GREA has visibility for further accretive pipeline development opportunities, most notably with providing the US Government with additional embassy housing across Africa and developing further data centres for leading IT services and solutions providers in select African countries.

APDM renders asset management, advisory and administrative services to GREA pursuant to an asset management and advisory services agreement entered into between GREA and APDM. The APDM team has over 50 years of collective experience in the development of real estate across the African continent in over 40 countries, making it a world-class team backed by extensive experience.

The principal activities of APDM include: (i) considering and, if considered appropriate, making investments within the ambit of GREA's investment charter as agent for and on behalf of GREA; (ii) providing recommendations and advice to the GREA Board with respect to investments and disposals in accordance with the terms of its appointment; (iii) making recommendations to the GREA Board on investment decisions that do not fall within the investment charter; and (iv) monitoring and reporting to GREA shareholders and the GREA Board on the performance of investments.

Upon gaining control, Grit intends to use APDM to provide such development and asset management services to third parties and to further its fee income generating activities as a trusted supplier across the African continent.

Further detailed information on GREA and APDM is set out in Parts III (Business Overview of GREA and APDM) and VII (Financial Information on GREA) of the Prospectus and Circular.

Drive in Trading - update

By virtue of the Grit Group's historic listing on the Johannesburg Stock Exchange, and in conjunction with its largest shareholder, the South African Government Employee Pension Fund ("GEPF") represented by the PIC, the Company facilitated its black economic empowerment and transformation partner, DiT, in the acquisition of 23.25 million Ordinary Shares in June 2017.

DiT secured a loan facility, with an initial break clause on 14 August 2020, from the Bank of America Merrill Lynch ("BoAML") with the PIC providing a guarantee to BoAML in the form of a contingent repurchase obligation ("CRO"). Separately, Grit indemnified the PIC for up to 50 per cent. of any potential losses suffered by PIC, capped at US$17.5 million.

In August 2020, the PIC assumed the position of lender to DiT following the expiry of the initial BoAML loan facility and exercise of the CRO by BoAML. Whilst reserving their rights, the PIC continues to advise Grit that it does not intend calling on the Grit guarantee at this time, giving DiT the opportunity to conclude discussions with further potential lenders.

As at 30 June 2021, the value of the residual exposure is provided for as USD$5.4 million in the Grit 2021 Annual Financial Statements.

Grit and the PIC remain in negotiations and a proposal has been put to the PIC for their consideration. The PIC has advised that it will consult internally about this proposal but that their reply may take some time. A further announcement regarding the DiT arrangements will be made in due course.

Rationale for the Proposed Acquisition

Background

The Grit management team has sought to improve the growth rate of Grit, and specifically views incremental risk mitigated development returns, limited to no greater than 20 per cent. of the Grit Group's gross asset value, as being key to achieving this goal.

Grit's ability to control its own pipeline and fully service its tenants' needs ranging from real estate conceptualisation, development, ownership and property management continues to be a strategic objective of the Company. Although Grit remains confident of delivering superior total returns in the medium to longer term and is well positioned to capitalise on the significant recovery potential across its unique high-quality property portfolio, the Grit Board additionally sees significant further potential value creation through increasing its capital allocation to limited, risk mitigated development returns and would expect these to increase the Grit Group's total targeted shareholder return over time from 12 per cent. to 13 to 15 per cent. per annum*.

*               This is a target only and is not guaranteed. It is based on a number of bases and assumptions which may or may not materialise.

APDM has a team of highly skilled development staff and has the ability to develop in over 15 African countries. With extensive experience delivering projects across the continent, there exists opportunities to provide fee generating professional services to clients external to GREA and to further deliver value to its shareholders.

