Disposal by Sasfin of its head office building to Primegro Properties Ltd Strategic relationship between Sasfin and Primegro Properties Limited effected through the disposal by the Sasfin group of its head office building to Primegro Properties Limited, the leaseback thereof, and the acquisition by the Sasfin group of 25% of the issued share capital of Primegro Asset Managers Pty Ltd Sasfin announce that it has agreed, subject to the fulfilment of various conditions precedent, to enter into a strategic relationship with Primegro Properties Ltd ("Primegro"), a new property loan stock company to be listed on the JSE Limited ("JSE"), to be effected through the disposal by Sasfin Properties III Proprietary Limited, a wholly-owned subsidiary of Sasfin ("Sasfin Properties III"), of Sasfin`s head office building, situated at 29 Scott Street, Waverley, Johannesburg ("the Sasfin property") to Primegro, for a consideration of R167.9 million, to be settled as to R134.32 million in cash and R33.58 million in linked units to be issued by Primegro ("Primegro linked units"), subject to adjustment as set out in paragraph 4.1.1 below ("the proposed transaction"). In terms of the proposed transaction, Sasfin and its subsidiaries ("the Sasfin group") will continue to occupy the Sasfin property and Sasfin Bank Limited, a wholly-owned subsidiary of Sasfin ("Sasfin Bank"), will enter into a new lease on market related terms. Sasfin, through another wholly-owned subsidiary, Sasfin Financial Services Proprietary Limited ("Sasfin Financial Services") will acquire, for no additional consideration, a 25% interest in the asset management company, Primegro Asset Managers Proprietary Limited ("Primegro Asset Managers"), formed by the promoters of Primegro ("the promoters") to provide asset management services to Primegro. Through this vehicle, the Sasfin group will partner with the promoters to grow Primegro into a significant property fund in the South African market. Sasfin has ongoing access to deal flow in the property sector and, through its core banking and wealth management businesses, strong relationships with South African institutional investors, financial institutions and high net worth investors. As stated in Sasfin`s 2011 integrated report, the Sasfin group has taken a strategic decision that it will no longer make available property private equity finance on a proprietary basis, but for the reasons above, still retains a keen interest in participating in the property sector, and has decided to do so through establishing a relationship with Primegro and the promoters. The proposed transaction is value enhancing to Sasfin shareholders. Sasfin Properties III, the owner of the Sasfin property, has entered into a sale of letting enterprise agreement with Primegro in terms of which Sasfin Properties III will dispose of the property letting enterprise in respect of the Sasfin property, as a going concern, to Primegro, for a purchase consideration of R167.9 million, subject to adjustment as set out below ("the purchase consideration"). The effective date of the agreement is the date of transfer of the Sasfin property to Primegro, which is anticipated to take place on the date of, and is subject to, the Primegro listing. The purchase consideration will be settled on the date of transfer of the Sasfin property as follows: *20% (R33.58 million) will be settled by way of the issue of Primegro linked units to Sasfin Properties III (or its nominee); and *80% (R134.32 million) will be settled in cash ("the cash portion"). In the event that the net asset value attributable to the Primegro linked units issued to Sasfin Properties III is less than R30.2 million as at the last practicable date set out in Primegro`s pre-listing statement, the shortfall will be made up by Primegro, either by way of a cash payment or by way of the issue of additional Primegro linked units to Sasfin Properties III, at Primegro`s sole election,. Conditions precedent of the sale agreement The sale agreement is subject to the following outstanding conditions precedent, that: *by no later than 10 business days after the signature date, Sasfin Bank enters into a new lease agreement; *by no later than the later of i) 30 business days after the signature date; or ii) 30 business days from the date on which all items required by Primegro to complete its due diligence investigation are given to Primegro or iii) any agreed extended date, but no later than 15 March 2012, Primegro has completed a due diligence, to its satisfaction, on the Sasfin property; *by no later than 60 business days after the signature date: *a registered bank or financial institution grants a loan to Primegro of not less than 60% of the cash portion, on standard terms and conditions; *the shareholder of Sasfin Properties III adopts a special resolution in terms of sections 112 and 115 of the Companies Act, 71 of 2008, as amended, approving the proposed transaction; *the shareholders of Primegro adopt an ordinary resolution, approving the proposed transaction and the issue of the Primegro linked units to Sasfin Properties III, or its nominee which will also be a subsidiary of Sasfin; *by no later than 60 business days after the signature date, Primegro has obtained irrevocable undertakings from investors to subscribe for Primegro linked units for an aggregate subscription price of not less than 40% of the cash portion; *by no later than 90 calendar days after the signature date: *the shareholders of Primegro Asset Managers enter into a subscription and shareholders` agreement; *Sasfin Financial Services, Primegro and Primegro Asset Managers enter into a put option agreement in relation to Sasfin Financial Services` interest in Primegro Asset Managers; *Primegro and Primegro Asset Managers enter into an asset management agreement, and such agreements become unconditional as to their terms; *Sasfin Properties III notifies Primegro that Primegro`s memorandum of incorporation is acceptable to Sasfin Properties III; and *a new memorandum of incorporation for Primegro Asset Managers is adopted by its shareholders; *by no later than 1 July 2012, the Primegro linked units are listed on the JSE. It is Sasfin's intention to retain the Primegro linked units in the short to medium term, and Sasfin will assess this on an ongoing basis. R100 million of the cash proceeds received will be used to settle the mortgage bond owing to Nedbank Limited in respect of the Sasfin property, and the balance of the cash proceeds will be used to settle other interest bearing debt within the Sasfin group.