Masawara : Update on proposed acquisition

Masawara PLC

(the "Company")

Recommended Cash Acquisition of TA Holdings Limited

On 17 July 2014, Masawara (AIM:MASA), the AIM listed investment company, announced that its wholly-owned subsidiary, Masawara Mauritius Limited (which, together with its subsidiaries and affiliates, shall be referred to as "Masawara"), had submitted an offer (the "Offer") to the directors of TA Holdings Limited ("TAH") for it, or its wholly owned subsidiary, to acquire the entire issued share capital of TAH not currently owned by Masawara. Masawara currently owns 41.04% of the issued share capital of TAH and is proposing to acquire the 97,196,650 issued ordinary shares of TAH it does not own (the "Scheme Shares") at an offer price of US$0.206 (twenty point six United States cents) per Scheme Share (the "Acquisition"). The aggregate purchase consideration payable by Masawara for the Scheme Shares is US$20 million.

The Independent Board of TAH has unanimously recommended the cash offer made by Masawara. The Acquisition will be effected by means of a Court-sanctioned scheme of arrangement (the "Scheme"), pursuant to Section 191 of the Companies Act [Chapter 24:03 of the laws of the Republic of Zimbabwe]. Masawara is pleased to announce that the terms and conditions of the offer were released to shareholders of TAH ("TAH Shareholders") in a circular dated 28 August 2014 ("the Scheme Circular").

To become effective, the Acquisition requires inter alia :

- Approval by a majority representing not less than three-fourths of the votes exercisable by eligible TAH Shareholders present and voting, either in person or by proxy, at the court convened meeting of TAH Shareholders which is scheduled for 16 September 2014 (the "Scheme Meeting");

- Subject to the Scheme being approved by the requisite majority at the Scheme Meeting, and subject further to all conditions precedent having been fulfilled, the unconditional sanctioning of the Scheme by the High Court of Zimbabwe ("High Court");

- Lodging of the order of the High Court with the Registrar of Companies of Zimbabwe; and

- Applicable regulatory approvals, including the approval of the Acquisition by Exchange Control Authorities in Zimbabwe.

In the event that the Acquisition is approved by the requisite majority of the TAH Shareholders at the Scheme Meeting, the Scheme is sanctioned by the High Court and the other conditions to the Acquisition are satisfied or waived, all of the Scheme Shares will be acquired by MML, and the listing of the ordinary share capital of TAH on the Zimbabwe Stock Exchange will be terminated. 

The aggregate purchase consideration payable to TAH Shareholders will be funded through a combination of Masawara's internal resources and third party debt. Masawara Holdings Mauritius Limited has, pursuant to the terms of a subscription agreement dated on or about 26 August 2014, agreed to issue 10% fixed rate notes due 36 months after issue ("Notes") in consideration of an aggregate amount of US$11 million. The Notes will be guaranteed, inter alia , by the Company.

As part of the financing arrangements, the Company will, pursuant to the terms of a warrant instrument, issue warrants ("Warrants") to the subscribers of the Notes to subscribe for in aggregate 1,402,500 ordinary shares of US$0.01 in the Company at a strike price of £0.01 which represents approximately 1% of the issued share capital of the Company as at 15 August 2014.  The Warrants will be issued at the time of issue of the Notes which is currently expected to be on or around 01 October 2014.  Pursuant to the terms of the warrant instrument, the Company will agree not to issue any further shares in the Company for a period of 120 days following the issue of the Notes (save for certain limited exceptions) without the consent of the holders of the Notes.

TAH was established in 1935 as Tobacco Auctions (Private) Limited. The Company was listed on the Zimbabwe Stock Exchange in 1964 and over the years diversified out of tobacco into an investment holding company. Today, TAH invests in companies that are making or have the potential to make a positive difference to the future of Africa. At present the Company holds investments in companies operating in the hospitality, insurance, investment management and agrochemical sectors. In the financial year ending 31 December 2013, TAH posted revenues of US$76.829 million and a loss of US$5.687 million. The net assets of TAH were US$47.7 million at 31 December 2013. As at 26 August 2014 (the latest practicable date prior to this announcement), the market capitalisation of TAH was US$23 million.

Copies of this announcement and the Scheme Circular to TAH Shareholders detailing the Acquisition terms are available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Masawara PLC's website (www.masawara.com). For the avoidance of doubt, the content of the websites referred to above is not incorporated into and does not form part of this announcement.

Terms and expressions used in this announcement shall, unless the context otherwise requires, have the same meanings as given to them in the Scheme Document.

About Masawara

Masawara is a proactive investment company focused on identifying growth opportunities that deliver cash returns both in Zimbabwe and the southern African region. The Company continues to appraise high quality new investment opportunities in Zimbabwe to add to the investment portfolio and unlock intrinsic value from the existing investment portfolio.

Contact details

Masawara plc

Oliver Lutz/Pride Masamba +263 4 751805

Cenkos Securities plc (Nominated adviser and broker)

Nicholas Wells/Ian Soanes +44 20 7397 8900

Rand Merchant Bank (Lead Financial Advisor and Debt Arranger to Masawara)

Jan Cronje/Puso Manthatha +27 11 282 8597