The Grit Board believes that the Proposed Acquisition therefore brings the following benefits for the Grit Group:

·      GREA is the only development company covering every region in Africa and with a multi asset class focus delivering real estate solutions for international global tenants within Grit's existing and target client lists. Gaining control in one transaction materially accelerates the Grit Group's ability to access development returns from risk mitigated development projects;

·      GREA's existing pipeline is fully funded through the existing shareholders' equity contributions (as well as secured construction debt facilities) and is expected to deliver strong NAV growth as projects are completed over the next 24 to 36 months;

·      GREA has access to an extensive further pipeline of OBO (US diplomatic housing) and data centre development opportunities which are expected to be accretive to NAV, are extremely resilient asset classes and offer exposure to highly rated tenants to underpin future income levels;

·      the Proposed Acquisition cements a key strategic relationship with Africa's largest pension fund, PIC, which has a long-term investment horizon on the continent, as co investor into GREA;

·      acquiring a majority stake in APDM offers Grit the potential for new revenue and fee income streams, asset and facilities management with respect to OBO and other discrete asset classes and accelerates Grit's strategy of increasing its exposure to the provision of professional services to its clients and other third parties;

·      the Proposed Acquisition would further diversify the Grit Group's geographic exposure (and, in particular, will reduce the Company's current overexposure to Mozambique);

·      the transaction builds upon an already close working relationship between the management teams of Grit, GREA and APDM; however significant benefits may arise under a streamlined group structure because of current "duplicate functions" within each business; and

·      debt funding for the Enlarged Group could be further optimized due to increased geographic and sector diversity and balance sheet size.

Acquisition benefits and further opportunities

Upon gaining control of GREA, Grit would have the ability to execute additional value creating activities which include:

·      Grit balance sheet optimisation and disposal of non-core assets

Grit continues to pursue strategies to reduce consolidated exposures to the retail segment and would look to use its greater influence in GREA to push through such asset disposals. Such asset recycling would be expected to free up capital that can be recycled into new project opportunities within GREA. When combined with Grit's balance sheet upon consolidation, GREA's current low leverage is expected to result in a material reduction in consolidated Grit Group LTV metrics from completion of the Proposed Acquisition.

Whilst GREA is expected to remain relatively lowly geared, its construction debt facilities will be amortising and are relatively expensive compared to Grit's debt facilities and a consistent and consolidated Grit Group approach will provide GREA with cheaper debt funding and, crucially, the ability to recycle operational cashflow into new projects rather than debt repayments, thereby securing enhanced levels of growth.

·      Potential for significant Enlarged Group debt restructure

Following completion of the Issue, implementation of the above-mentioned deleveraging strategy and the Proposed Acquisition, the Enlarged Group's combined LTV would reduce significantly. The larger scale and reduced dependence on hospitality and retail, together with a reduced overall exposure to Mozambique, would facilitate the possible issuance of a corporate bond by Grit in the near future, terming out the maturity profile and reducing costs. Grit is exploring, with its advisers, the possibility of effecting such a bond issue following completion of the Proposals.

·      Cost savings

Elimination of dual cost structures and redeploying staff are expected to yield cost savings.

Summary of the principal terms of the Proposed Acquisition

Under the terms of the Proposed Acquisition, Grit will become the holding company of the Enlarged Group, which will include GREA and APDM.

The consideration due to the Selling Shareholders pursuant to the terms of the Share Purchase Agreements may be satisfied by the issue to each Selling Shareholder of such number of New Ordinary Shares at the Issue Price as is equal to the US Dollar amount of the consideration payable to such Selling Shareholder pursuant to the terms of its Share Purchase Agreement. Any New Ordinary Shares issued to Selling Shareholders will be issued at the same price per New Ordinary Share as New Ordinary Shares are issued pursuant to the Open Offer and Placing.

Applications will be made for any New Ordinary Shares issued to any of the Selling Shareholders pursuant to the Share Purchase Agreements to be listed on the premium segment of the Official List and to be admitted to trading on the premium segment of the main market of the LSE, in each case, upon Completion. Such New Ordinary Shares will also be admitted to trading on the SEM.

Certain New Ordinary Shares to be issued to the Selling Shareholders will be subject to lock-up provisions, as more fully described in the summaries of the Share Purchase Agreements in Part IV (Terms of the Proposed Acquisition) of the Prospectus and Circular.

Completion is conditional on, among other things, (i) the approval of the Proposed Acquisition Resolution; and (ii) Admission.

