DALE CAPITAL GROUP LIMITED

B.V.I No: 1443428

Substantial Transaction Circular in relation to:

The disposal of 100 per cent of the issued share capital of South African based Dale Capital Holdings SA (Proprietary) Limited to Broad Reach (Pty) Limited and any loan account due to Dale Capital Group Limited by Dale Capital Holdings SA (Proprietary) Limited for a total consideration of USD 2,596,356 which constitutes a substantial transaction under Chapter 13 of the Listing Rules:

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

For a full appreciation of this Circular, the document should be read in its entirety. If you are in doubt about the action you should take, you should consult your financial adviser, your investment dealer or any other independent adviser immediately.

This Circular is not an invitation to the public to subscribe for shares in Dale Capital Group Limited. The circular has been prepared for the purpose of complying with the Listing Rules, as issued by the Stock Exchange of Mauritius Ltd, more specifically Chapter 13 of the Listing Rules.

9 December 2013

DISCLAIMER OF THE LISTING EXECUTIVE COMMITTEE

AND THE FINANCIAL SERVICES COMMISSION

Neither the Listing Executive Committee (LEC) of the Stock Exchange

Of Mauritius Ltd (SEM), nor the the SEM, nor the Financial Services Commission (FSC)

assume any responsibility for the contents of this document. The LEC, the SEM

and the FSC make no representation as to the accuracy or completeness

of any of the statements made or opinions expressed in this document

and expressly disclaim any liability whatsoever for any loss arising from

or in reliance upon the whole or any part thereof.

1.  DECLARATION BY DIRECTORS

The Circular includes particulars given in compliance with the Stock Exchange of Mauritius Ltd Rules Governing the Official Listing of Securities for the purpose of giving information with regard to the issuer. The Directors, whose names appear below, collectively and individually accept full responsibility for the accuracy and completeness of the information contained in this Circular and confirms having made all reasonable enquiries that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

The Directors further declare that:

·  After due enquiry by them, there have been no material adverse change in the financial or trading position of Dale since the interim accounts as at 13 August 2013, being the last interim accounts published by Dale.

·  In their opinion, the working capital available to DCGL and its subsidiaries is sufficient for the Group’s present requirements, that is, for at least 12 months from the date of issue of this circular.

Norman Theodore Noland ......

Nigel McGowan ......

Sanjeeven Ramasawmy ......

DOCUMENTS AVAILABLE FOR INSPECTION

The original Circular will be available for inspection at the office of Fortenberry Corporate Services Limited,2 River Court, St Denis Street, Port-Louis during normal business hours on any weekday (excluding Saturdays, Sundays and public holidays) from the date of publication of this document up to and including 14 days after publication of notices in the newspaper.

The Following additional documents will be available for inspection;

a)  Audited Financial Statements of Dale Capital Group for the last two years

b)  Articles of Association of Dale Capital Group Limited

c)  Agreement for Sale of DCHSA

d)  Agreement of transaction by Business Rescuer

e)  The original copy of this Circular

The last material contract the Group entered into relates to the disposal of shares in Dale Capital Partners (Mauritius) Limited in July 2011, for which a circular was forwarded to shareholders as the transaction was a disclosable one.

