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Update on the merger of the Southern Cape forestry and sawmilling businesses of PG Bison Southern Cape (Pty) Ltd and Mto Forestry (Pty) Ltd
KAP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1978/000181/06)
Share code: KAP
ISIN: ZAE000171963
Company Alpha Code: KAP
LEI code: 3789001F51BC0045FD42
(“KAP” or “the Company”)
UPDATE ON THE MERGER OF THE SOUTHERN CAPE FORESTRY AND SAWMILLING BUSINESSES OF
PG BISON SOUTHERN CAPE (PTY) LTD AND MTO FORESTRY (PTY) LTD
Capitalised terms used in this announcement shall have the same meanings as set out in KAP’s category 2
disposal announcement (“Category 2 Announcement”) published on SENS on 29 October 2025, unless otherwise
defined herein.
On 29 October 2025, KAP announced the conclusion of a suite of inter-related agreements, the implementation of
which would have resulted in PG Bison (Pty) Ltd (“PGB”) (a wholly owned subsidiary of the Company) merging its
non-core forestry, sawmilling and pole operations in the Southern Cape, conducted by its wholly owned subsidiary
PG Bison Southern Cape (Pty) Ltd (“PGBSC”), with the MTO Cape Business, being the Southern and Eastern
Cape forestry and sawmilling operations of MTO Forestry (Pty) Ltd (“MTO Forestry”).
As part of the Transaction, it was intended that South African Forestry Company SOC Ltd (“Safcol”), a state-
owned company which holds its MTO Forestry shares on behalf of communities, would transfer such shares to
MTO Community SPV (RF) (Pty) Ltd (“MTO Community SPV”), a ring-fenced company incorporated to hold
shares in Cape Forest Products (Pty) Ltd (“CFP”), and the shares in MTO Community SPV would be held by a
community trust to be registered by Safcol. In addition, the Transaction was subject to certain Conditions
Precedent, including the implementation of the Excluded Asset Sale, in terms of which MTO Forestry would, as
part of the Transaction, dispose of certain excluded business assets and operations (“Excluded Assets”), so as
to only retain the MTO Cape Business.
Safcol has not transferred its shares in MTO Forestry to MTO Community SPV, and MTO Forestry has not been
able to complete the Excluded Asset Sale, however, the parties wish to proceed with the Transaction and have
accordingly agreed to amend the Transaction steps. In terms of the amended Transaction steps (i) MTO Forestry
will instead warehouse the Excluded Assets in an indirect subsidiary of MTO Forestry prior to the implementation
of the PGBSC Disposal, and Safcol will retain a minority shareholding of 11.32% in MTO Forestry, pending the
establishment of the community trust and (ii) the PGBSC Equity will be sold to Cape Pine Investment Holdings
(Pty) Ltd (“CPIH”).
Following the implementation of the revised Transaction in terms of an amended set of Transaction Agreements
(including the PGBSC Disposal to CPIH) PGBSC will be a wholly owned subsidiary of CPIH and MTO Forestry
will be 88.68% owned by CPIH. CPIH in turn will be a wholly owned subsidiary of CFP. The issued share capital
of CFP will be held as follows:
1. PGB as to 49%; and
2. Wild Peach Investment Holdings (Pty) Ltd as to 51%.
The amended Transaction will be subject to the fulfilment or waiver (where applicable) of, inter alia, the following
conditions precedent:
• the remaining amended Transaction Agreements becoming unconditional;
• CFP securing the funding it requires to implement the revised Transaction and such funding becoming
unconditional in accordance with its terms; and
• between the signature date of the amended Transaction Agreements and the day preceding the Effective
Date, no fire has occurred which results in any sawmill and/or pole plant owned by PGBSC being damaged or
destroyed or 20% or more of all the timber situated on property owned or leased by PGBSC being damaged
or destroyed.
The initial Transaction was approved by the Competition authorities, in accordance with the provisions of the
Competition Act, on 4 May 2026, and the relevant parties subsequently notified the Competition authorities of the
changes to the transaction structure as recorded in the amended Transaction Agreements.
Following the execution of the amended Transaction Agreements on 19 August 2026, the Effective Date of the
revised Transaction is anticipated to be 1 October 2026.
Stellenbosch
19 August 2026
Equity and Debt Sponsor
PSG Capital
Date: 19/08/2026 13:00:00
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