As at 30 June 2021, GREA had unaudited net assets of US$193 million, gross assets of US$199 million and pre-tax profits for the six months ended 30 June 2021 of US$5.7 million. Since that date, GREA has completed and handed over the OBO US Embassy compound in Ethiopia which has therefore increased in value from its construction cost carrying value as at 30 June 2021 of US$34.9 million to a current investment value of US$38.3 million (based on a completion value for 100 per cent. of the asset of US$76.6 million, as shown in Part IX, Section B (Property Valuation Report prepared by Knight Frank LLP in respect of certain assets in the New Portfolio) of the Prospectus and Circular). In addition, GREA has continued with the construction of the six projects shown as "Under Construction" in the GREA projects table above. As at 31 October 2021, the carrying value of these projects had increased in value to US$50.0 million from a carrying value of US$40.3 million as at 30 June 2021.

In the view of the Grit Board, the impact of these developments within GREA's portfolio will be to increase GREA's unaudited net asset value to approximately US$197.2 million by 31 December 2021, the agreed effective date of the Proposed Acquisition. Accordingly, Grit has agreed to purchase an additional 25.78 per cent. of GREA's shares (equal to 50,175,000 GREA Shares) based upon a valuation for 100 per cent. of GREA of US$197.2 million.

In addition, Grit has agreed to purchase 78.95 per cent. of APDM for US$29.8 million, valuing 100 per cent. of APDM at US$37.7 million. This represents a small discount to Grit's internal valuation for APDM of US$38.1 million, with its major assets being a 10 per cent. interest in GREA (valued at US$19.7 million) and its evergreen contract to manage GREA's assets for a fee of 1.5 per cent. of gross asset value, in perpetuity (with an estimated value of US$18.4 million).

Therefore, the aggregate consideration payable by Grit in connection with the acquisition of GREA and APDM is US$80.61 million.

The Grit Board believes that the consideration payable for GREA and APDM is appropriate for the following reasons:

·      as shown in Parts IX (Property Valuation Reports prepared by Knight Frank LLP in relation to certain assets in the Existing Portfolio and in the New Portfolio) and X (Property Valuation Report prepared by REC - Real Estate Consulting, LDA in relation to certain assets in the Existing Portfolio and in the New Portfolio) of the Prospectus and Circular, the GREA Portfolio has a stabilised value following completion of the developments of US$280 million compared to a book value as at 30 June 2021 of US$177 million. Grit is therefore acquiring an attractive and accretive (in the medium term) development portfolio at a valuation that represents a discount of US$103 million to their completed value in circumstances where this completion is fully funded by GREA's existing capital resources and with recourse to only modest levels of leverage;

·      it delivers control of GREA and APDM to Grit;

·      through the acquisition of APDM, Grit is not only getting access to an existing contractual income stream but also a management team with depth of experience in the development of real estate across the African continent, a team which has already proven the value of this expertise through its delivery of projects on behalf of GREA to date; and

·      although there is no committed pipeline beyond the development projects described in the Prospectus and Circular, the APDM team has developed the relationships and credentials to secure potential significant pipeline in the future (both with existing and potentially new tenants), negotiations towards which are ongoing.

Gateway Partners has stated that it wishes to remain invested in the Enlarged Group and has committed to accept, by way of consideration in settlement for the exchange of its shareholding in GREA and APDM, a maximum of 137.5 million New Ordinary Shares, representing an aggregate capital commitment equal to US$71.5 million at the Issue Price. The Grit Board believes that this commitment demonstrates Gateway's faith in GREA and its pipeline and welcomes its continued investment. To the extent that Qualifying Shareholders take up their Open Offer Entitlements in full, then the consideration payable to Gateway may be satisfied in Ordinary Shares from a secondary purchase.

The selected financial information for GREA set out above has been extracted without material adjustment from the unaudited interim financial information of GREA set out in Part VII (Financial Information on GREA) of the Prospectus and Circular.

The Company will announce Completion of the Proposed Acquisition through an RIS and a SEM announcement as soon as practicable following Admission.

Further information about the terms of the Proposed Acquisition is set out in Part IV (Terms of the Proposed Acquisition) of the Prospectus and Circular. The Share Purchase Agreements are inter-conditional and each is subject to the satisfaction or, where applicable, waiver of conditions, including regulatory and competition approvals, the Placing and Open Offer raising a minimum of US$135 million and the passing of the Proposed Acquisition Resolution. There can be no guarantee that the Proposed Acquisition will proceed if all conditions are not satisfied or, where applicable, waived.

