SAC.L Regulatory News (SAC)

SACOIL HOLDINGS LIMITED

(Incorporated in the Republic of South Africa)

(Registration number 1993/000460/06)

JSE share code: SCL AIM share code: SAC

ISIN: ZAE000127460

("SacOil" or the "Company")

Conversion of the Gairloch debt to equity

Capital raising of up to R570 million by way of a renounceable rights offer

Further shareholder update and cautionary announcement

1. Introduction

SacOil, the African independent upstream oil and gas company, is pleased to announce that it has concluded an agreement dated 12 September 2013 (the "Gairloch Agreement") with Gairloch Limited ("Gairloch") for the conversion of circa US$24.1 million (circa R238.5 million) of debt and accrued interest provided by Gairloch to equity in SacOilby no later than 31 January 2014 (the "Specific Issue"). To the extent that the maximum number of shares is issued in terms of the Specific Issue, SacOil shall be largely debt-free, thereby reducing financing costs and significantly improving its balance sheet position.

Furthermore, shareholders are advised that SacOil intends to raise additional capital of up to R570 million by way of a renounceable rights offer of 2,111,111,111 SacOil shares (the "Rights Offer Shares") at an issue price of R0.27 per share (the "Rights Offer"), which will be supported by one of the Company's largest shareholders, the Public Investment Corporation (SOC) Limited (the "PIC") to the extent of circa R329 million.

The Specific Issue and the Rights Offer (the "Transactions") will result in a recapitalisation of the Company enabling it to actively pursue and develop its oil and gas prospects. The Transactions will be inter-conditional.

2. The Specific Issue

SacOil will issue a maximum of 883,449,144 new ordinary shares of no par value (the "Specific Issue Shares") to Westglamry Limited and Newdel Holdings Limited, nominees of Gairloch (collectively the "Nominees"), at a price of R0.27 (circa US$0.0272876) per Share (the "Specific Issue Price"), raising a maximum of R238.5 million (circa US$24.1 million) which will be applied to the satisfaction of SacOil's indebtedness to Gairloch. The Specific Issue Price represents a discount of approximately 4.6% to the 30-day volume weighted average traded price of the SacOil shares on the JSE Limited ("JSE") prior to the suspension of trading of the shares on the JSE and the AIM market ("AIM") of the London Stock Exchange ("LSE") on 31 May 2013.

To the extent that the maximum number of shares is issued in terms of the Specific Issue, and assuming the issue of all the Rights Offer Shares, the Nominees will hold an aggregate 22.38% interest in SacOil. The Nominees are expected to be long-term investors in the Company.

The Gairloch Agreement is subject to the fulfilment of the following conditions precedent by no later than 31 January 2014, or such later date as SacOil and Gairloch may agree to in writing:

a. the approval of the Specific Issue by SacOil's shareholders;

b. the approval of the issue of the requisite number of Specific Issue Shares and Rights Offer Shares (collectively, the "Shares"), to allow for the implementation of the Specific Issue and the Rights Offer, by SacOil's shareholders;

c. the election by SacOil shareholders to subscribe for the Company's Rights Offer Shares for an aggregate subscription consideration of not less than R570 million or the election by the PIC to subscribe for Rights Offer Shares for an aggregate subscription consideration of not less than R329 million and the Company shall have received such subscription consideration;

d. the approval by the JSE and the LSE for the admission of the Shares to trade on the JSE and AlM, respectively;

e. all other regulatory consents and approvals (including, without limitation, the approvals of the Financial Surveillance Department of the South African Reserve Bank) required for the implementation of the Specific Issue;

f. the Company shall have issued Rights Offer Shares to all SacOil shareholders that have elected to subscribe for Rights Offer Shares; and

g. the Company shall have delivered to Gairloch a copy of an ordinary resolution of SacOil shareholders approving the appointment of Gairloch's nominated directors.

3. The Rights Offer

The purpose of the Rights Offer is to raise additional capital in the amount of R570 million to recapitalise the Company, thereby enabling it to actively pursue and develop its oil and gas prospects. Pursuant to the Rights Offer, shareholders will be offered the opportunity to subscribe for Rights Offer Shares pro rata to their existing holdings at a cash issue price of R0.27 per share (the "Rights Offer Price"), being a discount of approximately 4.6% to the 30-day volume weighted average traded price of the SacOil shares on the JSE prior to the suspension of trading of the shares on the JSE and AIM on 31 May 2013 and equivalent to the Specific Issue Price. Shareholders will be invited to apply for excess applications, which excess, to the extent available, will be allocated to applicants in an equitable manner by the directors of SacOil in accordance with the provisions of the JSE Listings Requirements.

