Spar : financial assistance

This is a notice pursuant to section 45(5) of the Companies Act, No. 71 of 2008 ('Companies Act').

On 7 February 2017, SPAR shareholders approved a special resolution pursuant to section 45 of the Companies Act authorising the board of directors ('board') to provide direct and indirect financial assistance to a related or inter-related company.

Section 45(5) of the Companies Act requires a company to provide written notice to its shareholders, amongst others, of the adoption of a board resolution to provide financial assistance if the total value of all loans, debts, obligations or assistance contemplated in that resolution, together with any previous such resolution during the same financial year, exceeds one-tenth of 1% of the company's net worth at the time of the resolution.

The board has adopted the following resolutions:
- During the period of 9 March 2017 to 28 February 2018, the company shall provide financial assistance to The SPAR Group Ltd. Employee Share Trust (2004) ('Trust') of an amount of R216 000 000.00 (two hundred and sixteen million rand) in order for the Trust to meet its obligations (i.e. acquire shares in the market) with regards to enabling the share option holders to exercise their share options;
- The board is satisfied that immediately after providing this financial assistance, the company will satisfy the solvency and liquidity test as contemplated in section 4 of the Companies Act; and
- The board is satisfied that the terms under which the financial assistance is proposed to be given, are fair and reasonable to the company.

This notice is provided because the value of the financial assistance referred to in paragraph 4 exceeds the threshold stated in paragraph 3.