ACTION REQUIRED All Shareholders Detailed action required by Shareholders is set out on page 4 of this Circular.

Transcription

1 This Circular IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION The definitions commencing on page 5 of this Circular have been used in this front cover. ACTION REQUIRED All Shareholders Detailed action required by Shareholders is set out on page 4 of this Circular. DISCLAIMER RARE does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a Dematerialised Shareholder to notify such Shareholder of the details of this Circular. The summary of the Exchange Control Regulations provisions detailed in paragraph 11 of this Circular is intended only as a guide and is therefore not a comprehensive statement of the Exchange Control Regulations. RARE Shareholders who are in any doubt as to the appropriate course of action to take should consult their professional advisors. 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 Claw-back 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 Claw-back 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 Clawback 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 Claw-back 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 adviser in the relevant jurisdiction without delay. The rights that are represented by the Form of Instruction in respect of the Letters of Allocation are valuable and may be sold on the JSE. Letters of Allocation can, however, only be traded in Dematerialised form and accordingly, all Letters of Allocation have been issued in Dematerialised form. RARE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) Registration Number: 2002/025247/06 Share Code: RAR ISIN: ZAE ( RARE or the Company or the Group ) CIRCULAR TO RARE ShareholderS relating to: a renounceable Claw-back Offer to RARE Shareholders of Claw-back Shares of no par value in the Share Capital of RARE at a Subscription Price of 8 cents per Claw-back Share, in the ratio of Claw-back Shares for every 100 RARE shares held at the close of trade on Friday, 7 September 2012; and enclosing: a Form of Instruction in respect of a Letter of Allocation providing for the acceptance and/or renunciation and/or sale of all or part of the Claw-back Entitlement(s) embodied in the Letter of Allocation in terms thereof for the use of Certificated Shareholders only. Claw-back Offer opens at 09:00 on Monday, 10 September 2012 Claw-back Offer closes at 12:00 on Friday, 28 September 2012 Designated and Corporate Advisor Auditors and Reporting Accountants 10 September 2012 This Circular is only available in English. Copies of this Circular may be obtained at the registered offices of the Company from Monday, 10 September 2012, to Friday, 28 September 2012, or it can be downloaded from the Company s website at

2 CORPORATE INFORMATION Directors T. Siyolo* (Chairman) W. van Coller (Chief Executive Officer) R. Viljoen (Financial Director) M.T. Lategan*~ P. du Plessis*~* H. Odendaal*~ S.J.D.T. Potgieter* *Non-Executive ~Independent *~*Lead Independent Non-Executive Date and place of incorporation 11 October 2002, South Africa Designated and Corporate Advisor PSG Capital Proprietary Limited Registration Number: 2006/015817/07 1st Floor, Building 8 Inanda Greens Business Park 54 Wierda Road West Wierda Valley Sandton, 2196 (PO Box , Benmore, 2010) Telephone: (011) Facsimile: (011) Secretary and Registered Office R. Viljoen 22 Old Vereeniging Road Kliprivier Midvaal, 1871 (PO Box , Alrode, 1451) Telephone: (011) Facsimile: (011) Auditors and Reporting Accountants Greenwoods Chartered Accountants Practice number: E 24th Floor, Absa Centre Heerengracht Cape Town, 8001 (PO Box 3311, Cape Town, 8000) Telephone: (021) Facsimile: (021) Transfer Office Computershare Investor Services Proprietary Limited Registration Number: 2004/003647/07) Ground Floor, 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Telephone: (011) Facsimile: (011) and at 1st Floor, Ou Kollege 35 Kerk Street Stellenbosch, 7600 (PO Box 7403, Stellenbosch, 7599) Telephone: (021) Facsimile: (021)

3 TABLE OF CONTENTS Page Corporate information Inside front cover Salient features of the Claw-back Offer 2 Important dates and times 3 Actions required by Shareholders 4 Definitions 5 Circular to RARE Shareholders 1. Introduction 7 2. Purpose and rationale of the Claw-back Offer 8 3. Terms of the Claw-back Offer 8 4. Directors and executive management 9 5. Major and controlling Shareholders 9 6. JSE listings 9 7. Financial information 9 8. Share capital of the Company Claw-back Entitlement Procedure for acceptance, renunciation and sale of Claw-back Entitlement Exchange control regulations Tax consequences of the Claw-back Offer Jurisdiction Opinions and recommendations Directors authority to issue Shares Directors responsibility statement Litigation statement Corporate governance Material contracts Expenses of the Claw-back Offer Consents Material changes to the Company Documents and consents available for inspection 15 Annexure 1 Pro forma financial information of the Company 16 Annexure 2 Independent reporting accountants limited assurance report on the pro forma financial information of the Company 20 Annexure 3 Table of Entitlement 22 Annexure 4 The Company s corporate governance report 23 Annexure 5 Information on the Directors and management of the Company 27 Annexure 6 Share trade history of RARE shares 31 Form of Instruction for a RARE Certificated Shareholder in respect of a Letter of Allocation Enclosed 1

