AVENG LIMITED - Declaration announcement in respec16 Feb 2021
Declaration announcement in respect of the Aveng rights offer

AVENG LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1944/018119/06)
ISIN: ZAE000111829
SHARE CODE: AEG
("Aveng" or "the Company")


DECLARATION ANNOUNCEMENT IN RESPECT OF THE AVENG RIGHTS OFFER


 Shareholders are referred to the SENS announcement issued by the Company on Tuesday, 26 January 2021
 in terms of which Shareholders were advised that Aveng intends to raise an amount of ZAR300 000 000 by
 way of a fully co-underwritten renounceable rights offer ("Rights Offer") and further, to the SENS
 announcement issued by the Company on Thursday, 28 January 2021 in terms of which the Company
 announced a delay in the launch of the Rights Offer.

 Shareholders are hereby advised that Aveng intends to launch the Rights Offer of up to 20 000 000 000
 ordinary no par value shares in Aveng ("Aveng Ordinary Shares") and A shares as contemplated in the
 Rights Offer circular ("Rights Offer Shares"). The Rights Offer will be made to qualifying shareholders at a
 subscription price of 1.5 cents per Rights Offer Share ("Rights Offer Price"), in the ratio of 103.12203 Rights
 Offer Shares for every 100 Aveng ordinary shares held on the Rights Offer record date ("Ratio of
 Entitlement"), which is anticipated to be on or about Friday, 26 February 2021 ("Record Date").

 RATIONALE FOR THE RIGHTS OFFER

 Following a multi-year journey, the Company will engage in the restructuring of its balance sheet which will
 allow the Aveng group ("Group") to reset its capital structure, deleveraging its balance sheet by more than R1
 billion, extending the Groupís maturity profile to three years, and simultaneously materially improving the
 Groupís South African liquidity pool. Following this transformational event, Aveng believes that the remaining
 debt is sustainable and the remaining balance is forecast to be repaid over the next three years. Importantly,
 this transaction not only provides Aveng the capital structure flexibility to complete its non-core asset sale
 programme and to wind down its remaining exposure to discontinued businesses, but also sets the Group on
 a path to pursue its strategy around the Groupís core businesses, McConnell Dowell and Moolmans, which
 have returned to profitability and where Aveng sees further business improvement prospects and growth
 opportunities.

 An amount of ZAR300 000 000 will be received by Aveng pursuant to the Rights Offer, a large portion of
 which will be utilised to (i) settle interest due to lenders under facilities made available to Aveng Africa
 Proprietary Limited ("Aveng Africa"), a subsidiary of Aveng, (ii) pay an amount of approximately ZAR61 051
 354 to settle and discharge debt of approximately ZAR184 009 137 due to certain lenders of Aveng Africa, (iii)
 pay to iNguza Investments (RF) Limited ("iNguza"), one of the lenders to Aveng Africa, the cash amount
 required to partially settle and discharge Aveng Africaís debt to iNguza and to early settle certain of the notes
 issued by iNguza in relation to such debt, which amount will be between ZAR148 000 000 and ZAR154 000
 000, depending on the election of the of holders of notes, and which amount will discharge ZAR489 000 000
 to ZAR500 000 000 of Aveng Africaís debt to iNguza. The balance will be retained by Aveng to improve
 liquidity and to allow for Aveng to meet the Groupís debt repayment requirements ("Transaction").

 The Transaction, among other things, will result in the reduction of the debt levels by an amount of
 ZAR1 075 542 041 and an increase in the equity of Aveng by the same amount plus additional capital of
 ZAR78 000 000.

 Shareholders are reminded that, as part of the overall restructure of the Company's balance sheet referred to
 above (of which the Transaction forms part), there will be further specific issues of Aveng shares. There may



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namely be specific issues of shares to the underwriters of the Rights Offer (to achieve their minimum
subscriptions and for their underwriting fees), to certain bank lenders to Aveng Africa (the proceeds of which
will be used to reduce debt due to such lenders), to certain holders of notes issued by iNguza referred to
above (the proceeds of which will also be used to reduce debt due to iNguza) and to management pursuant to
the management incentive plan for 2021. The Company has now finalised the lock-up arrangements with the
underwriters of the Rights Offer and with the bank lenders in relation to the shares so to be issued to them
under these specific issues as follows: For the underwriters, 50% of such shares will immediately be freely
transferable and the balance will be locked-up for 12 months (excluding shares issued pursuant to their
underwriting fees). For the bank lenders, 50% of such shares will be locked-up for 18 months and the
balance will be locked up for 24 months.