The entry by the Company into the Dorado Share Purchase Agreement and GREA Executive Share Trust Share Purchase Agreement each constitutes a smaller related party transaction (as defined in the Listing Rules) by virtue of the direct and indirect interests in GREA and APDM held by Bronwyn Knight (a Director of Grit and a director of Dorado 1 Limited, one of the Selling Shareholders) and Greg Pearson (CEO of GREA (in which Grit owns a 19.98 per cent. interest), a director of several Grit subsidiaries and a director of Dorado 1 Limited) (Bronwyn Knight and Greg Pearson together being the "Interested Parties" and each an "Interested Party" and the Dorado Share Purchase Agreement and the GREA Executive Share Trust Share Purchase Agreement together being the "Interested Party Share Purchase Agreements").

The consideration payable (directly and indirectly) to Bronwyn and Greg pursuant to the Interested Party Share Purchase Agreements is as follows:

Shareholders should note that the consideration payable to them is expected to be satisfied by way of the issue and allotment of such number of New Ordinary Shares at the Issue Price as is equal to the US Dollar amount of the consideration stated above, which Grit intends to facilitate from any New Ordinary Shares that are not taken up by Qualifying Shareholders pursuant to the Open Offer. Such New Ordinary Shares will be subject to lock-up arrangements, as more fully described in paragraph 2 of Part IV (Terms of the Proposed Acquisition) of the Prospectus and Circular.

The fundraising

As stated above, it is possible that the Proposed Acquisition will not complete because the Placing and Open Offer does not raise the necessary fresh equity capital for Grit and therefore the conditions attached to the Proposed Acquisition are not satisfied. Accordingly, Grit has sought and received written confirmations from certain existing Shareholders and new investors of their intention to subscribe pursuant to the Placing and Open Offer (the "Indicated Minimum Proceeds"). These written confirmations, as at the Latest Practicable Date, total in excess of US$65 million. However, the written confirmations do not constitute a legally binding agreement and as such there is a risk that the Indicated Minimum Proceeds are not ultimately received by the Company.

If the Placing and Open Offer only raises US$65 million and the Proposed Acquisition does not proceed, Grit intends to use the net proceeds of the Placing and Open Offer to:

·      make the payment of US$17.9 million for the final capital contributions in respect of GREA's capital call due in December 2021;

·      seek to resolve matters with the PIC regarding the DiT guarantee as set out above, where the net exposure to Grit is US$11 million; and

·      reduce Grit's level of indebtedness.

A fuller breakdown of the use of the net proceeds is set out in paragraph 2 of Part V (The Issue) of the Prospectus and Circular.

However, it is possible that the Placing and Open Offer will not raise Indicated Minimum Proceeds of US$65 million required and therefore neither the Placing and Open Offer nor the Proposed Acquisition will proceed. Grit would then need to pursue alternative actions to rectify its working capital position, including but not limited to the following:

·      Grit would continue its dialogue with PIC in respect of the DiT obligations, and in particular seek continued assurances from PIC that it does not intend calling on the Grit Group guarantee;

·      Grit would seek agreement from GREA to settle the US$17.9 million final capital contribution in respect of GREA's capital call due in December 2021 by way of a transfer of certain property assets, instead of by settlement in cash;

·      Grit would continue to seek to refinance the Grit Group's debt facility due in April 2022 for a net amount of US$47.1 million, for which negotiations are on-going with the relevant lender as well as other potential lenders; and

·      Grit would seek alternative new debt facility and equity fundraising opportunities, for which it has certain on-going discussions with certain potential providers of new debt facilities and/or new equity fundraisings.

Further details on the above alternative actions are set out in paragraph 11.2 of Part XII (Additional Information) of the Prospectus and Circular.

Financial effects of the Proposed Acquisition

Set out in Part VIII (Unaudited Pro Forma Financial Information on the Enlarged Group) of the Prospectus and Circular, the pro forma statement of net assets shows net assets of the Enlarged Group, assuming commitments to subscribe for US$140.0 million under the Open Offer and Placing are received, of US$475.0 million as at 30 June 2021 and the pro forma income statement shows a loss before tax of the Enlarged Group for the period to 30 June 2021 of US$25.6 million. If the Issue is fully subscribed, the pro forma net assets will be US$540.2 million as at 30 June 2021.