4 SALIENT FEATURES OF THE Claw-back Offer The definitions commencing on page 5 of this Circular apply to this section. 1. INTRODUCTION 1.1 The Company and the Subscriber have entered into the Subscription Agreement in terms of which the Subscriber has subscribed for new ordinary Shares of no par value in the ordinary Share Capital of RARE at a Subscription Price of 8 cents per Share for the Subscription Amount. The Subscription Price represents, due to the nature and purpose of the Claw-back Offer, a discount of approximately 31% to the 30 day volume weighted average Share price of RARE as at 25 May 2012 (being the date when the original Subscription Agreement was entered into). 1.2 The attached Form of Instruction in respect of the Letter of Allocation contains details of the Claw-back Entitlement to which Certificated Shareholders are entitled, as well as the procedures for acceptance, sale or renunciation of those Claw-back Entitlements. Dematerialised Shareholders will be advised by their CSDP or broker of the Claw-back Entitlement to which they are entitled as well as the procedure for acceptance, sale or renunciation of those Claw-back Entitlements. 1.3 The JSE has approved the listing of the: Claw-back Shares from the commencement of trade on Monday, 3 September 2012; and Letters of Allocation from the commencement of trade on Monday, 3 September 2012, until the close of trade on Thursday, 20 September Upon allotment and issue, the Claw-back Shares will rank pari passu in all respects with the ordinary Shares currently in issue. 2. PURPOSE AND RATIONALE OF THE Claw-back Offer 2.1 The rationale of the Claw-back Offer being to: recapitalise the business following the introduction of a new management team during April 2012 and in the wake of a poor performance during the preceding 6 month period as a result of substantial provisions against old stock and debtors; and introduce a long term strategic BEE partner and secure a unique position within the industry as a majority black owned listed Company. 2.2 As a result of the aforementioned factors, the Board of Directors have therefore resolved to raise additional equity capital through the Claw-back Offer. 2.3 It was a condition precedent of the Subscription Agreement that Shareholders vote in favour and that the TRP approve of a waiver of a mandatory offer in terms of section 123 of the Act in the event that the Subscriber surpasses the 35% shareholding level as a result of the Claw-back Offer. Pursuant to the recent Supplementary Circular dated 13 July 2012 and the Waiver Circular to Shareholders dated 1 June 2012, including the notice of a general meeting, all of the resolutions tabled for voting at the aforementioned meeting (which was held on Friday, 17 August 2012) were duly passed and the TRP has since granted the waiver of the Mandatory Offer. 3. FINANCIAL EFFECTS The financial effects of the Claw-back Offer are set out below. Before Unaudited 6 months ended 31 Dec 2011 R After Unaudited 6 months ended 31 Dec 2011 R % Change Loss per ordinary Share (cents) % Diluted loss per ordinary Share (cents) % Headline loss per Share from continuing operations (cents) % Headline loss per Share from discontinued operations (cents) % Net asset value per Share (cents) % Net tangible asset value per Share (cents) % Number of ordinary Shares in issue ( 000) % Weighted average number of ordinary Shares in issue ( 000) % Detailed assumptions in respect of the above financial effects are included in Annexure 1 to this Circular. 2

5 IMPORTANT DATES AND TIMES The definitions commencing on page 5 of this Circular apply to this section. General meeting approving the waiver of the Mandatory Offer at 10:00 (as per circular to Shareholders dated 13 July 2012) Declaration announcement released on SENS Finalisation announcement released on SENS Last day to trade in RARE Shares in order to qualify to participate in the Claw-back Offer (cum Entitlement) on Listing of Letters of Allocation on the JSE under the JSE code RARN and ISIN ZAE at commencement of trading on RARE Shares commence trading ex-claw-back Entitlement on the JSE at commencement of trading on Listing of Claw-back Shares Issue of Claw-back Shares to Subscriber Record Date for participation in the Claw-back Offer at the close of trade on Claw-back Offer Circular and Form of Instruction posted to Shareholders, where applicable Claw-back Offer opens at commencement of trading on Dematerialised Shareholders accounts at their CSDP or broker automatically credited with their Entitlement Certificated Shareholders Entitlements will be credited to an account held with the Transfer Secretaries Last day to trade in Letters of Allocation on the JSE on Trade in Claw-back Offer Shares commences Claw-back Offer closes payments to be made and Form of Instruction in respect of Letters of Allocation lodged by Certificated Shareholders by 12:00 (see note 5) on Record Date for Letters of Allocation Dematerialised Shareholders accounts updated with Claw-back Shares to the extent accepted and debited with the relevant costs by their CSDP or broker and new RARE Share certificates posted to Certificated Shareholders (see note 5) on Results of Claw-back Offer announcement released on SENS on or about 2012 Friday, 17 August Friday, 17 August Friday, 24 August Friday, 31 August Monday, 3 September Monday, 3 September Monday, 3 September Monday, 3 September Friday, 7 September Monday, 10 September Monday, 10 September Monday, 10 September Monday, 10 September Thursday, 20 September Friday, 21 September Friday, 28 September Friday, 28 September Monday, 1 October Monday, 1 October Notes: 1. Dematerialised Shareholders are required to notify their duly appointed CSDP or broker of their acceptance or otherwise of the Claw-back Offer in the manner and time stipulated in the agreement governing the relationship between such Shareholder and their CSDP or broker. 2. All times indicated are South African times unless otherwise stated. 3. Share certificates may not be dematerialised or rematerialised between Monday, 3 September 2012, and Friday, 7 September 2012, both days inclusive. 4. The CSDP/broker accounts of Dematerialised Shareholders will be automatically credited with new RARE Shares to the extent to which they have accepted the Claw-back Offer. RARE Share certificates will be posted, by registered post at the Shareholders risk, to Certificated Shareholders in respect of the Claw-back Offer Shares which have been accepted. 5. CSDPs or brokers effect payment in respect of Dematerialised Shareholders on a delivery versus payment method. 3

