PSGPSG - PSG GROUP - Internal restructuring, listing and rights offer in respectof a subsidiary, Paladin Capital LimitedPSG GROUP LIMITEDIncorporated in the Republic of South AfricaRegistration number 1970/008484/06JSE share code: PSG ISIN: ZAE000013017("PSG Group")INTERNAL RESTRUCTURING, LISTING AND RIGHTS OFFER IN RESPECT OF A SUBSIDIARY,PALADIN CAPITAL LIMITED ("Paladin" or "the Company")1. INTRODUCTIONThe board of PSG Group is pleased to announce that at the generalmeeting of Paladin shareholders held on Wednesday, 12 August 2009,Paladin shareholders unanimously approved the internal corporaterestructuring required to bring to fruition PSG Group's stated vision oflisting Paladin on the JSE Limited ("the JSE").2. DETAILS OF PALADINPaladin is PSG Group's preferred investment vehicle. Its presentinvestment portfolio comprises a diverse range of listed and unlistedcompanies across various sectors and industries. The company'sinvestment mandate enables it to acquire significant stakes inbusinesses with strong sustainable cash flows and with attractive longterm growth prospects. One of its major investments is a 49.0% interestin the unlisted Thembeka Capital Limited, a black-owned and controlledBEE company which in itself has an investment portfolio including theJSE , Capitec Bank Holdings Limited and PSG Group. Other Paladininvestments include the listed Petmin Limited, CIC Holdings Limited andErbacon Investment Holdings Limited (to name a few). The Paladin boardof directors ("the Board") has valued the Company's current investmentportfolio (net of debt) at approximately R692 million. Additionaldetails of Paladin's investment portfolio will be provided in theabridged pre-listing statement to be published in anticipation ofPaladin's listing per paragraph 4.3. INTERNAL RESTRUCTURINGAn internal corporate restructuring was required to ensure that Paladincould list on the JSE, to accommodate the entry of new shareholders in alisted environment and facilitate future capital raisings by theCompany. As part of such internal restructuring, a management agreementhas been concluded between Paladin and PSG Group in terms of which PSGGroup has been mandated to manage the business of Paladin. Details ofthe management agreement will be contained in the pre-listing statementthat will be posted to Paladin shareholders in due course.4. LISTING ON ALTXIt is intended that Paladin will list on the Altx exchange of the JSE("Altx ") on or about Friday, 28 August 2009 or as soon as ispractically possible thereafter. The Altx Advisory Committee hasapproved such listing and the Company is in the process of obtaining thenecessary approval from the JSE's Issuer Services division. The listingwill be by way of an introduction and there will be no initial capitalraising (save for the rights offer per 5 below). Additional details ofthe listing will be provided in the abridged pre-listing statement to bepublished in due course.5. RIGHTS OFFERAs soon as possible after the listing of Paladin on Altx, the Companywill proceed with a renounceable rights offer in terms of which it willseek to raise approximately R150 million (i.e. 129.31 million rightsoffer shares at R1.16 each)(or such other number or price as the Boardmay determine with reference to prevailing market conditions) from thePaladin and PSG Group shareholders. In terms of the aforegoing, PSGGroup will renounce approximately 65% of its rights in favour of itsshareholders on a pro rata basis. Such PSG Group shareholders will thenbe able to participate in Paladin's rights offer as if they were Paladinshareholders. This will also contribute to an increased shareholderspread and enhanced share liquidity. Additional details of the rightsoffer will be provided in a further announcement to be published in duecourse.6. FINANCIAL EFFECTSThe pro forma financial effects of the aforementioned internalrestructuring and the renounceable rights offer will be disclosed in afurther announcement to be published by PSG Group in due course.Stellenbosch13 August 2009PSG Capital (Pty) Limited: Sponsor to PSG Group and corporate advisor toPaladinQuestco Sponsors (Pty) Limited: Designated advisor to PaladinDate: 13/08/2009 17:38:01 Produced by the JSE SENS Department.The SENS service is an information dissemination service administered by theJSE Limited ('JSE'). The JSE does not, whether expressly, tacitly orimplicitly, represent, warrant or in any way guarantee the truth, accuracy orcompleteness of the information published on SENS. The JSE, their officers,employees and agents accept no liability for (or in respect of) any direct,indirect, incidental or consequential loss or damage of any kind or nature,howsoever arising, from the use of SENS or the use of, or reliance on,information disseminated through SENS.