TRUSTCO GROUP HOLDINGS LIMITED - Disposal by Trustco of 20% of Legal Shield Holdings (Proprietary) Limited and withdrawal of cautionary

Disposal by Trustco of 20%  of Legal Shield Holdings (Proprietary) Limited and withdrawal of cautionary

TRUSTCO GROUP HOLDINGS LIMITED
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX Share Code: TUC
JSE Share Code: TTO
ISIN Number: NA000A0RF067
(“Trustco”, or “the Company”)

ANNOUNCEMENT REGARDING THE DISPOSAL BY TRUSTCO OF 20% (TWENTY PERCENT) OF LEGAL
SHIELD HOLDINGS (PROPRIETARY) LIMITED (“LEGAL SHIELD HOLDINGS”) AND WITHDRAWAL OF
CAUTIONARY

1.    INTRODUCTION

      Trustco shareholders (“Trustco Shareholders”) are advised that Trustco and Riskowitz Value
      Fund LP (“Purchaser”) have entered into a sale of shares agreement (“Agreement”) in terms
      of which Trustco will dispose of 20% (twenty percent) of the issued share capital of Legal
      Shield Holdings, a wholly-owned subsidiary of Trustco for R1.2 billion (“Consideration”)
      (“Transaction”).

2.    NATURE OF THE BUSINESS OF LEGAL SHIELD HOLDINGS

      Legal Shield Holdings is a wholly owned subsidiary of Trustco and acts as the holding company
      for the Namibian insurance segment and a portion of the Investment segment of Trustco’s
      operations.

      Legal Shield Holdings, owns Trustco Life Limited and Trustco Insurance Limited which house
      the Namibian long term and short term insurance licenses respectively. The Investment
      segment comprises inter alia, Trustco’s property, air services and the strategic media services
      segments. It specifically excludes the Banking and Finance, Educational business and
      Resources segments.

3.    RATIONALE

      The sale of a 20% (twenty percent) shareholding in Legal Shield Holdings would not change
      the control of Legal Shield Holdings or Trustco.

      In line with Trustco’s strategy, this Transaction will provide future investors the opportunity to
      invest directly into asset classes that are geared to their specific portfolio’s. This Transaction
      would significantly increase the available liquidity in Namibia. The Consideration would be
      deployed across the Trustco group to accelerate growth in the other group segments.
4.    CONSIDERATION

      The Consideration for the Transaction will amount to R1.2 billion and will be paid as follows:

      -      On the signature date of the Agreement, Trustco will apply an amount received from
             the Purchaser of R600 million as a deposit towards the Consideration (“Deposit”); and

      -      The balance of the Consideration will be paid by the Purchaser to Trustco within 12
             (twelve) months after the successful conclusion of the due diligence which will be
             completed by no later than 31 January 2018.

      The Consideration will be held as cash reserves and utilised in the normal course of business.

5.    CONDITIONS

5.1   The Transaction is subject to the following suspensive conditions (“Suspensive Conditions”):

          5.1.1 obtaining all regulatory approvals (including but not limited to all necessary
                approvals required in terms of the JSE Limited Listings Requirements for a
                transaction of this nature) which are necessary for the implementation of this
                Agreement on or before 31 March 2018;

          5.1.2 the Seller obtaining all necessary approvals from its board; and

          5.1.3 Trustco and the Purchaser entering into a comprehensive shareholders agreement
                on or before 31 March 2018.

5.2   The Transaction is further subject to the following resolutive conditions (“Resolutive
      Conditions”):

          5.2.1 The Purchaser will conduct a due diligence between 8th of January 2018 until 31
                January 2018. The Purchaser will provide the Seller with a notice not later than on 31
                January 2018, confirming the outcome of the due diligence. Should the Purchaser
                conclude that the due diligence is not to its satisfaction, the Purchaser may elect to
                acquire 10% of Legal Shield Holdings in lieu of the Deposit or demand from Trustco
                to repay the Deposit on or before 31 October 2018; and

          5.2.2 If so required, Trustco and the Purchaser shall execute new agreements as may be
                necessary to record the provisions of 5.2.1.

5.3   The effective date of the Transaction will be the day on which the last of the Suspensive
      Conditions have been fulfilled (“Effective Date”).
6.    NET ASSETS AND PROFITS ATTRIBUTABLE TO LEGAL SHIELD HOLDINGS

      The value of the net assets and profits attributable to Legal Shield Holdings (“Net Assets”) as
      at 31 March 2017, being Legal Shield Holdings’s most recent year end was NAD2 160 431 000
      and NAD 621 597 000 respectively.

      This financial information has been extracted from the annual financial statements for the
      year ended 31 March 2017.

      It is further agreed by Trustco and the Purchaser that Legal Shield Holdings will have the right
      to declare a dividend of up to R1.1 billion, prior to the Effective Date.

7.    CATEGORISATION AND FAIRNESS OPINION

      Based on the Consideration for the Transaction, and the fact that the Purchaser is a related
      party to the Company, the Transaction is a Category 2, related party, transaction requiring the
      approval of Shareholders.

      Accordingly, Paragraph 10.7(b) of the LR’s requires that the Company obtain a fairness
      opinion from an independent professional expert acceptable to the JSE, confirming that the
      terms of the Transaction are fair as far as Shareholders are concerned. The Company has
      therefore appointed Paul Austin, trading as Effortless Corporate Finance, as the independent
      professional expert to advise the Company in this regard. Shareholders will be advised of the
      outcome of this process once same has been concluded.

      A circular providing further information and a notice of general meeting is expected to be
      posted to Shareholders in due course and a general meeting of Shareholders will be held to
      approve the resolutions proposed.

8.    WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

      Shareholders are referred to the announcement published on 26 October 2016 wherein they
      advised to exercise caution when dealing in the Company’s securities Shareholders are
      hereby advised that further to the information set out in this announcement regarding the
      Transaction, caution is no longer required to be exercised by Shareholders when dealing in
      their Trustco securities.

Windhoek, Namibia
24 November 2017

Amanda Bruyns
Company Secretary: Trustco Group Holdings Limited

JSE Sponsor
Sasfin Capital Proprietary Limited (a member of the Sasfin group)
NSX Sponsor
Simonis Storm Securities Proprietary Limited

Independent Expert
Effortless Corporate Finance,

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