HUGE GROUP LIMITED - Announcement in respect of an additional investment in Huge Networks

Announcement in respect of an additional investment in Huge Networks

HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG       ISIN: ZAE000102042
(“Huge” or “Huge Group” or “the Company”)


ANNOUNCEMENT IN RESPECT OF AN ADDITIONAL INVESTMENT IN HUGE NETWORKS

The board of directors of Huge Group is pleased to announce that Huge Telecom
Proprietary Limited (Huge Telecom), a wholly owned subsidiary company of the
Company, has concluded an agreement (the Agreement) to acquire an additional
1 000 ordinary shares (the Additional Investment) in Huge Networks Proprietary Limited
(Huge Networks) from Otel Communications Proprietary Limited (Otel
Communications) for a purchase consideration of R15 million. As a result of the
Additional Investment, Huge Telecom will hold 2 001 ordinary shares in Huge Networks,
making Huge Networks a wholly owned subsidiary company of Huge Telecom.

Huge Telecom acquired 100 ordinary shares in Sainet Internet Proprietary Limited
(Sainet) from Connectnet Broadband Wireless Proprietary Limited (ConnectNet) for
R25.8 million after Huge Group acquired ConnectNet on 30 March 2017. Sainet was a
wholly owned subsidiary company of ConnectNet, which ConnectNet had acquired
a few years earlier for R25.8 million. Shortly after these transactions, ConnectNet
changed its name to Huge Connect and Sainet changed its name to Huge Networks.
At the time, the annual revenue generated by Huge Networks amounted to R37.5
million.

In May 2019, Huge Telecom subscribed for 901 ordinary shares in Huge Networks at par.
Shortly thereafter, Huge Networks acquired the business of Otel Communications from
Otel Communications and the business of Otel Business Proprietary Limited (Otel
Business) from Otel Business. The purchase consideration for the business of Otel
Communications was settled by the issue by Huge Networks of 600 ordinary shares. The
purchase consideration for the business of Otel Business was settled by the issue by
Huge Networks of 400 ordinary shares. Otel Business distributed its ordinary shares in
Huge Networks to Otel Communications.

For the financial year ended 28 February 2022, Huge Networks generated revenue of
c. R104.8 million and EBITDA (earnings before interest, taxation, depreciation, and
amortisation) of c. R13.5 million.

Transaction categorisation and confirmation in relation to constitutional documents

The Additional Investment is not categorizable as a transaction in terms of section 9 of
the JSE Listings Requirements.

Johannesburg
31 May 2022

Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 31-05-2022 05:25:00
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