Brimstone Investment : - participation in private placement

Brimstone shareholders are advised that the Company has entered into an irrevocable undertaking and underwriting agreement ("the Agreement") with STADIO to participate, through a wholly-owned special purpose vehicle ("Brimstone SPV"), in a private placement of STADIO ordinary no par value shares ("STADIO Shares") ("the B-BBEE Transaction").

The B-BBEE Transaction will be structured as follows:

• the private placement of STADIO Shares with an aggregate value of R100 million by STADIO with the Brimstone SPV ("the Brimstone Placement"); and
• the private placement of STADIO Shares with an aggregate maximum value of R100 million by STADIO with black people as defined in the Broad-Based Black Economic Empowerment Act, No 53 of 2003, as amended ("Black People") ("the Individual Placement"), which Individual Placement will be fully underwritten by the Brimstone SPV.

The price at which the STADIO Shares will be placed and issued in terms of the B-BBEE Transaction will be the lower of:

• R2.96 per STADIO Share; and
• the volume weighted average price of a STADIO Share for the 30 trading day period immediately following the date of listing of STADIO on the main board of the JSE Limited ("JSE") ("VWAP period"), which is expected to be on Tuesday, 3 October 2017 ("the STADIO Listing Date"), less a 20% discount ("the Discounted Trading Price"). Should the Discounted Trading Price be lower than R2.50 per STADIO Share, the board of directors of STADIO will have the right, in its sole discretion, to decide whether or not to proceed with the B-BBEE Transaction.

The effective date of the B-BBEE Transaction will be the 5th business day after the closing date of the Individual Placement or such other date as advised by STADIO.

Subscription consideration
The total subscription consideration ("Consideration") payable by the Brimstone SPV in terms of the B-BBEE Transaction is as follows:

• R100 million for the Brimstone Placement; and
• up to a maximum of R100 million for the Individual Placement, to the extent that the Individual Placement is not fully subscribed for by Black People.

The Consideration will be settled by the Brimstone SPV from available cash resources.

Conditions precedent
The Agreement is subject to the following conditions precedent:

• that STADIO is listed on the JSE by no later than 13 October 2017, it being recorded that the targeted STADIO Listing Date is 3 October 2017;
• the prospectus to be issued by STADIO for purposes of the Individual Placement is issued no later than 15 November 2017 and will provide for a closing date of the Individual Placement of no later than 1 December 2017; and
• if the Discounted Trading Price is lower than R2.50 per STADIO Share, the board of directors of STADIO confirms in writing by no later than 3 days after the VWAP period ends, that it wishes to proceed with the B-BBEE Transaction.

Value of net assets and profits attributable to the B-BBEE Transaction

It should be noted that there was no activity in STADIO other than an issue of STADIO Shares to Curro for the year ended 31 December 2016, consequently the information below has been based on the value of the B-BBEE Transaction.

The value of the net assets that are the subject of the B-BBEE Transaction is between R100 million and R200 million for the year ended 31 December 2016 as follows:

• R100 million for the Brimstone Placement; and
• between R0 and R100 million for the Individual Placement, with Brimstone's portion being dependent on the extent of the subscription by Black People in the Individual Placement.

It should be noted that Brimstone's investment in STADIO will be accounted for as an investment at fair value through profit or loss on a mark-to-market basis in accordance with International Financial Reporting Standards ("IFRS") at the end of Brimstone's financial reporting period. Had IFRS required the investment to be equity accounted then the profits attributable to the net assets that are the subject of the B-BBEE Transaction could be derived from the pro forma financial information of STADIO for the year ended 31 December 2016 as set out in the pre-listing statement of STADIO which is available electronically at www.stadio.co.za today, 15 September 2017.

The pro forma financial information of STADIO referred to above is based on the audited historical financial information of STADIO for the year ended 31 December 2016, which were prepared in accordance with IFRS.

Categorisation of the B-BBEE Transaction
The B-BBEE Transaction is categorised as a Category 2 transaction in terms of the JSE Listings Requirements.