PEMBURY LIFESTYLE GROUP LIMITED – Loan Settlement Agreement, Entering into Convertible Secured Loan Agreement, Updated and Renewed Disclaimer – SENS

                            

An Agreement to Settle a Loan, Conclusion of a Convertible Secured Loan Agreement, Update & Renewal of Cautionary

PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PLG” or “the Company”)
ISIN Code: ZAE000222949 JSE Code: PEM

ANNOUNCEMENT RELATING TO AN AGREEMENT TO SETTLE A LOAN, THE CONCLUSION OF A
CONVERTIBLE SECURED LOAN AGREEMENT, UPDATE ANNOUNCEMENT AND RENEWAL OF
CAUTIONARY

Shareholders are referred to the previous cautionary announcements published, the last being
on 11 October 2022. The Board confirms that it held its strategy session in October 2022,
Furthermore, shareholders are provided with an update below:

Agreements signed
Shareholders are advised that PLG has concluded the following two agreements:

a) A settlement agreement has been signed with A and N Finance Proprietary Limited
(“A&N”), which company had advanced a loan of R4.7m during 2021, secured by the
Raslouw properties (“A&N Loan”). A portion of the A&N Loan has been queried by PLG.
A&N had launched an application to attach the Raslouw properties. A settlement
agreement has been signed whereby the Company has agreed deferred terms, whilst it
resolves the various queries associated with the A&N Loan, which may in turn reduce the
loan owed by PLG, with another party being liable for a portion of the A&N Loan. The
A&N Loan currently bears interest at R47 000 per month;

b) A Convertible Secured Loan Agreement (“Loan Agreement”) with Verityhurst Proprietary
Limited (“Lender”) in terms of which it is prepared to make further cash loans available to
PLG on a secured and convertible basis up to an amount not exceeding R25 000 000
(twenty-five million rand) (“Convertible Loan”).

The Convertible Loan is being made to specifically settle the A&N Loan described above, the
acquisition of debt as previously agreed with third parties (Moore and Abacus) as well as to
enable the commencement of the various outstanding audits and the transfer of two
properties (Willow View and Northriding) acquired a number of years ago by PLG Properties.
Where third party debt is acquired, the amount due to such creditor will become due to
Verityhurst.

Shareholders are reminded that Verityhurst had previously advanced an interest free loan of
R3 400 000 to PLG, which amount will be added to the Convertible Loan of R25 000 000. The
Convertible Loan will be secured by properties held at Raslouw, Northriding and Willow View,
as and when the underlying debt or costs are settled to allow for the transfer of the security to
Verityhurst.

A&N and the Lender are not related parties to PLG as defined in the JSE Listings Requirements.
The A&N Agreement and the Loan Agreement are not transactions as defined in Section 9 of
the JSE Listings Requirements.

At any time prior to the termination date, being three years after signature of the Loan
Agreement, Verityhurst have the option by written notice, to convert the whole of part or the
outstanding balance of the Convertible Loan into shares at a price per share to be determined
between Verityhurst and PLG in accordance with the JSE Listings Requirements from time to
time, which may require shareholder approval. Due to the convertible nature of the
Convertible Loan, it is not interest bearing until the termination date.

With regard to the future potential conversion of all or part of the Convertible Loan into shares,
PLG will consider the JSE Listings Requirements at that point in time and, if required, will issue a
circular for the specific issue of shares for cash, or alternatively, a circular for a rights offer or
claw back offer to the shareholders of the Company.

This will only be undertaken once the Company has published all the outstanding financial
information required in terms of the JSE Listings Requirements and regularised any other
outstanding requirements. A separate announcement will be issued in this regard once the
audits have been completed.

The above funding is central to the turnaround strategy.

Auditors
With the signature of the above Loan Agreement, the Company has secured the funding to
settle the former auditors as well as funding for the audit fees. The agreements and
engagement letters are being finalised and the Audit and Risk Committee is completing its
processes surrounding the re-appointment of the former audit firm. A separate announcement
will be made once the various requirements have been completed, which is expected during
the course of this week.

Property rezoning, property transfers and school registrations
The Company received the go ahead from the Environment Impact Assessment for the
rezoning of its Carlswald property and the Company has been in contact with the City of
Johannesburg, who have assured the Company that they will attend to the matter. This
process has been slow. Once secured, the application for the school registration for both
primary and high school should be finalised.

The final requirements for the rezoning of Raslouw and the school registration are being
followed up. The process also remains slow but steady.

The Springs Academy and Willow View Academy school registrations remain in place. The
Company will be seeking Umalusi accreditation and will commence with the process following
the securing of the Convertible Loan.

In addition, the Company has made contact with the Business Rescue practitioner regarding
the authorisation of the transfer of the Willow View and Northriding properties and has provided
proof of acquisition of the properties, as well as the previous conveyancer’s written
confirmation that all sale conditions had been met. The Board hopes to resolve this long
overdue administrative matter over the next two to three months, including the settlement of
rates and taxes associated therewith.

Ongoing operations and other obligations
The underlying schools continue to operate on a sustainable basis, although insufficient to meet
the historical creditor situation. The Convertible Loan will go a long way to resolving a number
of major creditor issues that have been plaguing the Company for a number of years.
Other obligations are being investigated and settlement arrangements made, on a case-by-
case basis.

Turnaround strategy
The Board is continuing with the turnaround strategy, which includes the regularisation of the
Company with the JSE, CIPC, SARS and the Gauteng Department of Education. This process is
expected to be slow but steady. The Board wishes to thank the various stakeholders for their
patience to date but in particular the parents, students and teachers for their ongoing loyalty.

Renewal of cautionary announcement
Various discussions and negotiations are ongoing as previously announced. Accordingly,
shareholders are advised to continue to exercise caution until a further announcement is
made.

Johannesburg
8 November 2022

Designated Advisor
AcaciaCap Advisors Proprietary Limited

Date: 09-11-2022 07:05:00
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