PMEA.L Regulatory News (PMEA)

26 September 2012

PME African Infrastructure Opportunities plc

("PME" or the "Company")

(AIM: PMEA.L)

Posting of Interim Results, Notice of AGM, Circular and Initial Tender Offer Documents

PME African Infrastructure Opportunities plc confirms that a notice convening the Company's Annual General Meeting ("Notice") to be held at 14.00 hours (UK time) on 19 October 2012 at the offices of Galileo Fund Services Limited, Millennium House, 46 Athol Street, Douglas, Isle of Man IM1 1JB, is to be sent to Shareholders today. In addition, the Company's interim results for the six months ended 30 June 2012 ("Interim Results") will also be posted to Shareholders today.

Accompanying the Notice is a circular ("Circular") which sets out the Company's proposals ("Proposals") to amend the Investing Policy (which requires Shareholder approval under the AIM Rules) and to return capital to Shareholders via a series of Tender Offers (which requires approval under the Isle of Man Companies Acts 1931 to 2004 (as amended)).

Background to and reasons for the Proposals

The Company's initial contractual commitment to the Investment Manager was for a five year period which ended in July 2012. During this period, the full amounts raised in the initial public offering were not invested, resulting in disappointing investment returns. Cash has over the period been returned to Shareholders. The Board believes that the Company is now of a size that makes its continued existence uneconomic and no viable alternative investment management options have presented themselves to the Board.

The Board believes that it would be in the best interests of Shareholders for the Company to seek to dispose of its remaining assets in an orderly and timely manner and return the funds to Shareholders.

Management of the Assets and Executive Directors' Remuneration

Following the termination of the contract with the Investment Manager in July 2012, the Company has become self-managed and, as a result, David von Simson, Lawrence Kearns and Paul Macdonald, directors of the Company, have taken on the executive responsibilities. In order to compensate the Executive Directors for their additional services, the Remuneration Committee of the Board has made certain proposals which are put to Shareholders for their approval. Details of these proposals are set out in Appendix 1 below.

Disposals

The Group's portfolio investments were broken down into two broad holdings - the rail interests in South Africa, and the telecommunications investments in Tanzania and Uganda. As was reported in December 2011, the intensely competitive environment for data and voice services prevailing in East Africa led the Investment Manager and the Board to conclude that it was no longer in Shareholders' interests to continue to provide financial support to Dovetel and TMP Uganda.

Accordingly, Dovetel was placed into administration and TMP Uganda into liquidation. On 25 June 2012, the Company received written approval from the High Court for the sale of PME's shareholding in Dovetel to First Seal Co. Limited for a nominal consideration of US$1 in cash. Following the sale which completed on 28 June 2012, the Company has no further funding requirements or obligations with regard to Dovetel.

The Group retains its interest in Peninsula House, in Dar-es-Salaam, Tanzania for which it intends to seek a buyer.

With the closing down and sale of the telecommunications assets, PME is focused on its rail assets in Africa. The rail investments are largely represented by PME Locomotives' ownership of 12* C-30 locomotives as well as the Group's 50 per cent. interest in Sheltam, which leases out these and other locomotives. Activity in the mining and energy sectors in Africa continues to strengthen and Sheltam is one of the leaders in the provision of locomotives and rail maintenance services to the private sector in Africa with a substantial client list. The Board is of the opinion, therefore, that this represents a good time to seek to realise these investments.

* In May 2012, the Company announced that two of its locomotives had been involved in a major incident. The Company is still awaiting the outcome of the insurance assessment which will determine whether or not these two locomotives will be written off.

Tender Offers

Given the developments with Dovetel and TMP Uganda, a significant proportion of the funds that were set aside for future investment into those businesses will no longer need to be deployed for this purpose.

Therefore, the Board is seeking to return surplus capital currently available to Shareholders, with further capital being returned to Shareholders following the Disposals.

The Board has determined that the most efficient manner to return cash to Shareholders is by way of the conditional Tender Offers now being proposed to Shareholders. Under the terms of the proposed Tender Offers, which are conditional, inter alia, upon the passing of Resolution 6 to be proposed at the Annual General Meeting, Shareholders will have the opportunity to tender, in aggregate, all their Ordinary Shares (or any lesser number of Ordinary Shares) for repurchase by the Company.

Under the Initial Tender Offer, Shareholders will be given the Opportunity to tender a portion of their holding on the following basis: up to 30 shares for every 100 shares held.

Change to Investing Policy

The proposed Disposals and Tender Offers will require the Company to amend its Investing Policy to reflect that the Company is no longer investing in assets and, instead, will be winding up its activities over time. The proposed revised Investing Policy of the Company will be as follows:

"The directors of the Company (the "Directors") will seek to realise the remaining assets of the Company at a time and under such conditions as the Directors may determine in order to maximise value on behalf of the shareholders of the Company ("Shareholders") and to return both existing cash reserves and the proceeds of realisation of the remaining assets to Shareholders."