6 ACTIONS REQUIRED BY ShareholderS The definitions commencing on page 5 of this Circular apply to this section. 1. DEMATERIALISED ShareholderS If you hold RARE Shares in Dematerialised form (including where you have elected own-name registration) you will not receive a printed Form of Instruction. Your CSDP or broker will contact you to ascertain: whether you wish to follow all or some of your Entitlements in terms of the Claw-back Offer and in respect of how many Claw-back Offer Shares; whether you wish your CSDP or broker to endeavour to procure the sale of your Entitlements on the JSE on your behalf and if so, in respect of how many rights; whether you wish to renounce your Entitlements and if so, how many Entitlements you wish to renounce and the details of the renouncee; or whether you wish for your Entitlements in respect of the Claw-back Offer to lapse. Your CSDP or broker will credit your account with the number of Entitlements to which you are entitled in terms of the Claw-back Offer. If you do not hear from your CSDP or broker, you should contact them and furnish them with your instructions. If your CSDP or broker does not obtain instructions from you, they are obliged to act in terms of the custody agreement entered into between you and them. 2. CERTIFICATED ShareholderS A Form of Instruction is enclosed for use by Certificated Shareholders only. The rights in respect of such forms are renounceable and can be sold on the JSE. If you hold your RARE Shares in Certificated form and you wish to subscribe for some or all of the Claw-back Offer Shares allocated to you, you must complete the Form of Instruction enclosed herewith in accordance with the instructions contained therein and lodge it, together with payment for the amount due in respect thereof, with the Transfer Secretaries, whose details are set out on the inside front cover of this Circular, by not later than 12:00 on Friday, 28 September If you do not wish to subscribe for all or some of the Claw-back Offer Shares allocated to you, you may sell or renounce your Entitlements or allow them to lapse. In such event, you must complete the relevant section of the Form of Instruction and return it to the Transfer Secretaries to be received not later than 12:00 on Thursday, 20 September 2012, if you wish to sell, and by no later than 12:00 on Friday, 28 September 2012, if you renounce your Entitlements. If you intend to allow your Entitlements to lapse, you need not take any action. 3. IF YOU HAVE DISPOSED OF YOUR SHARES If you have disposed of your RARE Shares, please forward this Circular to the purchaser of such Shares or to the broker or agent through whom the disposal was effected. Note: If you are in any doubt as to the action you should take, please consult your CSDP, broker, banker, legal advisor, accountant or other professional advisor immediately. RARE does not accept responsibility and will not be held liable for any failure on the part of the CSDP or broker of a Dematerialised Shareholder to notify such Shareholder of the Claw-back Offer. 4

7 DEFINITIONS In this Circular and the annexures hereto, unless otherwise stated or the context otherwise clearly indicates, the words in the first column shall have the meaning stated opposite them in the second column. 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 AltX BEE B-BBEE Certificated Shareholders Certificated Shares the/this Circular Claw-back Offer Claw-back Shares Common Monetary Area CSDP Dematerialisation Dematerialised Shareholders Dematerialised Shares the Directors or the Board Doculate the Companies Act, No. 71 of 2008, as amended and its Regulations; the Alternative Exchange of the JSE; Black Economic Empowerment; Broad Based Black Economic Empowerment; holders of Certificated Shares; Shares which are not dematerialised, title to which is represented by physical Documents of Title; this Circular, dated 10 September 2012, including the Form of Instruction and the annexures; a renounceable Claw-back Offer to RARE Shareholders of Claw-back Shares at a Subscription Price of 8 cents per Claw-back Share in the ratio of Claw-back Shares for every 100 ordinary Shares held at the close of trade on the Record Date; new ordinary shares which are the subject of the Claw-back Offer; South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland; Central Securities Depository Participant as defined in Section 1 of the SSA appointed by an individual Shareholder for the purposes of, and in regard to the Dematerialisation of Documents of Title for the purposes of incorporation into Strate; process by which Certificated Shares and/or Documents of Title are converted to an electronic form and recorded in the sub-register of Shareholders maintained by a CSDP; holders of Dematerialised Shares; Shares which have been incorporated into Strate and which are no longer evidenced by physical Documents of Title, but the evidence of ownership of which is determined electronically and recorded in the sub-register maintained by a CSDP; board of directors of RARE, whose names are set out in the Corporate Information section of this Circular; Doculate Investments Proprietary Limited, a private company incorporated in accordance with the laws of South Africa with registration number 2011/144977/07 and of which Siyolo is the only director and 100% Shareholder with the following information: Authorised share capital: non par value shares; Issued share capital: 1 non par value share; and Bankers: to be assigned; Documents of Title emigrants Entitlement or Claw-back Entitlement(s) Exchange Control Regulations Form of Instruction Independent reporting accountants and/or auditors JSE Share certificates and/or Certified transfer deeds and/or balance receipts or any other documents of title in respect of RARE Shares in Certificated form; former residents of the Common Monetary Area; a Shareholder s Entitlement to subscribe for Claw-back Shares in the ratio of Claw-back Shares for every 100 ordinary Shares held on the Record Date, which Entitlement arises as a result of the Claw-back Offer; the Exchange Control Regulations of South Africa; Form of Instruction (attached to this Circular in the case of Certificated Shareholders) in respect of the Letters of Allocation reflecting the Entitlement of Certificated Shareholders and on which Certificated Shareholders are required to indicate whether they wish to take up, sell or renounce their Claw-back Entitlement; Greenwoods Chartered Accountants (Practice number E); JSE Limited (Registration number 2005/022939/06), a public company duly incorporated and registered with limited liability under the Company laws of South Africa and licensed as an exchange under the SSA; 5

