JD : Declaration Announcement in Respect of their Rights Offer

JD Group Limited
(Incorporated in the Republic of South Africa) (Registration No. 1981/009108/06)
("JD Group" or "the Company")
Share code: JDG ISIN: ZAE000030771
Bond code: JDGCB ISIN: ZAE000168415

1.1 Shareholders are referred to the announcements published on SENS on 11 April 2014 and 21 May 2014 (collectively the "SENS Announcements") advising shareholders, inter alia, that:

be underwritten by Steinhoff International Holdings
Ltd ("Steinhoff") (the "Rights Offer"); and
1.1.2 the proceeds of the Rights Offer will be utilised to reduce JD Group's debt, primarily the redemption of the JD Group Convertible Bonds to the extent that bondholders exercise their rights to elect early redemption pursuant to the change of control notice released on SENS on 14 April 2014.

2. SALIENT TERMS OF THE RIGHTS OFFER
2.1 In terms of the Rights Offer, JD Group will offer
40 000 000 ordinary shares in the authorised share
capital of the Company ("Rights Offer Shares") to shareholders, at a subscription price of R25.00 per Rights Offer Share, in the ratio of 17.44148 Rights Offer Shares for every 100 JD Group ordinary shares ("JDG Shares") held on the record date of the Rights Offer.
2.2 The aforementioned subscription price represents the JD Group share price as at the close of trade on 10 April
2014, which is the day after the conclusion of the
underwriting agreement between JD Group and Steinhoff
("Underwriting Agreement").
2.3 The implementation of the Rights Offer is conditional upon the approval thereof by the JSE Limited ("JSE"), which approval is anticipated to be received in due course.
2.4 The Rights Offer will not include the right for shareholders to apply for excess Rights Offer Shares.
2.5

3.1 In terms of the Underwriting Agreement, Steinhoff has agreed to follow its rights in terms of the Rights Offer and to underwrite the remaining balance of the Rights Offer in full. Steinhoff has, however, retained the right to secure third-party sub-underwriters to all or a portion of the Rights Offer, underwritten by Steinhoff, in its sole discretion and on terms and conditions to be agreed between Steinhoff and the respective third party/ies ("Underwriter"). Thus, all rights not taken up by qualifying shareholders will revert to the Underwriter.
3.2 In terms of the Underwriting Agreement, an underwriting and commitment fee equal to 2.5% of the amount raised in terms of the Rights Offer, being a maximum amount of R25,0 million (excluding VAT), is payable by the Company to the Underwriter, which underwriting and commitment commission is, in the opinion of the JD Group board of directors ("Board"), a competitive market rate. In terms of the Underwriting Agreement, the underwriting and commitment fee is only payable upon fulfillment of the underwriting and subscription commitment by the Underwriter.

4.1 The pro forma financial effects of the Rights Offer on JD Group are based on the unaudited interim results for the six-month period ended 31 December 2013, which was compiled in terms of the JSE Listing Requirements and the Guide on Pro Forma Financial Information issued by SAICA, the preparation of which is the responsibility of the directors of the Company.
4.2 The pro forma financial information should be read in conjunction with the independent reporting accountant's report thereon, a copy of which will be included in the Rights Offer circular to shareholders ("Circular").
4.3 The unaudited pro forma financial information has been prepared for illustrative purposes only to provide information as to how the Rights Offer might have impacted on the financial position and results of JD Group, assuming that the Rights Offer had been implemented on 31 December 2013 for purposes of the statement of financial position, and on 1 July 2013 for purposes of the statement of comprehensive income, and because of its nature, may not give a fair reflection of JD Group's financial position and results, changes in equity or cash flows after the Rights Offer.
Unaudited
6 months ended 31
December
2013(1)

Pro forma adjustment relating

to the Rights Offer (2)

Pro forma adjustment effect of the Rights Offer

Percentage change
Basic loss per share
(cents) (67.1) 15.3 (51.8) 22.8%
Headline loss per share
(cents) (59.1) 14.1 (45.0) 31.3%
Basic diluted loss per share
(cents) (58.9)
Anti- dilutive
Anti- dilutive
Anti- dilutive
Headline diluted loss per share
(cents (66.9)
Anti- dilutive
Anti- dilutive
Anti- dilutive
NAV per share
(cents) 3 835 (221) 3 614 (5.7%)
Ordinary Shares in issue
('000) 229 338 40 000 269 338 17.4%
Weighted average number of Ordinary Shares in issue
basic 225 681 40 000 265 681 17.72%
Weighted average number of Ordinary Shares in issue
diluted 226 297 40 000 266 297 17.68%%

1. The "Unaudited 6 months ended 31 December 2013" column is based

on the JD Group unaudited results for the six-month period ended

31 December 2013.

2. The "Pro forma adjustment relating to the rights offer" column

refers to the impact of the Rights Offer.

3. The cash inflow from the Rights Offer is earmarked to repay the

convertible bond amounting to R1,0 billion to the extent

exercised. It is assumed that cash inflow and repayment of the convertible will occur on 1 July 2013 for statement of comprehensive income purposes and on 31 December 2013 for statement of financial position purposes. The interest saving relating to the convertible debt was determined at the effective interest rate of this bond. The interest savings are of a continuing nature.

4. The re-measurement of the convertible bond at redemption date resulted in a once-off loss of R26,0 million. The volume weighted average price for the month of June 2013 was used to determine a fair value relating to the convertible bond.

5. The tax has been determined by applying the effective tax rate

of 28% to the taxable income, which resulted from points 3 and

4.

