Remgro Limited

September 26, 2022

Decision

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- relief from prospectus requirements to allow South African company to distribute shares of another South African entity to shareholders of the company on a pro rata basis and by way of a dividend in specie -- distribution not covered by legislative exemptions -- company is a public company in South Africa but is not a reporting issuer in Canada -- company has a de minimis presence in Canada -- no investment decision required from Canadian shareholders in order to receive distributions.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 53 and 74(1).

September 26, 2022

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF REMGRO LIMITED (the Filer)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) for an exemption (the Exemption Sought) from the prospectus requirement of section 53 of the Securities Act (Ontario) in connection with the proposed distribution (the Distribution) by the Filer of all of the ordinary shares (the GND Shares) of Grindrod Limited (GND) held by the Filer by way of a dividend in specie on a pro rata basis to holders (Filer Shareholders) of ordinary shares and Class B ordinary shares of the Filer (collectively, Filer Shares) resident in Canada (Filer Canadian Shareholders).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4.7(1) of Multilateral Instrument 11-102 -- Passport System (MI 11-102) is intended to be relied upon in each of the other provinces and territories of Canada (together with the Jurisdiction, the Jurisdictions).

Interpretation

Terms defined in National Instrument 14-101 -- Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

1. The Filer was incorporated under the laws of the Republic of South Africa on June 12, 1968. The Filer is a diversified investment holding company with investments in, amongst others, the banking, healthcare, consumer products, insurance, industrial, infrastructure and media and sport industries. The Filer's head and registered office is located at Millennia Park, 16 Stellentia Avenue, Stellenbosch, South Africa 7600.

2. The authorized capital of the Filer consists of 1,000,000,000 ordinary shares with no par value per share and 100,000,000 Class B ordinary shares with no par value per share. As of September 13, 2022, there were 529,217,007 ordinary shares issued and outstanding and 39,056,987 Class B ordinary shares issued and outstanding. The only difference between the ordinary shares and the Class B ordinary shares is that the Class B ordinary shares have ten (10) times the voting rights of the ordinary shares. The ordinary shares and the Class B ordinary shares rank pari passu in all other respects, including in respect of dividends. All of the Class B ordinary shares are held by Rupert Beleggings Proprietary Limited.

3. All the ordinary shares of the Filer (but not the Class B ordinary shares) are listed on the Johannesburg Stock Exchange (JSE), with a secondary listing on the A2X Markets Exchange (A2X). Other than the foregoing listings on the JSE and A2X, no securities of the Filer are listed or posted for trading on any other exchange or market in Canada or outside of Canada. The Filer is not a reporting issuer, and has no intention of becoming a reporting issuer, in any jurisdiction of Canada.

4. Pursuant to the listings requirements of the JSE (and the analogous requirements of the A2X), the South African Companies Act No. 71 of 2008 and the Financial Markets Act No. 19 of 2012, the Filer is subject to regular filing and reporting requirements in South Africa, including the publication of interim and annual audited financial statements, the announcement of any material transactions, the announcement of dividend declarations, the announcement of changes in the Filer's board of directors and the announcement of dealing in Filer Shares by its directors.

5. According to an analysis of the combined securities register of the Filer, which register is maintained by and was received from Computershare Investor Services (Proprietary) Limited (the Filer's transfer secretaries) ("Computershare"), as at August 26, 2022, there were three (3) registered Filer Canadian Shareholders and seven (7) beneficial Filer Canadian Shareholders holding 77,521 ordinary shares in the aggregate, representing approximately 0.01% of the outstanding ordinary shares of the Filer.

6. Based on the information in representation 5, the number of Filer Canadian Shareholders and the proportion of Filer Shares held by such shareholders, arede minimis.

7. Prior to the Distribution, the Filer will announce that, subject to applicable law and certain exceptions with respect to fractional shares, as described below, and any jurisdictions where the distribution is illegal, the Filer intends to distribute all of the GND Shares owned by it on apro rata basis and by way of a special dividend in specie, to the Filer Shareholders as of a record date expected to be on or about October 14, 2022. The Distribution is expected to occur on Monday, 17 October 2022.

8. GND incorporated under the laws of the Republic of South Africa in 1910. GND is a diversified logistics company. GND's head and registered office is located at Grindrod Mews, 106 Margaret Mncadi Avenue, Durban, South Africa, 4001.

9. GND's authorized capital consists of 2,750,000,000 GND Shares and 20,000,000 preferred shares. As of August 26, 2022, 698,031,586 GND Shares were issued and outstanding, and 7,400,000 preferred shares in GND were issued and outstanding.

10. The GND Shares are listed on the JSE. Other than the foregoing listing on the JSE, no securities of GND are listed or posted for trading on any other exchange or market in Canada or outside of Canada. GND is not a reporting issuer, and has no intention of becoming a reporting issuer, in any jurisdiction of Canada.