8 Last Practicable Date Letter/s of Allocation or LAs Listings Requirements Mayfair own name registration PSG Capital RARE or the Company or the Group RARE Shareholder or Shareholders RARE shares or ordinary Shares or Shares Record Date Register SENS Share Capital Siyolo South Africa SSA Strate the last practicable date prior to the finalisation of this Circular, being Thursday, 16 August 2012; renounceable (nil paid) letters of allocation to be issued to RARE Shareholders pursuant to the Claw-back Offer, conferring a Claw-back Entitlement on the holder to subscribe for Claw-back Shares in terms of the Claw-back Offer; the JSE Limited Listings Requirements; Mayfair Speculators Proprietary Limited (Registration number 1993/070119/07), a private company incorporated in accordance with the laws of South Africa and being a financier of Rare; Dematerialised Shareholders who have registered their shares in their own name with a CSDP or broker in terms of the SSA; PSG Capital Proprietary Limited (Registration number 2006/015817/07), a private company incorporated in accordance with the laws of South Africa, the designated advisor to RARE; RARE Holdings Limited (Registration number 2002/025247/06), a public company incorporated in accordance with the laws of South Africa, listed on the AltX; holders of RARE shares recorded as such in the Register; ordinary shares of no par value, in the Share Capital of RARE; last date for RARE Shareholders to be recorded in the Register in order to participate in the Claw-back Offer, being the close of trade on Friday, 7 September 2012; RARE s share register, including sub-registers; Securities Exchange News Service of the JSE; authorised ordinary Shares of no par value of which Shares are issued; Thembinkosi Siyolo a natural person and a South African citizen with identification number ; the Republic of South Africa; Securities Services Act, 2004 (Act 36 of 2004), as amended; the settlement and clearing system used by the JSE, managed by Strate Limited (Registration number 1998/022242/06), a public company duly registered and incorporated with limited liability in accordance with the laws of South Africa and the CSDP registered in terms of the SSA; the Subscriber Siyolo or Doculate acting as Siyolo s nominee; Subscription Agreement Subscription Amount Subscription Price Supplementary Circular the TRP the Subscription Agreement dated 30 May 2012 and the addendum thereto dated 21 June 2012 entered into between RARE and the Subscriber in terms of which the Subscriber has subscribed for new ordinary Shares of no par value in the Share Capital of RARE at a Subscription Price of 8 cents per Claw-back Share for the total amount of R (one hundred million Rand to be issued on or about 3 September 2012); aggregate amount of R (one hundred million Rand) payable by the Subscriber for the Claw-back Shares; subscription price of 8 cents per Claw-back Share; the Circular sent to Shareholders on 13 July 2012 with the updated terms of the Claw-back Offer and which included the notice of the general meeting following the Waiver Circular; the Takeover Regulations Panel, established in terms of section 196 of the Companies Act; Transfer Secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07), a private company duly registered and incorporated in accordance with the laws of South Africa, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107); Waiver Circular Waiver of the Mandatory Offer VWAP ZAR or Rand the Circular sent to Shareholders, on 1 June 2012 which included the initial terms of the Claw-back Offer; the waiver of the Mandatory Offer in terms of section 123 of the Act, of which details were set out in the Waiver Circular and the Supplementary Circular; volume weighted average price; and South African Rand. 6

