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[1]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:

1. https://www.africoil.co.za/wp-content/uploads/2021/08/Afric-Oil-Proprietary-Limited[1]Notice-to-All-Affected-Persons-in-terms-of-Section-151-of-the-Companies-Act.pdf.
2. 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[1]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[1]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.

1. 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.

1. 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.

1. 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