As a result of the complex nature of development for this asset culminating in excessive water content and suboptimal steam injection for enhanced oil recovery, the production performance has been below the expectations of the Board for the capability of the field. The Board commissioned an in-depth review of the Lagia reservoir characterisation for overall field optimisation and drilled a pilot well, Lagia 14, at the end of the last financial year. This resulted in an increase in production from the field but more importantly, gave us additional insight into optimal completion techniques for the field, namely to isolate production from target reservoirs to reduce the water cut. The overall objective of this review is to enable the field for increased recovery and improved economics in a higher oil price environment and expectations are that the technical insights gained from Lagia 14 will inform the planning around the new development wells Afric Oil Efora acquired a controlling interest in Afric Oil, via the acquisition of 100% of Phembani that provided a 71% direct interest in Afric Oil, one of the largest independent fuel distributors in South Africa. Afric Oil is distributing circa 25 million litres of fuel product (diesel, petrol and paraffin) monthly to a diversified client base that includes local and national government, mining, construction, transport, manufacturing, parastatals, resellers and agricultural clients. The acquisition also provided Efora with its first operational footprint in South Africa, as well as entry into Zimbabwe. Afric Oil has three owned depots in the Boland, Western Cape Province, Beitbridge on the Zimbabwe/RSA border and Randfontein, Gauteng. Afric Oil has its own distribution capabilities with ownership of a fleet of over 30 product distribution vehicles. The Company released announcements on SENS on 6 March 2017 and 31 May 2017 setting out the terms of the Afric Oil acquisition by Efora, the details of which are set out in Annexure 4. Since the acquisition of the Afric Oil interest, management has been focussed on integrating and optimising the business and undertaking certain restructuring activities that would improve the operational efficiency of the business. These activities were largely completed, and the operational performance of the business has improved with access to new working capital facilities and improvements in the business. The Company released announcements on SENS on 6 March 2017 and 31 May 2017 setting out the terms of the Afric Oil acquisition by Efora, the details of which are set out in Annexure DRC Block III Block III is located in the north-eastern part of the country, bordering Uganda. It is on the DRC side of the Albertine Graben Basin, which is part of the East African Rift System. Efora s interest in the block is held through wholly owned Efora DRC SARL which holds 12.5% of the asset. The operator of Block III, Total E&P RDC ( Total ), owns 66.7% of the asset with the remainder held by the DRC government (15%) and Divine Inspiration Group Proprietary Limited (5.8%). During June 2016, Total successfully completed the acquisition of 244 km of 2D seismic data and Total, operator of Block III, continues to evaluate the seismic data obtained over the block. It is likely that a well could be drilled as early as 2019 on the assumption that economically and technically viable prospects and an identifiable well location are established. As reported previously, the seismic survey did not encroach on the Virunga National Park. Total will continue to carry the Group s exploration and appraisal costs in line with the cost carry arrangement under the terms of a farm-in agreement dated 1 March 2011, which ceases if commercially viable resources are discovered and a development plan is approved. The operating licence was again renewed in January 2018 and will expire on 26 January Total will use this extension to complete the evaluation of the block Nigeria Crude Trading Allocation Efora formed a joint venture company with EER called SacOil Energy Equity Resources Limited ( SEER ) that is the contracting party to the agreement for the purchase of Nigerian Crude Oil from the Nigerian National Petroleum Corporation ( NNPC ), ( the Crude Oil Agreement ). SEER secured its first 12-month crude oil agreement with NNPC in April 2016 and this followed by two further awards in January 2017 and May 2018 awarded under the NNPC tender process. The Crude Oil Agreement provides SEER with the right to acquire barrels of crude oil from NNPC for onward sale, which is dependent on the aggregate crude production available in Nigeria and the prevailing global oil price. SEER has managed to lift five cargos over the last two years that contributed to Efora s business. 14