Update on Legal Proceedings&Financing Requirements

Chagala Group Limited

3 November 2016

This announcement is not an offer of securities for sale, or an offer to buy or subscribe for, directly or indirectly, securities to any person in the United States or any other jurisdiction, including in or into Canada, Japan, South Africa, Switzerland and Australia or any other jurisdiction in which such offer or solicitation is unlawful. This announcement is an advertisement and not a prospectus (or prospectus equivalent document). Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

Update on BVI Legal Proceedings and Financing Requirements

Further to the announcement by Chagala Group Limited (the "Company" or "Chagala") made on 5 October 2016, the Company makes the following announcement regarding its legal proceedings in the British Virgin Islands Commercial Court (the "Court") with TIPP Investments PCC ("TIPP") (the "BVI Proceedings") and its financing requirements.

On 27 October 2016 a hearing in the BVI Proceedings took place, and the Company is awaiting the result of that hearing. The Company remains subject to the injunction granted by the Court on 29 July 2016 and extended on 29 August 2016 and to the further injunction that was granted by the Court on 22 September 2016 in connection with the Company's placing and open offer transaction, which lapsed and was terminated on 29 September 2016.

The Company estimates that the Group requires a minimum amount of US$6.7 million of new financing prior to 1 December 2016 to enable the Group to repay its KZT Bonds when they mature on such date. The Company is currently in advanced discussions with a lender with regard to potentially obtaining new debt financing for the Group. There can be no certainty that the Group will secure such financing or that, if secured, it will be in an amount sufficient to enable the Group to refinance its KZT Bonds. In connection with such potential new debt financing, the Group is planning a refinancing of its existing indebtedness, utilising the proceeds of such new debt financing and a potential placing and open offer transaction, to the extent such a transaction would be permissible under the terms of the existing injunctions.

In connection with its plans for a new placing and open offer transaction, the Company intends to seek clarity from the Court that such a transaction would be permissible under the terms of the existing injunctions. Should the Court confirm that such a transaction is permissible, the Company intends to implement such a transaction as soon as practicable, subject to any directions which the Court may give in relation to such transaction.

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Chagala Group

Chagala is a service company focused on providing long and short term accommodation solutions to domestic and international oil and gas companies developing Kazakhstan's largest hydrocarbon discoveries. With the ownership of hotels, guest houses, serviced apartments, remote site facilities, restaurants and offices in its portfolio, Chagala is well positioned to capitalize on the oil and gas investment being made in Kazakhstan.

Important Notices

This announcement is not an offer of securities for sale in the United States, and is not for publication or distribution, directly or indirectly, in or into the United States of America. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration under the Securities Act. No public offering of securities is being made in the United States.