6. It is assumed that all the Rights Offer Shares are issued in

terms of the Rights Offer.

7. The convertible bondholders have the option to elect either a

cash settlement or settlement in shares. Based on the current share price of JD Group, it is expected that the convertible bondholders will elect settlement in cash. However, should bondholders elect the conversion option, then approximately 220

JDG Shares will be allocated to bondholders for each bond being

converted. Assuming a JDG Share price of R27.00 per share, the value of the JDG Shares would be approximately R5 940.00, compared to the redemption value of each bond being R10 000.00 if the Redemption Option is elected. The share settlement option therefore appears highly unlikely based on the value of the respective options.

8. Once-off transaction costs amounting to R30.2 million have been

debited to stated capital.

9. It is assumed that all the Rights Offer Shares are issued in terms of the Rights Offer and that 40 000 000 Rights Offer Shares are therefore exercised at R25.00 per share. This resulted in an adjustment to equity of R1,0 billion, before expenses of R30.2 million debited against stated capital. The re-measurement of the liability to its fair value on redemption date resulted in a portion of equity recognised on initial recognition being transferred to liabilities and settled in cash amounting to R21,0 million.

10. At initial recognition the deferred tax relating to the issue of

the convertible bonds was recognized in equity. With the payment of the liability, a portion of the deferred tax recognized in equity is now released.

11. There are no other post balance sheet events which need

adjustment to the pro forma financial information.

The salient dates and times of the Rights Offer are as follows:

Declaration data released on SENS Friday, 23 May
Finalisation data released on SENS Tuesday, 27 May
Last day to trade in JDG Shares in order to participate in the Rights Offer (cum

entitlement) Friday, 30 May

Listing of and trading in the Letters of Allocation under the JSE Code JDGN and ISIN ZAE000191243 on the JSE commences at
09:00 on Monday, 2 June
JDG Shares commence trading ex-Rights on
the JSE at 09:00 on Monday, 2 June
Circular posted to Certificated
Shareholders together with a Form of
Instruction Tuesday, 3 June Record Date for the Rights Offer Friday, 6 June Rights Offer opens at 09:00 on Monday, 9 June
Certificated Shareholders will have their Letters of Allocation credited to an electronic account held at the Transfer
Secretaries Monday, 9 June
Dematerialised Shareholders will have their accounts at their CSDP or Broker
credited with their entitlement Monday, 9 June
Circular posted to Dematerialised
Shareholders on Monday, 9 June
Last day for trading Letters of
Allocation on the JSE
Form of Instruction lodged by
Certificated Shareholders wishing to sell all or part of their entitlement at the
Transfer Secretaries by 12:00
Listing of Rights Offer Shares and
Thursday, 12
June
Thursday, 12
June
trading therein on the JSE commences Friday, 13 June
Rights Offer closes at 12:00. Payment to be made and Form of Instruction lodged by Certificated Shareholders wishing to renounce or subscribe for all or part of the entitlement at the Transfer
Secretaries* on Friday, 20 June
Record Date for the Letters of Allocation Friday, 20 June
Rights Offer Shares issued and posted to
Shareholders in certificated form on or
about Monday, 23 June
CSDP or Broker accounts in respect of Dematerialised Shareholders will be updated with Rights Offer shares and
debited with any payments due on Monday, 23 June
Results of Rights Offer announced on SENS Monday, 23 June

*CSDPs effect payment in respect of Dematerialised Shareholders on a delivery versus payment method.

1. All times are South African times.

2. JD Group Shareholders may not dematerialise or rematerialise their JDG Shares between Monday, 2 June 2014, and Friday, 6 June 2014, both dates inclusive.

6.1 Any shareholder resident outside the common monetary area who receives the Circular and Form of Instruction, should obtain advice as to whether any governmental and/or any other legal consent is required and/or any other formality must be observed to enable such a subscription to be made in terms of such Form of Instruction.
6.2 The Rights Offer does not constitute an offer in any jurisdiction in which it is illegal to make such an offer and the Circular and Form of Instruction should not be forwarded or transmitted by recipients thereof to any person in any territory other than where it is lawful to make such an offer.
6.3 The Rights Offer Shares have not been and will not be registered under the Securities Act of the United States of America. Accordingly, the Rights Offer Shares may not be offered, sold, resold, delivered or transferred, directly or indirectly, in or into the United States or to, or for the account or benefit of, United States persons, except pursuant to exemptions from the Securities Act. The Circular and the accompanying documents are not being, and must not be, mailed or otherwise distributed or sent in, into or from the United States. The Circular does not constitute an offer of any securities for sale in the United States or to United States persons. The Rights Offer contained in the Circular does not constitute an offer in the District of Colombia, the United States, the Dominion of Canada, the Commonwealth of Australia, Japan or in any other jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer.

governmental or other consents are required or other
formalities need to be observed to allow them to take up the Rights Offer, or trade their entitlement therein.
6.5 To the extent that non-qualifying shareholders are not entitled to participate in the Rights Offer as a result of the aforementioned restrictions, such non-qualifying shareholders should not take up their Rights Offer entitlement or trade in their Rights Offer entitlement
and should allow their rights in terms of the Rights
Offer to lapse.

The Circular containing full details of the Rights Offer will be posted to shareholders on the dates set out in paragraph 5 above, subject to the approval of the Rights Offer by the JSE as referred to in paragraph 2.3 above.
BY ORDER OF THE BOARD
Steinhoff Africa Secretarial Services (Pty) Ltd
COMPANY SECRETARY
Johannesburg
23 May 2014
Corporate Advisor and Sponsor: PSG Capital Proprietary
Limited

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