Post-acquisition integration

GREA has a strong board and, through APDM, an equally strong executive management team and investment committee comprising individuals with exceptional track records in creating, raising and managing property development and investment companies. This will be supplemented by Grit senior management following completion of the Proposed Acquisition.

The APDM team is led by Chief Executive Officer, Greg Pearson. Greg is a co-founder of Grit and was instrumental in sustaining its rapid growth from its inception in 2014 through to 2018, when he left Grit to focus his attention on GREA. As a founder of Grit, Greg recognised the significant demand from multinational companies looking for quality real estate solutions in Africa and the limited supply of experienced developers to fulfil their requirements, which led to the creation of GREA. Greg has successfully completed a series of developments across the office, retail, leisure, education and healthcare sectors and also sits on the Board of GREA as its sole director and de facto CEO.

Further information on the GREA and APDM management team is contained in paragraph 2.3 of Part III (Business overview of GREA and APDM) of the Prospectus and Circular, and information on the revised senior management team structure and responsibilities at Grit following Completion is set out in Part II (Business Overview of Grit) of the Prospectus and Circular. Shareholders should note that all of APDM's management team and staff will become employees of the Enlarged Group on, essentially, the same employment terms as they currently enjoy at APDM. The consideration payable by Grit to the GREA Executive Share Trust pursuant to the GREA Executive Share Trust Share Purchase Agreement shall be settled by Grit issuing shares in the issued share capital of Grit equal to the amount of the consideration. Such shares are to be retained by the GREA Executive Share Trust, for the benefit of designated participants under a long-term incentive plan, vesting on a future date or earlier if sufficient value is achieved in GREA. Certain participants will also be enrolled to the Grit long-term incentive plan and awarded shares upon the fulfilment of specific key performance indicators.

The Issue

Introduction

The Company is targeting an issue of approximately US$215.6 million (gross) through the issue of 414,647,283 New Ordinary Shares by way of the Open Offer and Placing at US$0.52 per New Ordinary Share.

The Issue Price represents a premium of approximately 4 per cent. to the average closing price across the LSE and SEM for an Ordinary Share on 19 November 2021 (LSE: £0.3468; SEM: US$0.53). The Issue Price has been set by the Directors following their assessment of the prevailing market conditions and anticipated demand for the New Ordinary Shares, as well as taking into account the commercial requirements and positive financial impact on the Grit Group of implementing the deleveraging strategy and undertaking the Proposed Acquisition, as described above. The Grit Board believes that the Issue Price (including the premium) is appropriate in the circumstances.

The actual number of New Ordinary Shares to be issued pursuant to the Issue, and therefore the Gross Issue Proceeds, is not known at the date of the Prospectus and Circular but will be notified by the Company via an RIS and a SEM announcement prior to Admission. Following Admission, the New Ordinary Shares to be issued pursuant to the Issue will rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares by reference to a record date after Admission.

It is important to the Grit Board that Shareholders are given the opportunity to participate in the Issue. Therefore, priority will be given to applications from Qualifying Shareholders under the Open Offer. Thereafter, any New Ordinary Shares not taken up pursuant to Shareholders' applications for their Open Offer Entitlements will be made available to Qualifying Shareholders through the Excess Application Facility, to Placees under the Placing and/or to Selling Shareholders in consideration for Grit's acquisition of their GREA Shares and/or APDM Shares (as applicable) pursuant to the terms of the Share Purchase Agreements.

The Open Offer and Placing are conditional on, inter alia, (a) the Placing and Offer Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms prior to Admission; and (b) Admission occurring by 8.00 a.m. (GMT) on 21 December 2021 or such later time and/or date (being no later than 7 January 2022) as the Company and finnCap may agree). If any such conditions are not satisfied or, if applicable, waived, the Issue will not proceed and application monies will be refunded to the applicants, by cheque (at the applicant's risk), without interest as soon as practicable thereafter.

