BRIMSTONE INVESTMENT CORPORATION LIMITED - Announcement regarding the subscription of Sea Harvest shares

Announcement regarding the subscription of Sea Harvest shares

Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
(“Brimstone” or the “Company”)

ANNOUNCEMENT REGARDING THE SUBSCRIPTION OF SEA HARVEST SHARES

1.   Introduction and details

     Brimstone shareholders are referred to the announcement released on SENS on 28 August 2018 (the
     “Announcement”) regarding the acquisition by Sea Harvest Group Limited (“Sea Harvest”), a subsidiary
     of Brimstone, of Ladismith Cheese Company Proprietary Limited (the “Acquisition”). The Announcement
     referred to Sea Harvest’s intention to part-fund the Acquisition by way of a vendor consideration placing
     of up to R300 million worth of Sea Harvest shares with Brimstone.

     In this regard, Brimstone shareholders are advised that Brimstone has entered into a subscription
     agreement with Sea Harvest in terms of which Brimstone will be subscribing for 21 428 571 Sea Harvest
     ordinary shares (“Shares”) at a price of R14.00 per Share, for a total consideration of R300 million (the
     “Subscription”). The Subscription represents approximately 7.9% of the total Sea Harvest Shares
     currently in issue and will increase Brimstone’s shareholding in Sea Harvest from 50.6% to 54.2%.

     The effective date of the Subscription will be 7 January 2019 (the “Effective Date”).

2.   Overview of Sea Harvest

     Sea Harvest is a leading, internationally recognised B-BBEE fishing and food business with operations in
     South Africa and Australia, servicing retail and foodservice customers in 22 countries.

     Its principal business is the fishing of wild-caught MSC certified Cape hake and Shark Bay prawns along
     with horse mackerel, pilchards, anchovies, tuna, prawns, scallops and crabs, the processing of the catch
     into frozen and chilled seafood, and the marketing of these products, locally and internationally.

     Sea Harvest is also one of the most diversified players in the South African aquaculture space, with
     operations spanning abalone, oysters, mussels and trout.

     Employing 3 740 employees and with operations along the entire South African coastline, including the
     rural areas of Kleinzee, Saldanha Bay, Mossel Bay and Buffelsjag, Sea Harvest continues to be one of the
     largest economic drivers in the communities in which it operates.

     Further information on Sea Harvest can be accessed on www.seaharvest.co.za.

3.   Rationale for the Subscription

     Following its listing on the JSE Limited (“JSE”) on 23 March 2017, Sea Harvest has actively sought to grow
     both organically and via acquisitions in the fishing and food sectors in line with the company’s strategy
     and vision of becoming one of the largest black owned diversified global seafood and food companies.
     Brimstone considers it important to support its subsidiary in pursuing this growth strategy and
     additionally further strengthening Sea Harvest’s B-BBEE credentials.

4.   Purchase consideration

     The consideration payable for the Subscription of R300 million will be settled by Brimstone from
     available facilities.

5.   Condition precedent

     The Subscription is conditional upon Sea Harvest shareholders having approved the Subscription by way
     of a special resolution as required in terms of section 41(1)(b) of the Companies Act, No 71 of 2008, by
     no later than the Effective Date.

6.   Net assets and attributable profits

     The net asset value of the Subscription was R226.8 million and the net profit after tax was R4 million as
     extracted from Sea Harvest’s unaudited interim results for the six months ended 30 June 2018, which
     were prepared in accordance with International Financial Reporting Standards.

     The above calculations do not take into account Shares issued subsequent to 30 June 2018 for the
     acquisition by Sea Harvest of the Viking Fishing Group and Forfeitable Share Plan shares issued to Sea
     Harvest management and staff.

7.   Categorisation of the Subscription

     The Subscription is categorised as a Category 2 transaction for Brimstone in terms of the JSE Listings
     Requirements.

17 October 2018
Cape Town

Investment bank, corporate advisor and sponsor
Nedbank Corporate and Investment Banking

Legal advisor
Cliffe Dekker Hofmeyr

Date: 17/10/2018 08:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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