16 Aug - 4 min read

Update on Business Rescue Proceedings at Material Subsidiary

Update on Business Rescue Proceedings at Material Subsidiary

EFORA ENERGY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE Share Code: EEL
ISIN: ZAE000248258
(“Efora” or “the Company”)


UPDATE ON BUSINESS RESCUE PROCEEDINGS AT MATERIAL SUBSIDIARY


Shareholders of the Company (“Shareholders”) are referred to the announcement issued on 20 April
2021 (“Change Statement”) wherein the Company confirmed the commencement of business
rescue proceedings at Afric Oil Proprietary Limited (“Afric Oil”), a 71% owned subsidiary. This
announcement serves to provide an update on the business rescue proceedings at Afric Oil.

1. On 30 July 2021, the business rescue practitioners (‘BRPs’) of Afric Oil published a proposed
   business rescue plan (the ‘Plan’) for the Company. The Plan is available on the Afric Oil website
   at https://www.africoil.co.za/wp-content/uploads/2021/08/Afric-Oil-Proprietary-Limited-Business-
   Rescue-Plan.pdf.

2. Subsequent to that, the BRPs on the same day issued a notice convening a meeting of creditors
   in terms of section 151 of the Companies Act, 2008, as amended (‘Companies Act’) for
   creditors to consider and vote on the proposed Plan (the ‘s151 Meeting’).

3. The BRPs also convened a meeting to consider the offers received from the interested parties
   as well as a meeting of creditors in terms of section 143(3) of the Companies Act for creditors to
   consider and vote on the approval of the agreement for further remuneration of the BRPs (the
   ‘s143 meeting’). See paragraphs 5 to 7 relating to the offers received.

4. The s151 Meeting and s143 Meeting were held electronically on 12 August 2021 at 10h00 via
   the Microsoft Teams platform due to the lockdown restrictions. The notices of these meetings
   are available on the Afric Oil website at:

       a. https://www.africoil.co.za/wp-content/uploads/2021/08/Afric-Oil-Proprietary-Limited-
          Notice-to-All-Affected-Persons-in-terms-of-Section-151-of-the-Companies-Act.pdf.
       b. https://www.africoil.co.za/wp-content/uploads/2021/08/Afric-Oil-Pty-Ltd-Section-143-
          Notice.pdf.

5. Prior to the publication of Plan by the BRPs, a total of ten potential bidders initially expressed
   their interest in a potential transaction involving Afric Oil. All ten interested parties signed a non-
   disclosure and confidentiality agreement and were granted access to a data room to enable
   them to conduct a due diligence on the operational, financial and legal aspects of Afric Oil.

6. From this process, the BRPs received two binding offers from two interested parties for the
   acquisition of the entire issued share capital or 100% shareholding in Afric Oil and one offer for
   the acquisition of Boland Diesel and other assets. The Plan is underpinned by these three
   offers.

7. A summary of the offers received is provided below and further details pertaining to the offers
   are contained in a circular available on the Afric Oil website at https://www.africoil.co.za/wp-
   content/uploads/2021/08/Circular-Four-To-Known-Creditors-Other-Affected-Persons.pdf. The
   circular also outlines the outcome of the meetings mentioned in paragraphs 2 and 3.
       a. The first binding offer received by the BRPs is from Royale Energy Proprietary Limited
          (Royale Offer) or it’s nominee for the acquisition of the entire issued share capital or
          100% shareholding in Afric Oil for a nominal amount of R100 or sale of business as a
          going concern including all assets and shares in subsidiaries for R40 million. In turn,
          Royale will pay R40 million for the assets, alternatively, advance R40 million to the BRPs
          in order to settle the business rescue costs and creditors as envisaged in the order of
          distribution and payment waterfall in the published Plan. Royale has already conducted
          and concluded its due diligence.

       b. The second binding offer received by the BRPs is from Link Value Lamar Resources
          Limited (LVLR Offer) or it’s nominee for the acquisition of the entire issued share capital
          or 100% shareholding in the Company for a nominal amount of R2 650 as well as claims
          in the loan account against the Company. In turn, LVLR will lend and advance to the
          BRPs a loan of R32 997 250 in order to settle the business rescue costs and creditors
          as envisaged in the order of distribution and payment waterfall in the published Plan. A
          limited due diligence was conducted by LVLR.

       c. The third non-binding offer received by the BRPs is from Watts Energy Proprietary
          Limited (Watts Offer) for the acquisition of the storage depot known as Boland Diesel
          situated in Moorreesburg, 42 million litre tanker and rigid for the amount of R5 880 000.

8. At the s151 Meeting creditors approved the Plan, considered the offers received and resolved to
   pursue the disposal of the Afric Oil business to Royale.

9. The BRPs will proceed to implement the Plan and the Royale offer, as adopted and approved
   by creditors and will report to creditors and other affected persons on the implementation of the
   Plan and the Royale offer.

10. The Company will issue further updates in this regard as the process unfolds.


Johannesburg
16 August 2021

Sponsor
PSG Capital


For further information please contact:

Efora Energy Limited
Darrin Arendse

+27 (0)10 591 2260

About Efora

Efora Energy Limited is a South African based independent African oil and gas company, listed on
the JSE. The Company has a diverse portfolio of assets spanning production in Egypt; exploration
and appraisal in the Democratic Republic of Congo; a midstream project relating to crude trading in
Nigeria and material downstream distribution operations throughout Southern Africa. Our focus as a
Group is on delivering energy for the African continent by using Africa’s own resources to meet the
significant growth in demand expected over the next decade.

Date: 16-08-2021 11:55:00
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