SALIENT TERMS OF THE RIGHTS OFFER

In terms of the Rights Offer, the Rights Offer Shares will be issued to Aveng shareholders recorded in Aveng's
share register at the close of business on the Record Date, at the Rights Offer Price in the Ratio of
Entitlement. Aveng will raise an amount of ZAR300 000 000 in terms of the Rights Offer.

The Rights Offer Price represents a discount of 39.5% to the 30 day volume weighted average traded price of
Aveng's ordinary shares of 2.478 cents as at 27 November 2020.

Excess applications for Rights Offer Shares will not be allowed and any Rights Offer Shares that are not
accepted, renounced or sold shall revert to the underwriters. The Rights Offer is conditional on the
underwriters receiving a collective minimum issue to them of ZAR203 000 000.

The Rights Offer Shares issued will rank pari passu with the existing issued shares of Aveng, save in respect
of the A shares which will not carry any voting rights save for voting rights on matters affecting that class of
shares.

IRREVOCABLE COMMITMENT AND UNDERWRITING

Highbridge Tactical Credit Master Fund, L.P., Highbridge SCF Special Situations SPV, L.P (collectively
"Highbridge Funds"), Whitebox Multi Strategy Partners L.P., Whitebox GT Fund L.P., Pandora Select
Partners L.P. and Whitebox Caja Blanca Fund L.P. (collectively, " Whitebox Funds" and with the Highbridge
Funds, "the Underwriters"). The Highbridge Funds currently hold 19.07%, and the Whitebox Funds hold
11.99%, of the issued share capital of Aveng.

The Underwriters have provided Aveng with an irrevocable commitment to follow their rights in terms of the
Rights Offer and to subscribe for all of the ordinary shares to which they are entitled under the Rights Offer.
The balance of the Rights Offer will also be underwritten by the Underwriters representing 68.94% of the
Rights Offer Shares. The aforesaid commitment and underwriting fee will constitute 3%, excluding value-
added tax, of the amount underwritten.

SALIENT DATES AND TIMES

                                                                                                        2021

Declaration date                                                                                       Tuesday, 16 February
Finalisation announcement released on SENS (before 11:00), on                                         Thursday, 18 February
Circular to be made available on Aveng website                                                          Monday, 22 February
Last day to trade in shares in order to participate in the Rights Offer (cum                           Tuesday, 23 February
entitlement)
Shares commence trading ex-entitlement at 09:00 on                                                    Wednesday, 24 February



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                                                                                                                        2021

Listing of and trading in the letters of allocation under code AEGN and ISIN                          Wednesday, 24 February
ZAE000295481 on the JSE commences at 09:00 on
Circular and a form of instruction, where applicable, posted to qualifying
certificated shareholders on                                                                            Thursday, 25 February
Record date at 17:00 on                                                                                   Friday, 26 February
Rights Offer opens at 09:00 on                                                                                Monday, 1 March
In respect of qualifying certificated shareholders, letters of allocation credited to
an electronic account held with the transfer secretaries at 09:00 on                                          Monday, 1 March
Circular emailed to qualifying dematerialised shareholders                                                    Monday, 1 March
In respect of qualifying dematerialised shareholders, CSDP or broker accounts
credited with letter of allocation at 09:00 on                                                                 Monday, 1 March
Last day to lodge form of instruction with the transfer secretaries in respect of                             Tuesday, 9 March
qualifying certificated shareholders (or their renouncees) wishing to sell all or
some of their letters of allocation by (12:00) on
Last day to trade letters of allocation on the JSE                                                             Tuesday, 9 March
Listing of Rights Offer Shares and trading therein on the JSE commences at                                  Wednesday, 10 March
09:00 on
Last day for restricted shareholders to lodge qualified institutional buyers'                                   Friday, 12 March
investor letters to Aveng at 12:00 on
Rights Offer closes at 12:00 on                                                                                Friday, 12 March
Payment to be made and form of instruction to be lodged with the transfer                                       Friday, 12 March
secretaries by qualifying certificated shareholders wishing to renounce or
subscribe for all or part of their entitlement at 12:00 on
Record date for letters of allocation on                                                                        Friday, 12 March
Rights Offer Shares issued on                                                                                   Monday, 15 March
In respect of qualifying dematerialised shareholders (or their renouncees),
CSDP or broker accounts debited with the aggregate Rights Offer Price and
updated with Rights Offer Shares at 09:00 on
                                                                                                              Monday, 15 March
In respect of qualifying certificated shareholders (or their renouncees), share
certificates in respect of Rights Offer Shares posted on or about                                             Monday, 15 March
Results of the rights offer announced on SENS on                                                              Monday, 15 March