The Open Offer

The Grit Board is offering Qualifying Shareholders the opportunity to subscribe for New Ordinary Shares on a pre-emptive basis through the Open Offer pro rata to their holdings as at the Record Date at the Issue Price on the basis of 1.3011 New Ordinary Shares for every 1 Existing Ordinary Share held (the "Open Offer Entitlement"). Fractions of New Ordinary Shares will be disregarded in calculating Qualifying Shareholders' Open Offer Entitlements and each Qualifying Shareholder's entitlement to New Ordinary Shares will be rounded down to the nearest whole number.

The Open Offer provides an opportunity for Qualifying Shareholders to participate in the fundraising by subscribing for their respective Open Offer Entitlements. Valid applications under the Open Offer will be satisfied in full up to applicants' Open Offer Entitlements. Qualifying Shareholders who wish to subscribe for more New Ordinary Shares than their Open Offer Entitlement should make an application under the Excess Application Facility.

Any New Ordinary Shares not issued to Qualifying Shareholders to satisfy their Open Offer Entitlements may, at Grit's discretion, be apportioned between those Qualifying Shareholders who have applied under the Excess Application Facility, Placees pursuant to the Placing and/or Selling Shareholders in accordance with the terms of the Share Purchase Agreements. Applications under the Excess Application Facility may be scaled back at the Grit Board's discretion and therefore no assurance can be given that such applications by Qualifying Shareholders will be met in full or in part or at all.

Shareholders should note that the Open Offer is not a rights issue. As such, Qualifying Non-CREST Shareholders should note that their Open Offer Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should further note that, although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, the Open Offer Entitlements and Excess Open Offer Entitlements will not be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

The terms and conditions which apply to the Open Offer are set out in Part XV (Terms and Conditions of Application under the Open Offer) of the Prospectus and Circular.

The Placing

finnCap, Baden Hill and Perigeum Capital have each agreed to use their respective reasonable endeavours to procure subscribers pursuant to the Placing for the New Ordinary Shares on the terms and subject to the conditions set out in Part XIV (Terms and Conditions of Application under the Placing) of the Prospectus and Circular.

The Placing will close at 3.00p.m. (GMT) in the UK / 3.00p.m. (MUT) in Mauritius on 17 December 2021 (or such later date as the Company, finnCap and Baden Hill may agree). If the Placing is extended, the revised timetable will be notified through an RIS.

Commitments under the Placing, once made, may not be withdrawn without the consent of the Grit Board. However, as described above, the allocation of New Ordinary Shares to investors pursuant to the Placing will be at Grit's discretion. Under the Issue, priority will be given to applications for New Ordinary Shares received from Shareholders pursuant to the Open Offer. If 100 per cent. of Qualifying Shareholders elect to take up their Open Offer Entitlement of New Ordinary Shares pursuant to the Open Offer then no New Ordinary Shares will be placed pursuant to applications received in connection with the Placing.

As at the Latest Practicable Date, Grit had already received written confirmation from existing Shareholders and new investors of their intention to subscribe, in aggregate, for in excess of US$65 million pursuant to the Open Offer and Placing (including from certain Shareholders and other investors intending to subscribe for more than 5 per cent. of the maximum amount of the Issue). The Company therefore expects to raise a minimum of approximately US$145.6 million (assuming those indicative commitments are met and the full consideration for the Proposed Acquisition of US$80.6 million is satisfied by the issue of New Ordinary Shares. Dependent upon the level of take up under the Open Offer and the Placing, Grit may raise additional capital up to the maximum amount of the Issue, being approximately US$215.6 million.

The terms and conditions which shall apply to any subscription for New Ordinary Shares procured by finnCap, Baden Hill or Perigeum Capital are set out in Part XIV (Terms and Conditions of Application under the Placing) of the Prospectus and Circular.

Dilution

Assuming 125,000,000 New Ordinary Shares are issued, being the minimum amount to be issued pursuant to the Issue:

·      Qualifying Shareholders who take up their full Open Offer Entitlement (excluding any New Ordinary Shares acquired through the Excess Application Facility) will not suffer any dilution to their ownership and voting interests in the Company by virtue of the issue of New Ordinary Shares pursuant to the Issue; and

·      Qualifying Shareholders who do not take up any of their Open Offer Entitlement and Shareholders who are not eligible to participate in the Open Offer will suffer a maximum dilution of approximately 27.4 per cent. to their ownership and voting interests in the Company by virtue of the issue of New Ordinary Shares pursuant to the Issue.