9 RARE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) Registration Number: 2002/025247/06 Share Code: RAR ISIN: ZAE ( RARE or the Company or the Group ) Directors T. Siyolo* (Chairman) W. van Coller (Chief Executive Officer) R. Viljoen (Financial Director) M.T. Lategan*~ P. du Plessis*~* H. Odendaal*~ S.J.D.T. Potgieter* *Non-Executive ~Independent *~*Lead Independent Non-Executive CIRCULAR TO ShareholderS 1. INTRODUCTION 1.1 Rare is a company that supplies a comprehensive range of services and products to the fluid conveyance industry. Services include the design, manufacture, installation and maintenance of pipelines and process plants across all sectors of the industry (particularly oil and gas, mining and local government). The Group s business operations are carried out in South Africa, Angola and Zambia and it conducts project work in sub-sahara Africa. 1.2 In an announcement released on SENS on 31 May 2012 Shareholders were advised that the Company and the Subscriber entered into the Subscription Agreement, the terms of which have subsequently been amended as announced on 22 June 2012, and which provides for the subscription by the Subscriber of new ordinary Shares of no par value in the Share Capital of RARE at a Subscription Price of 8 cents per Share for the total Subscription Amount. 1.3 The Subscription Price represents a discount of approximately 31% to the 30 day volume weighted average Share price of RARE as at 25 May In terms of the Subscription Agreement, RARE will, upon the conclusion of the Claw-back Offer, pay the Subscriber an amount of R (one million Rand) as consideration for agreeing to Subscribe for 100% of the Claw-back Offer which amount will be payable on fulfilment of the last of the conditions precedent ( the Subscription fee ) expecting to be on or about 3 September The Directors have made due and careful enquiry to confirm that the Subscriber can meet its commitments as set out in the Subscription Agreement. 1.6 The attached Form of Instruction in respect of the Letters of Allocation contains details of the Claw-back Entitlement to which Certificated Shareholders are entitled, as well as the procedures for acceptance, sale or renunciation of that Claw-back Entitlement. 1.7 Dematerialised Shareholders will be advised by their CSDP or broker of the Claw-back Entitlement to which they are entitled as well as the procedure for acceptance, sale or renunciation of those Claw-back Entitlement. 7

10 1.8 The JSE has approved the listings of the: Claw-back Shares from the commencement of trade on Monday, 3 September 2012; and Letters of Allocation from the commencement of trade on Monday, 3 September 2012, until the close of trade on Thursday, 20 September 2012, both days inclusive. 1.9 Upon allotment and issue, the Claw-back Shares will rank pari passu in all respects with the ordinary Shares currently in issue. 2. PURPOSE AND RATIONALE OF THE Claw-back Offer 2.1 The rationale of the Claw-back Offer being to: recapitalise the business following the introduction of a new management team during April 2012 and in the wake of a poor performance during the preceding 6 month period as a result of substantial provisions against old stock and debtors; and introduce a long term strategic BEE partner and secure a unique position within the industry as a majority black owned listed Company. 2.2 This adds to the prospects of the Company to sufficiently capitalise the Company and restore profitability within the foreseeable future. 2.3 As a result of the aforementioned factors, the Board of Directors have therefore resolved to raise equity capital through the Claw-back Offer. 2.4 In consideration for the issue of the Claw-back Shares, the Subscriber will cede and assign, alternatively procure from Mayfair the cession and assignment of loans to the value of R (one hundred million Rand), which comprises: R (sixty million Rand) being a portion of the claims Mayfair holds against Rare Group Proprietary Limited; and R (forty million Rand) being a portion of the claims Mayfair holds against Rare Capital Proprietary Limited. 2.5 Such cession and assignment will occur on the second business day after the fulfilment of the last of the conditions precedent as per the Subscription Agreement. 2.6 Pursuant to the Supplementary Circular which included the notice of a general meeting, the following resolutions were duly passed at the general meeting on 17 August 2012: the Waiver of the Mandatory Offer; the placing of the authorised but unissued ordinary Share capital of the Company under the control of the Directors and authority to issue same, including the authority in terms of section 41(3) of the Act and the granting of the authority; and the granting of the authority to the Directors to do all things necessary to implement the Claw-back Offer. 2.7 The passing of the aforementioned resolutions were required to enable the Company to enter into the Subscription Agreement and to pursue the Claw-back Offer. 2.8 In addition to the above, the TRP has advised that it has granted the Waiver of the Mandatory Offer. 3. TERMS OF THE Claw-back Offer 3.1 Particulars of the Claw-back Offer RARE Shareholders and/or their renouncees are hereby offered for subscription, by way of a renounceable Claw-back Offer, a total of Claw-back Shares at a Subscription Price of 8 cents per Claw-back Share in the ratio of Claw-back Shares for every 100 ordinary Shares held in RARE at the close of trade on the Record Date, upon the terms and conditions set out in this Circular The Subscription Price is payable in ZAR and in full upon acceptance by Certificated Shareholders, or on a delivery versus payment basis by the CSDP or broker of Dematerialised Shareholders who have accepted the Claw-back Offer Holders of Dematerialised Shares who wish to accept the Claw-back Offer should ensure that the necessary funds are deposited with the relevant CSDP or broker The Subscription price represents a discount of approximately 31% to the 30 day volume weighted average Share price of RARE as at 25 May RARE Shareholders (recorded in the Register at the close of trade on the Record Date) or their renouncees in terms of the Claw-back Offer will be entitled to participate in the Claw-back Offer. The Letters of Allocation may only be traded in Dematerialised form and, accordingly, RARE has issued all Letters of Allocation in Dematerialised form. 8