 Notes:

 1.   If you are a qualifying dematerialised shareholder you are required to notify your duly appointed CSDP or broker of your acceptance
      of the Rights Offer in the manner and time stipulated in the agreement governing the relationship between yourself and your CSDP
      or broker.
 2.   CSDPs effect payment on a delivery versus payment method in respect of qualifying dematerialised shareholders.
 3.   Shareholders may not dematerialise or rematerialise their Ordinary Shares between Wednesday, 24 February 2021, and Friday, 26
      February 2021, both dates inclusive.
 4.   All times are South African times.
 5.   Share certificates will be posted by registered post at the risk of the qualifying certificated shareholders (or their renouncees).




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TAXATION

Shareholders are advised to consult their tax and financial advisors regarding any taxation implications
pertaining to them regarding the acceptance of their rights in terms of the Rights Offer.

FRACTIONAL ENTITLEMENT

The number of rights to subscribe for Rights Offer Shares to which qualifying shareholders will become
entitled will be determined by the Ratio of Entitlement. Only even whole numbers of Rights Offer Shares will
be issued and shareholders will be entitled to subscribe for rounded numbers of Rights offer Shares once the
Ratio of Entitlement has been applied. Fractional entitlements and all odd numbers will be rounded up to the
nearest even number. The reason even numbers are required is that the Rights Offer Price is 1.5 cents and
therefore an even number is required to make it a full cent.

FOREIGN SHAREHOLDERS

Any shareholder resident outside the common monetary area who receives the Rights Offer circular and form
of instruction, should obtain advice as to whether any governmental and/or any other legal consent is required
and/or any other formality must be observed to enable such a subscription to be made in terms of such form
of instruction.

The Rights Offer does not constitute an offer in any jurisdiction in which it is illegal to make such an offer
("Restricted Territories") and the Rights Offer circular and form of instruction should not be forwarded or
transmitted by recipients thereof to any person in any territory other than where it is lawful to make such an
offer.

United States of America

The letters of allocation and the Rights Offer Shares have not been and will not be registered under the
Securities Act, 1933 ("US Securities Act") or under securities laws of any Restricted Territory and may not be
offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the
United States of America, except in respect of Qualified Institutional Buyers as contemplated under the US
Securities Act ("QIB") pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act and in compliance with any applicable securities laws of any state or
other jurisdiction of the United States of America. Investors who are located in the United States of America
will be required to execute and deliver an QIB investor letter ("QIB Letter"), a copy of which is available from
shareholders' CSDPs, prior to taking up or transferring Rights in the Rights Offer or acquiring Rights Offer
Shares in the Rights Offer.

Shareholders who are required to submit a QIB Letter must do so by emailing same to
edinah.mandizha@aveng.co.za on or before 12:00 on Friday, 5 March 2021.

Accordingly, the Company is not extending the Rights Offer into the United States of America unless an
exemption from the registration of the US Securities Act is available, and subject to certain exceptions, the
Rights Offer circular neither constitutes nor will it constitute an offer or invitation to apply for, or an offer or an
invitation to acquire, any letters of allocation or Rights Offer Shares in the United States of America.