Contents

1. DECLARATION BY DIRECTORS 2

2. LETTER FROM CHAIRMAN 4

3. DEFINITIONS 6

4. INTRODCUTION 7

5. STRATEGIC RATIONALE AND TRANSACTION 7

(a) Rationale and initiation of the Transaction 7

Details of the transaction 8

The Transaction 8

Effective Date 8

The Acquirer 8

Consideration 8

Value of assets realised 9

9

Excess over book value 9

Determination of the value 9

Particulars of the Assets being disposed 9

Impact of Transaction on Dale 9

6. CORPORATE INFORMATION FOR DALE 10

The Company 10

(a) STATEMENT OF DIRECTORS’ INTERESTS 11

Statement of the interests of the directors of Dale Capital Group Limited 11

(b) SUBSTANTIAL INTERESTS IN SHARES AND SHARES IN PUBLIC HANDS 11

(c) Remuneration and benefits of Directors of Dale 11

(d) Contract or arrangements involving directors of Dale 11

(e ) Contract or arrangements involving directors of Dale 11

(f) Abridged Financial Information on Dale 12

7. LITIGATION 14

8. STATEMENT OF INDEBTEDNESS 14

9. CAPITAL REDUCTION . 14

10. ACQUISITION OF KINGDOM BANK AFRICA LIMITED AND FUTURE PROSPECTS AND TRANSACTIONS 15

11. CONCLUSION 16

2.  LETTER FROM CHAIRMAN

Dear Shareholder,

In line with the strategy reported in the past 2 annual reports and via communications in the quarterly reports I confirm that the executive team has continued with the strategy embarked on over the previous three years which was to reduce debt via the sale of assets. Given the huge challenges as a result of illiquidity, the lack of shareholder support to fund investments and operations, together with the challenges of raising new capital, marginal success was achieved towards further debt reduction of all group debt.

The heavy cost of finance and inability to fund cash starved infrastructure and investments resulted in continued reduction in shareholder value. Illiquidity inhibited executives in the implementation of any turnaround plans focused on re-engineering the group strategy back to its historically successful private equity roots which existed prior to the global financial crisis.

The executive team has at all times attempted to keep directors and the majority of shareholders informed about the current and ongoing status of the group.

Illiquidity on the one hand and the worst possible time to sell assets on the other hand, and especially property assets, has created a stressful and difficult environment within which to operate.

I am however pleased to report that in spite of all the difficulties expressed in this letter we have continued in our attempts to identify and evaluate investment and acquisition opportunities. Directors have been determined to stabilize the group via sale of assets, elimination of debt and focus on a strategy geared towards re-structuring the group and providing a platform which would be more attractive to new capital raising and thereafter proceed with carefully screened investment opportunities.

The investment focus and strategy provides for two core investment components:

·  Investment in Banks and Financial Services, and

·  A private equity strategy structured via a Protected Cell Company (PCC), investing in niche areas / market sectors where the group has traditionally been successful prior to the commencement of the global crash in 2008.

·  The sectors are tabled elsewhere in this circular. (also see proposed structure below)

The board now proposes to finally conclude the restructuring process through the elimination of the last highly geared asset Shelley Point Hotel, in settlement of debt, and acquisition of a majority stake in the Bank Sector which will become an “anchor investment” in the group’s portfolio.

These transactions will enable management to give a fresh impetus to the Group’s core strategy and to actively seek out new avenues for development with an agenda of steadily recovering NAV for shareholders as a result of losses during the global recession.

The inherent risks and required working capital of any new strategy is not the subject of this circular and will be properly addressed early in 2014.

·  The Board of Directors of Dale Capital Group Limited is recommending the sale of Dale Capital Holdings (SA) Ltd for USD 2,596,356 with an effective date of 1st November 2013.

·  The Board is also recommending the acquisition of 64.25% of Kingdom Bank Africa Ltd via an issue of 28,000,000 shares in Dale Capital Group at a share price of MUR 3.An Application will be made, to the SEM once approval of the Bank of Botswana is obtained, which is expected to be in January 2014.

The Board of directors has approved the above transactions subject to appropriate shareholder and regulatory approvals. It is to be noted that the directors have obtained the approval of 65 % of Dale Capital Group Limited shareholders to proceed with these transactions.

Shareholders are encouraged to read this entire document, including the risk factors set out in section 10 before deciding how to vote. We recommend the disposal and acquisition.

In conclusion I thank management and staff for loyalty during and extremely difficult 3 year period and encourage shareholders to support management and the group during the recovery cycle.

Thanking you,

Norman Noland

3.  DEFINITIONS

The following definitions apply throughout this document, unless the context requires otherwise:

“Broadreach” or “the Acquirer” Broadreach (Pty) Limited a Company incorporated in the Republic of South Africa carrying registration number 2011/118775/07

“Brotherhood” Brotherhood Holdings Ltd a company established in the British Virgin Islands with registered number 455789;

“Dale” Dale Capital Group Limited, a company incorporated by way of continuation in the British Virgin Islands on 7 November 2007 with registered number 1443428

“Dale Shares” ordinary shares of no par value in the capital of the DCGL;

. “DHCSA” or “Dale Capital Holdings A company incorporated in the Republic of South Africa bearing

SA (Pty) Limited registration number 2006/002653/07.