11 3.2 Opening and closing dates of the Claw-back Offer The Claw-back Offer will open at the commencement of trade on Monday, 10 September 2012 and will close at 12:00 on Friday, 28 September Excess applications The Claw-back Offer does not include the right for Shareholders to apply for excess Claw-back Offer Shares. 4. DIRECTORS AND EXECUTIVE MANAGEMENT Details of the Directors and executive management, including the appointment, remuneration, borrowing powers of directors, and director s interests and declarations are set out in Annexure 5 to this Circular. 5. MAJOR AND CONTROLLING ShareholderS Set out below are the names of those Shareholders that, directly or indirectly, are beneficially interested in 5% or more of the total shares in the Company in issue at the Last Practicable Date: 5.1 Before the Claw-back Offer Name of ordinary Shareholder # Shares held Shareholding (%) Stafric Investment and Management Services Proprietary Limited % T. Siyolo % The Lategan Family Trust % Total 74.96% 5.2 After the Claw-back Offer* Name of ordinary Shareholder # Shares held Shareholding (%) Stafric Investment and Management Services Proprietary Limited % T. Siyolo % The Lategan Family Trust % Total 92.45% * Based on the assumption that none of the Shareholders will follow their Entitlements in terms of the Claw-back Offer. 5.3 Insofar as the Directors of RARE are aware, no other Shareholder will hold, directly or indirectly, 5% or more of the issued Share Capital of RARE following the Claw-back Offer. 6. JSE LISTINGS The JSE has granted listings for the Letters of Allocation and the Claw-back Shares as follows: new RARE Shares will be issued and listed with effect from the commencement of business on Monday, 3 September 2012; and 6.2 Letters of Allocation in respect of new RARE Shares will be listed from the commencement of business on Monday, 3 September 2012, to close of business on Thursday, 20 September 2012, both days inclusive. 6.3 As the Claw-back Offer is fully subscribed, no minimum subscription is required. 7. FINANCIAL INFORMATION 7.1 The pro forma statement of comprehensive income and statement of financial position for RARE are based on the unaudited results for the 6 months ended 31 December 2011, the preparation of which are the responsibility of the Directors and is set out in Annexure 1 to this Circular. 7.2 The pro forma financial information should be read in conjunction with the Independent reporting accountant s report thereon as set out in Annexure 2 to this Circular. 7.3 The unaudited pro forma financial information has been prepared for illustrative purposes only to provide information as to how the RARE Claw-back Offer might have impacted on the financial position and results of RARE assuming that the Claw-back Offer had been implemented on 31 December 2011 for purposes of the statement of financial position and on 1 July 2011 for purposes of the statement of comprehensive income. The unaudited pro forma financial information has been presented for illustrative purposes only and, because of its nature, may not give a fair reflection of RARE s financial position and results after the Claw-back Offer. 9

12 Before Unaudited 6 months ended 31 Dec 2011 R After Unaudited 6 months ended 31 Dec 2011 R % Change Loss per ordinary Share (cents) % Diluted loss per ordinary Share (cents) % Headline loss per Share from continuing operations (cents) % Headline loss per Share from discontinued operations (cents) % Net asset value per Share (cents) % Net tangible asset value per Share (cents) % Number of ordinary Shares in issue ( 000) % Weighted average number of ordinary Shares in issue ( 000) % Detailed assumptions in respect of the above financial effects are included in Annexure 1 to this Circular. 8. SHARE CAPITAL OF THE COMPANY The authorised stated capital and issued stated capital of RARE, before and after the Claw-back Offer, will be as follows: Authorised stated capital ordinary Shares of no par value preference Shares of no par value Issued stated capital before the Claw-back Offer ordinary Shares of no par value Treasury Shares** (1 160) Total issued stated capital before Claw-back Offer Issued for the Claw-back Offer at 8 cents each Shares of no par value* Total issued stated capital after the Claw-back Offer * The JSE has granted the listing of the Claw-back Shares, subsequent to the Claw-back Offer. ** Rare has Shares held in treasury. 9. CLAW-BACK Entitlement 9.1 RARE Shareholders will receive the right to subscribe for new RARE Shares for every 100 shares held on the initial Record Date being Friday, 7 September RARE Shareholders are entitled to participate in the Claw-back Offer in accordance with Annexure 3 to this Circular. 9.3 The allocation of Claw-back Shares will be such that Shareholders will not be allocated a fraction of a Claw-back Share and as such, any Entitlement to receive a fraction of a Claw-back Shares which: is less than one-half of a Claw-back Share, will be rounded down to the nearest whole number; and is equal to or greater than one-half of a Claw-back Share but less than a whole Claw-back Share will be rounded up to the nearest whole number. 9.4 Certificated Shareholders will have their Entitlements credited to a nominee account in electronic form, which will be administered by the Transfer Secretaries on their behalf. The enclosed Form of Instruction reflects the number of Shares for which the Certificated Shareholder is entitled to subscribe. The procedure to be followed by Certificated Shareholders for the acceptance, sale or renunciation of their Entitlements is reflected on the Form of Instruction. 9.5 Dematerialised Shareholders will have their Entitlements to subscribe for Claw-back Shares credited in electronic form to their account held by their appointed CSDP or broker. The CSDP or broker will advise Dematerialised Shareholders of the procedure to be followed and the timing for the acceptance, sale, renunciation or lapsing of such Entitlements. 9.6 The Letters of Allocation to which the forms of instruction relate are negotiable and can be sold on the JSE. 10