SacOil has received an undertaking from the PIC, a 16.64% Shareholder in SacOil, dated 14 August 2013, in which it has irrevocably agreed to support the Rights Offer to the extent of R329,211,713 (the "PIC Undertaking"). In the event that the PIC achieves a shareholding of 35% or more in SacOil post implementation of the Transactions, as a result of it fulfilling its obligations in terms of the PIC Undertaking, a mandatory offer to all shareholders is required in terms of section 123(3) of the Companies Act, No. 71 of 2008 (the "Companies Act") (the "Mandatory Offer"), which is classified as an affected transaction in terms of section 117 of the Companies Act. The Company intends, in terms of regulation 86(4) of the Companies Regulations, 2011, to propose to shareholders a resolution (the "Whitewash Resolution") for the PIC to be exempt from the obligation to make the Mandatory Offer. The PIC shall be excluded from voting on the Whitewash Resolution, which requires the approval of more than 50% of the general voting rights of all issued securities of the Company.

The implementation of the Rights Offer is subject to the fulfilment of the following conditions:

a. the approval of the issue of the Specific Issue Shares and Rights Offer Shares in terms of section 41(3) of the Companies Act, as the voting rights of the Shares to be issued as a result of the Transactions will exceed 30% of the voting rights of all the shares held by SacOil shareholders immediately prior to the implementation of the Transactions;

b. the approval of the Whitewash Resolution by SacOil's shareholders, other than the PIC;

c. the approval by the JSE and LSE for the admission of the Shares for trading on the JSE and AIM respectively;

d. all other regulatory consents and approvals (including, without limitation, the approvals of the Financial Surveillance Department of the South African Reserve Bank and the Takeover Regulation Panel) required for the implementation of the Rights Issue;

e. the approval of the Rights Offer circular by the South African Reserve Bank; and

f. the approval by the JSE of the Rights Offer and all documents ancillary thereto.

4. Documentation and indicative timing

The Specific Issue is classified as a specific issue of shares for cash in terms of the JSE Listings Requirements and, as such, requires the approval of SacOil's shareholders (the "Specific Issue Resolution"). In addition, in terms of section 41(3) of the Companies Act, as SacOil will be issuing shares with voting power exceeding 30% of the voting power of all the Company's shares immediately prior to both the Specific Issue and the Rights Offer, an approval by way of a special resolution is required from the SacOil shareholders (the "Companies Act Resolution").

A circular providing the details of the Specific Issue and the Rights Offer, incorporating a Notice of General Meeting proposing, inter alia, the Specific Issue Resolution, the Companies Act Resolution and the Whitewash Resolution (the "General Meeting Circular") will be issued as soon as practicable, but in any event no later than 60 days following this announcement.

5. Board Sub-Committees

Shareholders are referred to the announcements published on SENS on 31 May 2013, 10 June 2013 and 12 July 2013 regarding the appointment of new non-executive directors to the SacOil board ("Board"). SacOil is pleased to announce the establishment of various Board sub-committees with effect from 24 July 2014, which committees are constituted in accordance with the JSE Listings Requirements, the Companies Act and the King Code of Governance for South Africa 2009. Shareholders are advised of the nature and composition of the Boardsub-committees:

6. Release of Annual Financial Statements

In terms of paragraph 3.16 of the JSE Listings Requirements, the Company is required to distribute its annual financial statements or publish and distribute provisional annual financial statements within 3 months of its financial year-end.

Due to the Board resignations announced on 31 May 2013, the Company no longer had a duly constituted audit committee to consider and recommend for approval, by the Board, the financial results for the year ended 28 February 2013. In addition, as announced on 29 May 2013, shareholders were advised as to the auditorsexpressing material uncertainty regarding SacOil's going concern due to the inability to settle the Gairloch debt and secure funding for future development of the Company and its projects.

Given the appointment of five new non-executive directors to the Board and the appropriate constitution of the audit committee, as well as the proposed recapitalisation of the Company through the implementation of the proposed Transactions, the Company is expected to release the audited financial results for the year ended 28 February 2013 on SENS on or about Monday, 16 September 2013. These results will also be available on the Company's website. The Company is expected to publish the financial results in the press on or about Tuesday, 17 September 2013 and post the financial statements on or about Monday, 23 September 2013.

7. Update on the Suspension and Cautionary Announcement

Shareholders are referred to the announcement dated 31 May 2013 relating to application for the trading of the Company's shares on AIM and the JSE to be suspended pending further appointments to the Board (the "Suspension"). In this regard, as evidenced in this announcement, the Company has made significant progress to enable both the JSE and AIM to consider lifting the Suspension, which is expected to be lifted once the audited financial results for the year ended 28 February 2013 have been posted to shareholders, on or around 23 September 2013. Shareholders will be timeously informed of developments in this regard.

As the pro forma financial effects of the Specific Issue and the Rights Offer have not been published, and as and when the Suspension is lifted, shareholders are advised to exercise caution when dealing in the Company's shares.

12 September 2013

ENDS

Investment Bank, Corporate Advisor and JSE Sponsor

Nedbank Capital, a division of Nedbank Limited

Legal Advisor

Norton Rose Fulbright South Africa

Nominated Adviser and Broker

finnCap Limited