Assuming that 414,647,283 New Ordinary Shares are issued, being the maximum amount to be issued pursuant to the Issue:

·      Qualifying Shareholders who take up their full Open Offer Entitlement (excluding any New Ordinary Shares acquired through the Excess Application Facility) will not suffer any dilution to their ownership and voting interests in the Company by virtue of the issue of New Ordinary Shares pursuant to the Issue; and

·      Qualifying Shareholders who do not take up any of their Open Offer Entitlement and Shareholders who are not eligible to participate in the Open Offer will suffer a maximum dilution of approximately 55.6 per cent. to their ownership and voting interests in the Company by virtue of the issue of New Ordinary Shares pursuant to the Issue.

Costs and expenses

The total costs, charges and expenses payable by the Company in connection with the Proposed Acquisition, the Issue and Admission are expected to be approximately US$10.4 million. There are no commissions, fees or expenses to be charged to investors by the Company.

Risk factors

Investors should consider fully and carefully the risk factors associated with the Grit Group, the Proposed Acquisition, the New Ordinary Shares, the Issue and Admission, which are set out on pages 11 to 34 of the Prospectus and Circular.

Taxation

Certain information about UK and Mauritius taxation is set out in Part XI (Taxation) of the Prospectus and Circular. Such information is intended only as a general guide to the current UK and Mauritius tax position. If you are in any doubt as to your tax position, or if you are subject to tax in a jurisdiction other than the United Kingdom or Mauritius, you should consult your own independent tax adviser without delay.

General Meeting

As a result of the size of GREA when compared to the Grit Group, the proposed acquisition of an additional 25.78 per cent. shareholding in GREA is classified under Chapter 10 of the Listing Rules as a Class 1 transaction and its implementation requires the approval of Shareholders at the General Meeting. Although the size of APDM when compared to the Grit Group means that the acquisition by Grit of a 78.95 per cent. shareholding in APDM is not a significant transaction for the purposes of the Listing Rules requiring Shareholder approval, as the acquisition of the increased stake in GREA and the stake in APDM are linked transactions, the Board believes it appropriate to enable Shareholders to vote on the transactions taken as a whole. The Grit Board is therefore seeking approval of Shareholders at the General Meeting to approve the Proposed Acquisition.

As the Open Offer is being made to all Shareholders on a proportionate basis to their existing shareholdings and the issue of New Ordinary Shares pursuant to the Placing will only be in respect of any New Ordinary Shares not taken up by Shareholders pursuant to their Open Offer Entitlements, there is no requirement to waive the pre-emption rights in the Articles. Further, there is no requirement from a Guernsey law perspective for Shareholder approval to issue and allot the New Ordinary Shares as the Articles provide the Grit Board with the authority to issue shares at their discretion in such circumstances.

The Proposed Acquisition Resolution seeks approval for the Proposed Acquisition and authorises the Directors to take all steps and enter all agreements and arrangements necessary or appropriate to implement the Proposed Acquisition. In accordance with the Listing Rules, the Proposed Acquisition Resolution will be proposed as an ordinary resolution; requiring a simple majority of votes in favour in order to be passed. The Board has received written confirmations from Shareholders holding, in aggregate, 53 per cent. of the Company's issued share capital as at the date of the Prospectus and Circular, of their intention to vote in favour of the Proposed Acquisition Resolution.

A notice convening a general meeting to be held at 10.00 a.m. (GMT) / 2.00 p.m. (MUT) on 14 December 2021, at which the Proposed Acquisition Resolution will be proposed, is set out at the end of the Prospectus and Circular.

The results of the votes cast at the General Meeting will be announced as soon as possible, once known, through a Regulatory Information Service, and on Grit's website at https://grit.group/regulatory-news- announcements/.com.

Completion of the Proposed Acquisition is conditional, inter alia, on the Proposed Acquisition Resolution being passed.

Further information

Your attention is drawn to the further information set out in the Prospectus and Circular. Shareholders should read all of the information contained in the Prospectus and Circular before deciding on the action to take in relation to the General Meeting.

Recommendation and voting intentions

The Board of Grit considers the Issue, the Proposed Acquisition and the passing of the Proposed Acquisition Resolution to be in the best interests of the Grit Group and its Shareholders as a whole.