Details of the Tender Offers

The Board is seeking to return surplus capital currently available to the Company to Shareholders, with further capital being returned to Shareholders following the Disposals, by way of the conditional Tender Offers now being proposed to Shareholders. Under the terms of the proposed Tender Offers, Shareholders will, in due course, have the opportunity to tender, in aggregate, all, or substantially all of their Ordinary Shares (or any lesser number of Ordinary Shares) for repurchase by the Company.

The Board now proposes that the Company return up to US$13 million, to Shareholders pursuant to the Initial Tender Offer. This number has been calculated by reference to the NAV per Ordinary Share as at 30 June 2012 of US$0.40. The remaining cash balances of approximately US$1.90 million will be held by the Company to meet the ongoing expenses of the Company.

The Board is, therefore, proposing that the Company should make the Initial Tender Offer, on the terms and subject to the conditions set out in the Tender Offer Documents accompanying this circular, to purchase up to 43,123,426 million Ordinary Shares representing approximately 30.00 per cent. of the Ordinary Shares in issue on 25 September 2012. Once purchased, those Ordinary Shares will be cancelled.

Further details of the Initial Tender Offer, including its terms and conditions, are set out in the Tender Offer Documents accompanying the Circular.

The Board will review on a regular basis the continuing requirements of the Company and the extent to which there is cash in excess of anticipated requirements, in particular following the Disposals, and will seek to return such cash to Shareholders by way of one or more further Tender Offers.

Risks relating to the Tender Offers

In addition to the other information set out in the Circular and the Tender Offer Documents, the risks described below should be carefully considered by Shareholders when deciding what action to take in relation to the Resolutions to be proposed at the AGM.

·; If any Ordinary Shares permitted to be tendered pursuant to the Tender Offers are tendered, the issued share capital of the Company will be reduced and the Company will be smaller. As a result, (i) the fixed costs of the Company would be spread over fewer Ordinary Shares and the Company's total expense ratio may increase; and (ii) the ability to trade Ordinary Shares in the secondary market would be likely to be reduced as the Company becomes smaller through the execution of the Tender Offers.

·; The Tender Offers and the Proposals in general would contribute to increased asset concentration and, therefore, increased portfolio risk. The amount that the Company would be able to return to Shareholders in future would, therefore, be significantly dependent on the performance of a smaller number of investments and the proceeds realised from them.

·; The proceeds of the Tender Offers will be dependent on, amongst other things, the costs of realisation of such of the Company's investments as is necessary to meet the number of Ordinary Shares tendered and the price at which such assets are realised. There can be no assurance as to the value it is possible to realise from the sale of these assets. In particular, there can be no assurance that the Company's full net asset value would be realised by the sale of the Company's assets.

·; If the Initial Tender Offer does not proceed for any reason, the Company would bear costs in relation to the Initial Tender Offer.

·; Although the taxation consequences of the Initial Tender Offer are expected to be as set out in the Tender Offer Documents, such tax treatment may change as a result of changes in the law or HM Revenue & Customs custom and practice.

Recommendation

The Board unanimously considers that approval of the Resolutions is in the best interests of the Company and its Shareholders as a whole. The Board unanimously recommends that Shareholders vote in favour of the Resolutions, as the Directors intend to do in respect of their own beneficial holdings amounting in aggregate to 200,000 Ordinary Shares, representing approximately 0.14 per cent. of the Issued Ordinary Share Capital as at 25 September 2012, being the latest practicable date prior to the posting of this document.

Expected Timetable of Events

All defined terms are as set out in the Circular and Tender Offer Documents to be posted to shareholders, today. Copies of these documents, the Interim Results and this announcement will be available on the Company's website at www.pmeinfrastructure.com.

For further information please contact:

APPENDIX 1

Remuneration Committee Proposal

On 6 July 2012, the Company's existing contract with the Investment Manager for the management of the Company's assets, came to an end. Under the terms of this contract, total payments made by the Company by way of fees and reimbursement of expenses amounted to US$357,326 in the six months to 30 June 2012.

The Board had already concluded that it would put to Shareholders a resolution for a change in the Company's investment policy, so as to concentrate on the disposal of the Company's remaining assets. In the light of this, it did not appear to the Board to be in Shareholders' interests to make further arrangements for the external management of the Company's assets, and deemed it more cost effective for these to be internally managed by the Board.

The Remuneration Committee recognised, however, that the executive roles that would have to be exercised by certain board members, and the responsibilities that they would assume, would require them to devote considerably more time to the Company's affairs than had previously been the case.

Hitherto, Mr von Simson was paid £35,000 per annum as non executive chairman, and Messrs Kearns and Macdonald, £30,000 per annum each. The Remuneration Committee recommended that these salaries be increased to £75,000 per annum each, for so long as they exercised executive functions.

The net increase in cost to the Company, amounting to £130,000 per annum, is considerably less than the equivalent cost of hiring external managers, and therefore represents a net saving to Shareholders. The total remuneration of the Directors would still remain below the cap of £350,000 set out in the Admission Document, and, as such, does not require Shareholder approval. However, the Board has determined that in accordance with good corporate governance, the recommendations of the Remuneration Committee should nevertheless be put to Shareholders for their approval.