Subject to certain exceptions, the Rights Offer circular will not be sent to any foreign Aveng shareholder in, or
with a registered address in, the United States of America. Subject to certain exceptions, any person who
acquires letters of allocation or the Rights Offer Shares will be deemed to have declared, warranted and
agreed, by accepting delivery of the Rights Offer circular, taking up their Rights or accepting delivery of the
letters of allocation or the Rights Offer Shares, that it is not, and that at the time of acquiring the letters of
allocation or the Rights Offer Shares it will not be, in the United States of America or acting on behalf of, or for




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the account or benefit of, a person on a non-discretionary basis in the United States of America or any state of
the United States of America.

In addition, until 40 days after the commencement of the Rights Offer, an offer, sale or transfer of the Rights
Offer Shares or the letters of allocation within the United States of America by a dealer (whether or not
participating in the Rights Offer) may violate the registration requirements of the US Securities Act. Subject to
certain exceptions, Aveng shareholders with a registered address in the United States of America will be
treated as unexercising holders and Aveng expects that the applicable Rights will be sold by the transfer
secretaries on behalf of such Aveng shareholders. The cash proceeds therefrom will be distributed to such
Aveng shareholders (net of applicable fees, expenses, taxes and charges), in proportion to such Aveng
shareholderís Right to the Rights Offer Shares.

There can be no assurances as to what price such Aveng shareholders will receive for such disposal or the
timing or exchange rate conversion of such receipt, to the extent applicable.

Although letters of allocation may be credited to the CSDP or broker accounts of qualifying dematerialised
Aveng shareholders:

    -   with a registered address, or resident, in one of the Restricted Territories;

    -   in the United States of America; or

    -   with a registered address, or who hold on behalf of persons located in the United States of America,
        or who hold on behalf of any person on a non-discretionary basis who is in the United States of
        America or any state of the United States of America, such crediting of letters of allocation does not
        constitute an offer to restricted Aveng shareholders and such restricted Aveng shareholders will not
        be entitled to take up or transfer Rights in the Rights Offer or acquire Rights Offer Shares in the
        Rights Offer unless such action would not result in the contravention of any registration or other legal
        requirement in any jurisdiction.

Restricted Territories

Subject to certain exceptions, the letters of allocation and the Rights Offer Shares may not be transferred or
sold to, or renounced or delivered in, the Restricted Territories.

No offer of Rights Offer Shares is being made by virtue of the Rights Offer circular into the Restricted
Territories.

No person may forward or otherwise transmit the Rights Offer circular to any territory other than where it is
lawful to make the Rights Offer contemplated in the Rights Offer circular.

Although letters of allocation may be credited to the CSDP or broker accounts of qualifying dematerialised
Aveng Shareholders:

    -   with a registered address, or resident, in one of the Restricted Territories;

    -   in the United States of America; or

    -   with a registered address, or who hold on behalf of persons located in the United States of America,
        or who hold on behalf of any person on a non-discretionary basis who is in the United States of
        America, or any state of the United States of America, such crediting of letters of allocation does not
        constitute an offer to restricted Shareholders and restricted Shareholders will not be entitled to take
        up or transfer Rights in the Rights Offer or acquire Rights Offer Shares in the Rights Offer unless such




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        action would not result in the contravention of any registration or other legal requirement in any
        jurisdiction.

Subject to certain exceptions, Aveng shareholders with a registered address in the Restricted Territories will
be treated as unexercising holders and Aveng expects that the applicable Rights will be sold by the transfer
secretaries on behalf of such Aveng shareholders.

The cash proceeds therefrom will be distributed to such Aveng Shareholders (net of applicable fees,
expenses, taxes and charges) in proportion to such Aveng shareholderís Right to the Rights Offer Shares.
There can be no assurances as to what price such Aveng shareholders will receive for such disposal or the
timing or exchange rate conversion of such receipt to the extent applicable.




Johannesburg
16 February 2021


JSE Sponsor

UBS


Transaction advisor

DGCapital


Legal advisor

Baker McKenzie


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Date: 16-02-2021 04:51:00
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