“Disposal” or “the Disposal” the transaction in which DCGL disposes of 201 issued ordinary shares in the capital of DCHSA representing 100% of the total issued share capital for a total consideration of GBP 1,590,891,426 ( USD 2,596,356) payable by the offset of a debt amounting to USD 2,596,356 due by DCGL to Shelley Point Investment Holdings Limited .

“Directors” the directors of the Company as at the date of this document, whose details are set out on page 7 of this document;

“Group” the remaining businesses of DCGL following the Disposal;

“Official Market” the Official List of the SEM;

“Kingdom” Kingdom Bank Africa Limited, a company incorporated

Or “KBAL” in the Republic of Botswana with registered number1996/10864/07;

“SEM” the Stock Exchange of Mauritius Ltd;

“USD” United States Dollars being the currency of the United States of America;

4.  INTRODUCTION

Dale Capital Group Limited has during the course of this current financial year, which ends on 28 February 2014, been involved in attempts to sell highly geared and non-cash generating investments and then to return to its successful private equity strategy prior to the global crash in 2008. Presenting the company as a Private Equity Investment Holding Company, investing in niche sectors of business in Southern Africa.

As a result of the above Dale Group:

i)  Has placed its main asset, Shelley Point Hotel Spa and Country Club Limited into Business Rescue. This was necessary to avoid liquidation as a result of illiquidity and expensive levels of debt..

ii)  Decided to exit the Les Ecuries Hotel and Beach Club Project in Mauritius.

iii)  After extensive discussions over 2 years directors have successfully concluded agreement to acquire a majority stake in Kingdom Bank Africa Limited which will be settled with new shares in DCGL.

Brotherhood is an investment holding company registered in Guernsey,Channel Islands under company number 455789 and having its administered office at Stenham Trustees Limited in Guernsey. Brotherhood has been involved in raising capital and making private equity investments within the sub-Saharan area since 2000. The company has invested in Zimbabwe, Botswana, and South Africa in the areas of banking, financial services, property, andagriculture (specifically timber estates and timber production). The issued shares of Brotherhood are held by Aldenham Investments Ltd, as a nominee for the Issachar Trust whose settlor is Nigel Muranganwa Kudzayi Chanakira.

Mr Chanakira is an awarding winning businessman based inHarare, Zimbabwe. ThroughBrotherhood, he has been very active in corporate activities within SADC involving banking greenfields, mergers and acquisitions, corporate restructuring and managing business entities.Mr Chanakira brings toDale Capital an extensive global network, deal flow, in-depth experience of conducting business within SADC addition to the Kingdom Bank franchise. Heis best known as a founding partner in greenfield banking and financial services franchises in Zimbabwe, Botswana, Malawi and South Africa together with a recovery operation in Zambia. Mr Chanakira has sold off his commercial banking interests to focus exclusively on private equity and offshore banking throughDale Capital

Under the terms of these transactions Dale will reduce its ownership and related risk in Shelley Point to

Zero.

5.  STRATEGIC RATIONALE AND TRANSACTION

(a)  Rationale and initiation of the Transaction

In numerous announcements to shareholders and the public over the last two years directors have continually announced strategic focus to eliminate all debt, re-structure and then conclude a strategic partnership with the majority owners of Kingdom Bank Africa Limited. The partnership/merger is conditional on the sale of Shelley Point Hotel Spa and Country Club given the heavy interest burden on the Hotel and the continued Liquidity pressures arising from the investment.

The intention in this circular is to outline and announce the steps taken in order to formalise the exit of Shelley Point Hotel. The Key benefits of the disposal of the shares will include;

-  Reduce the gearing of the Listed Company by USD 2,596,356 and the Group by USD 8,889,518

-  Conclude commitments for cash resources available to strengthen and fund new ventures

-  Increased focus on core strategy, as considerable attention has been directed to cope with the illiquidity of the group and challenges which have been continued to impact on directors given the group’s current position.

-  Allow for a leaner Balance Sheet and increase the chances of capital raising.

-  Potentially improve the ability of directors to raise further new capital:

o  to expunge the remaining lower levels of debt post approval of the transactions documented in the circular,

o  To fund group operations.

o  To adequately further capitalise targeted investments in the pipeline including Kingdom Bank Africa Limited. Discussions with foreign based investors have proceeded well and directors hope to conclude commitment to invest in the group as soon as the required approvals have been obtained.