13 10. PROCEDURE FOR ACCEPTANCE, RENUNCIATION AND SALE OF CLAW-BACK Entitlement 10.1 Certificated Shareholders The Claw-back Entitlement of Certificated Shareholders will be credited to an account in electronic form, which will be administered by the Transfer Secretaries on their behalf. The enclosed Form of Instruction reflects the number of Claw-back Shares for which the Certificated Shareholder is entitled to subscribe. Any instruction by Certificated Shareholders to accept, sell or renounce all or part of the Claw-back Shares allocated to them may only be made by means of the Form of Instruction Acceptance Full details of the procedure for acceptance of the Claw-back Offer by Certificated Shareholders are contained in the Form of Instruction enclosed with this Circular. It should be noted that: acceptances are irrevocable and may not be withdrawn; acceptances may be made only by means of the Form of Instruction; any instruction to sell or renounce all or part of the Claw-back Shares may only be made by means of the Form of Instruction; the properly completed Form of Instruction and a banker s draft or cheque in ZAR crossed not transferable and or bearer deleted in payment of the Subscription Price payable for the relevant Claw-back Shares must be received by the Transfer Secretaries at either of the addresses referred to in paragraph by not later than 12:00 on Friday, 28 September No late postal acceptances will be accepted; the Form of Instruction to take up the Claw-back Entitlement in question will be regarded as complete only when the cheque or banker s draft has been cleared for payment; such payment will constitute an irrevocable acceptance of the Claw-back Offer upon the terms and conditions set out in this Circular and in the Form of Instruction once the banker s draft or cheque has been cleared for payment; if any Form of Instruction is not received as set out above, the Claw-back Offer will be deemed to have been declined and the Claw-back Entitlement to subscribe for the Claw-back Shares in terms of the Form of Instruction will lapse regardless of who holds it; and no acknowledgement of receipt will be given for a cheque or banker s draft received in respect of the Claw-back Offer Renunciation or sale of Claw-back Entitlement RARE has issued the LA s in Dematerialised form and the electronic record for Certificated Shareholders is being maintained by the Transfer Secretaries The LAs to which the Form of Instruction relates are negotiable and can be traded on the JSE Certificated Shareholders who do not wish to subscribe for all, or some of the Claw-back Shares allocated to them as reflected in the Form of Instruction, may sell or renounce or lapse their Claw-back Entitlement In addition, Certificated Shareholders who wish to sell the Claw-back Entitlement allocated to them as reflected in the Form of Instruction must complete the relevant section of the Form of Instruction and return it to the Transfer Secretaries in accordance with the instructions contained therein, to be received by not later than 12:00 on Thursday, 20 September The Transfer Secretaries will endeavour to procure the sale of the Claw-back Entitlement on the JSE on behalf of such Certificated Shareholders and will remit the proceeds in accordance with the payment instructions reflected in the Form of Instruction, net of brokerage charges and associated expenses. Neither the Transfer Secretaries nor the Company nor any broker appointed by either of them will have any obligation or be responsible for any loss or damage whatsoever in relation to or arising out of the timing of such sales, the price obtained or any failure to sell such Claw-back Entitlement. References in this paragraph to a Certificated Shareholder include references to the person or persons executing the Form of Instruction and any person or persons on whose behalf such person or persons executing the Form of Instruction is/are acting and in the event of more than one person executing the Form of Instruction, the provisions of this paragraph shall apply to them, jointly and severally Certificated Shareholders who do not wish to sell the Claw-back Entitlement allocated to them as reflected in the Form of Instruction, and who do not wish to subscribe for the Claw-back Shares offered in terms of the Form of Instruction but who wish to renounce their Claw-back Entitlement, should complete the relevant section of the Form of Instruction and return it to the transfer secretaries in accordance with the instructions contained therein, to be received by no later than 12:00 on Friday, 28 September Certificated Shareholders who wish to subscribe for only a portion of the Claw-back Entitlement allocated to them must indicate on the Form of Instruction the number of Claw-back Shares for which they wish to subscribe Certificated Shareholders wishing to sell their Claw-back Entitlement will be liable to pay the Transfer Secretaries an amount of R (one hundred and thirty one Rand and 10 cents) (all inclusive) for trades having a value of less than or equal to R and an amount equal to R (one hundred and thirty one Rand and 10 cents) plus 0.25% of the value of the trade for trades with a value of R (forty thousand Rand) or more. 11