As referred to above, under the Listing Rules, Grit's entry into the Interested Party Share Purchase Agreements is classed as a smaller related party transaction under the Listing Rules. The Grit Board, which has been so advised by finnCap, believes that the terms of the Proposed Acquisition and the entry into the Interested Party Share Purchase Agreements are fair and reasonable so far as Shareholders are concerned. finnCap has taken into account the Grit Board's commercial assessment of the effect of the Proposed Acquisition.

Accordingly, the Directors unanimously recommend Shareholders to vote in favour of the Proposed Acquisition Resolution, as those Directors who hold Ordinary Shares intend to do in respect of their own holdings of Ordinary Shares, representing approximately 7.35 per cent. of the Existing Ordinary Shares.

The Board has received written confirmations from Shareholders holding, in aggregate, 53 per cent. of the Company's issued share capital as at the date of the Prospectus and Circular, of their intention to vote in favour of the Proposed Acquisition Resolution.

Expected Timetable

*     Shareholders and prospective investors should note that the Share Purchase Agreements are inter-conditional and are subject to the satisfaction, or waiver, of a number of conditions. There can therefore be no guarantee that the Proposed Acquisition will complete. Subject to the satisfaction or waiver of the conditions, the Proposed Acquisition is expected to complete later than Q4 2021. Accordingly, Admission of those New Ordinary Shares to be issued to the Selling Shareholders will take place subsequent to Admission of those New Ordinary Shares to be issued pursuant to the Open Offer and Placing and an announcement relating to such Admission will be made by the Company through a Regulatory Information Service and a SEM announcement.

The dates and times specified above are subject to change.

SHARE CAPITAL

*     Assuming 414,647,283 New Ordinary Shares are issued in connection with the Proposed Acquisition and pursuant to the Open Offer and Placing and that no additional Ordinary Shares are issued by the Company between the Latest Practicable Date and Completion.

DEALING CODES

Disclaimer 

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the Prospectus to be published by the Company (and in any supplementary prospectus) and not in reliance on this announcement. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company. 

Each of finnCap Limited ("finnCap") and Baden Hill, a trading name of Northland Capital Partners Limited ("Baden Hill") is authorised and regulated in the United Kingdom by the FCA and is acting for the Company and no other person in connection with the matters described in this announcement.  finnCap and Baden Hill will not be responsible to any person other than the Company for providing any of the protections afforded to clients of finnCap or Baden Hill, nor for providing any advice in relation to any matter referred to in this announcement. 

Perigeum Capital Ltd ("Perigeum Capital"), which is regulated in Mauritius by the Mauritian Financial Services Commission, is acting for the Company and no other person in connection with the matters described in this announcement and will not be responsible to any other person for providing the protections afforded to clients of Perigeum Capital or for providing advice in connection with the matters described in this announcement. Perigeum Capital is not responsible for the contents of this document.

The shares of the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 (as amended) (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons absent registration or an exemption from registration under the Securities Act. Moreover, the shares of the Company have not been, nor will they be, registered under the applicable securities laws of Australia, Canada, the Republic of South Africa or Japan. Further, the Company is not, and will not be, registered under the US Investment Company Act of 1940, as amended. The shares of the Company will be offered and sold outside of the United States to non-U.S. Persons in reliance on the exemption from the registration requirements of the Securities Act provided by Regulation S thereunder. The Issue and the distribution of this announcement in certain jurisdictions may be restricted by law and accordingly persons into whose possession this announcement is received are required to inform themselves about and to observe such restrictions.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements. 

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to their respective legal and regulatory obligations (including under the Prospectus Regulation Rules), the Company, finnCap and Baden Hill expressly disclaim any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including FSMA, the Listing Rules, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the UK Prospectus Regulation and the UK Market Abuse Regulation.  

None of the Company, finnCap, Baden Hill, Perigeum Capital or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, finnCap, Baden Hill, Perigeum Capital and their respective affiliates accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith. 

Information to Distributors 

Solely for the purposes of the product governance requirements of Chapter 3 of the PROD Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Chapter 3 of the FCA's Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the market price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, finnCap and Baden Hill will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A of the FCA's Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.