11. Pursuant to the listings requirements of the JSE, the South African Companies Act No. 71 of 2008 and the Financial Markets Act No. 19 of 2012, GND is subject to regular filing and reporting requirements in South Africa, including the publication of interim and annual audited financial statements, the announcement of any material transactions, the announcement of dividend declarations, the announcement of changes in its board of directors and the announcement of dealing in its shares by its directors.

12. As of the date hereof, a wholly-owned subsidiary of the Filer holds 173,183,235 GND Shares, representing 24.8% of the issued and outstanding GND Shares. As of the date hereof, the Filer does not directly or indirectly hold any GND Shares, other than those held by its wholly-owned subsidiary.

13. The Filer intends to increase its aggregate holding of GND Shares (counted together with those held by its wholly-owned subsidiary) to 25.0% (as contemplated in paragraph 14 below), and that all of these GND Shares will be the subject of the pro rata distribution described herein.

14. In order to facilitate the Distribution, the Filer and its wholly-owned subsidiary will undertake a series of transactions (the Transactions), pursuant to which the Filer will acquire additional GND Shares in the open market, and the Filer's wholly-owned subsidiary will distribute the GND Shares it holds to the Filer. Following the completion of the Transactions, the Filer shall hold at least 174,507,905 GND Shares, representing 25.0% of the issued and outstanding GND Shares. Thereafter, the Filer shall implement the Distribution.

15. Pursuant to South African law, the Filer will not be required to obtain shareholder approval for the Transactions or the Distribution. The Filer will, however, pursuant to the listings requirements of the JSE, be required to publish an announcement to its shareholders (the Filer Announcement).

16. The Filer Canadian Shareholders who receive the GND Shares pursuant to the Distribution will, by virtue of the Filer Announcement, receive the same information as other Filer Shareholders about the ratio the Filer will use to compute the number of GND Shares distributed per Filer Share, how fractional shares will be treated and the expected tax consequences of the Distribution. The Filer Canadian Shareholders will have access to all disclosure documents of the Filer (the Disclosure Documents) via the Filer's website, as such documents are available to any other Filer Shareholders.

17. Filer Canadian Shareholders who receive GND Shares pursuant to the Distribution will have the benefit of the same rights and remedies in respect of the Disclosure Documents that are available to Filer Shareholders resident in South Africa.

18. The Filer Shareholders will not be required to pay any cash, deliver any other consideration or surrender or exchange their Filer Shares, or take any other action in order to receive the GND Shares in connection with the Distribution. The Distribution will not cancel or affect the number of outstanding Filer Shares and the Filer Shareholders will retain their Filer Share certificates, if any. The Distribution will occur automatically and without any investment decision on the part of the Filer Shareholders.

19. No fractional GND Shares will be distributed in connection with the Distribution. Instead, as soon as practicable after the Distribution, the distribution agent for the Distribution will aggregate all fractional shares into whole GND Shares, sell the whole GND Shares in the open market at prevailing market prices and distribute the net cash proceeds from the sales pro rata to each Filer Shareholder who otherwise would have been entitled to receive a fractional share in the Distribution.

20. According to an analysis of the combined securities register of GND, which register is maintained by and was received from Computershare, as at August 26, 2022, there were 2 (two) beneficial shareholders of GND resident in Canada holding 7,375 GND Shares in aggregate, representing 0.001% of the beneficial shareholders of GND worldwide and 0.001% of the total outstanding GND Shares.

21. After the Distribution, there will be approximately 12 (twelve) beneficial shareholders of GND resident in Canada holding 31,180 GND Shares in aggregate, representing 0.022% of the beneficial shareholders of GND worldwide and 0.004% of the total outstanding GND Shares.

22. Following the completion of the Distribution, Filer Canadian Shareholders who receive GND Shares pursuant to the Distribution, to the extent they continue to hold such shares, will be treated as any other GND Shareholder and will be concurrently sent the same disclosure materials required to be sent under applicable South African laws that GND sends to its shareholders in South Africa.

23. There will be no active trading market for the GND Shares in Canada following the Distribution and none is expected to develop. Consequently, it is expected that any resale of GND Shares distributed in the Distribution will occur through the facilities of the JSE or any other exchange or market outside of Canada on which the GND Shares may be quoted or listed at the time that the trade occurs or to a person or company outside of Canada.

24. The Distribution to Filer Canadian Shareholders would be exempt from the prospectus requirement pursuant to subsection 2.31(2) of National Instrument 45-106 -- Prospectus Exemptions but for the fact that GND is not a reporting issuer under the securities legislation in any jurisdiction of Canada.

25. Neither the Filer nor GND is in default of any of its obligations under the securities legislation of any jurisdiction in Canada.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Exemption Sought is granted on the condition that the first trade in GND Shares acquired pursuant to the Distribution will be deemed to be a distribution unless the conditions in subsection 2.15(2) of National Instrument 45-102 -- Resale of Securities or subsection 2.8 of OSC Rule 72-503 -- Distributions Outside Canada are satisfied.

"Michael Balter"

Manager, Corporate Finance

Ontario Securities Commission

OSC File #: 2022/0415