14 Payment Currency The amount due on acceptance of the Claw-back Offer is payable in ZAR Payment terms A banker s draft drawn on a registered bank or a cheque drawn on a South African bank (either 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 RARE Holdings Limited Claw-back Offer in respect of the amount due, together with a properly completed Form of Instruction, must be lodged by Certificated Shareholders and/or their renouncees by no later than 12:00 on Friday, 28 September 2012, in accordance with the instructions contained in the Form of Instruction and clearly marked RARE Holdings Limited Claw-back Offer. By hand to: Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street Johannesburg 2001 or sent by post, at the risk of the Shareholder or renouncee concerned, to: Computershare Investor Services Proprietary Limited PO Box Marshalltown 2107 All cheques or banker s drafts received by the Transfer Secretaries will be deposited immediately for payment. In the event that any cheque or banker s draft is dishonoured, RARE, in its sole discretion, may treat the relevant acceptance as void or may tender delivery of the relevant Claw-back Shares to which it relates against payment in cash of the Subscription Price for such Claw-back Shares Share certificates Where applicable, Share certificates in respect of Claw-back Shares will be posted, by registered post, by the Transfer Secretaries, at the risk of the Certificated Shareholders concerned, on or about Monday, 1 October As RARE uses the certified transfer deeds and other temporary Documents of Title procedure approved by the JSE, only block certificates will be issued in respect of Claw-back Shares. Certificated Shareholders receiving Claw-back Shares in Certificated format must note that such shares cannot trade on the JSE until they have been Dematerialised. This could take between one and ten days Dematerialised Shareholders Acceptance, renunciation or sale of Claw-back Entitlement The CSDPs or brokers appointed by Dematerialised Shareholders should contact them to ascertain: whether the Shareholder concerned wishes to follow his Claw-back Entitlement in terms of the Claw-back Offer (in which case CSDPs effect payment on a delivery versus payment basis) and if so, in respect of how many Claw-back Shares; whether the Shareholder concerned wishes to renounce his Claw-back Entitlement and if so, in respect of how many Claw-back Shares; whether the Shareholder concerned wishes to sell those Claw-back Entitlement which he/she does not wish to follow or renounce and if so, how many Claw-back Entitlement are to be sold. Shareholders not contacted by their CSDPs or brokers should contact them and furnish them with their instruction. Should a CSDP or broker not obtain instructions from a Dematerialised Shareholder, they are obliged to act in terms of the mandate entered into between them and the Dematerialised Shareholder, or if the mandate is silent in this regard, not to accept the Claw-back Entitlement on behalf of such Shareholder Payment The CSDP or broker will effect payment directly on behalf of Dematerialised Shareholders in respect of Claw-back Entitlement followed, in ZAR, on Monday, 1 October 2012, on a delivery versus payment basis. Holders of Dematerialised Shares who wish to accept the Claw-back Offer should ensure that the necessary funds are deposited with the relevant CSDP or broker Claw-back Shares Dematerialised Shareholders accounts will be credited with the Claw-back Shares subscribed for in terms of the Claw-back Offer, on Monday, 1 October

15 11. EXCHANGE CONTROL REGULATIONS The following summary is intended only as a guide and is therefore not a comprehensive statement of the Exchange Control Regulations. RARE Shareholders who are in any doubt as to the appropriate course of action to take should consult their professional advisors. The new RARE shares to be issued pursuant to the Claw-back Offer are not freely transferable from South Africa and must be dealt with in terms of the Exchange Control Regulations. RARE Shareholders who are not resident in the Common Monetary Area should obtain advice as to whether any governmental and/or other legal consent is required and/or whether any other formality must be observed to follow their rights in terms of the Claw-back Offer Non-resident of the Common Monetary Area In terms of the Exchange Control Regulations, non-residents of the Common Monetary Area will be allowed to: take up rights allocated to them in terms of the Claw-back Offer; purchase Letters of Allocation; and subscribe for the new RARE shares in terms of the Claw-back Offer, provided payment is received in foreign currency through normal banking channels or in ZAR from a non-resident account Share certificates issued pursuant to the application must be endorsed non-resident. In respect of RARE Shareholders taking up their rights in terms of the Claw-back Offer: a non-resident endorsement will be applied to Forms of Instruction issued to non-resident Certificated Shareholders; or a non-resident annotation will appear in the CSDP or broker s register for non-resident Dematerialised Shareholders All applications by non-residents for the above purposes must be made through a South African authorised dealer. Where rights are sold on the JSE on behalf of non-residents, the proceeds of such sale are freely remittable through a South African authorised dealer in foreign exchange Former residents of the Common Monetary Area ( emigrants ) Where a Entitlement in terms of the Claw-back Offer falls due to an emigrant, which right is based on shares blocked in terms of Exchange Control Regulations, only then may blocked funds be used to: take up rights allocated to such emigrant in terms of the Claw-back Offer; purchase Entitlement on the JSE; and subscribe for new RARE shares in terms of the Claw-back Offer Applications by emigrants using blocked ZAR for the above purposes must be made through the South African authorised dealer controlling their blocked assets. RARE Share certificates issued pursuant to blocked ZAR transactions must be endorsed non-resident and placed under the control of the authorised dealer through whom the payment was made In respect of RARE Shareholders taking up their Entitlement in terms of the Claw-back Offer: a non-resident endorsement will be applied to forms of instruction issued to non-resident Certificated Shareholders; or a non-resident annotation will appear in the CSDP or broker s register for non-resident Dematerialised Shareholders Where Entitlement are sold on the JSE on behalf of emigrants, which Entitlement are based on an investment which is blocked in terms of the South African Exchange Control Regulations, the proceeds of such sales will be credited to the blocked ZAR accounts of the RARE Shareholders concerned Non-resident and emigrant Dematerialised Shareholders will have all aspects relating to exchange control managed by their CSDP or broker. 13