In terms of the provisions of section 45(5) of the Companies Act and pursuant to the special resolution passed at the annual general meeting of the company held on 4 May 2016 authorising the board of directors of the company (the “board”) to authorise the company to provide direct or indirect financial assistance in terms of section 45 of the Companies Act by way of loans, guarantees, the provision of security or otherwise, to any of its present or future subsidiaries and/or any other company or corporation that is or becomes related or inter-related to the company for any purpose or in connection with any matter, notification is hereby given by CIG that the board has adopted a resolution in terms of section 45(3)(b) of the Companies Act:
- to authorise CIG to provide a guarantee in favour of The Standard Bank of South Africa Ltd. (acting through its Corporate and Investment division), Standard Chartered Bank, Johannesburg Branch and Standard Chartered Bank (Mauritius) Ltd. (the “finance parties”) in respect of loan and guarantee facilities in an aggregate principal amount of R1.5 billion and USD25.5 million made available by the finance parties to Consolidated Power Projects Group South Africa (Pty) Ltd., Consolidated Power Projects International (Pty) Ltd., Consolidated Power Projects Group Africa (Pty) Ltd. and/or Consolidated Power Projects Procurement International (Pty) Ltd. (being wholly-owned subsidiaries of CIG) (collectively, the “borrowers”), pursuant to all or any finance agreements, as defined in the common terms agreement (the “facilities agreements”), entered into between the company, the borrowers and the finance parties in respect of the obligations of each borrower and of the company under the facilities agreements.
The guarantee constitutes financial assistance in terms of section 45 of the Companies Act, which financial assistance exceeds one-tenth of one percent of the company’s net worth.
In accordance with section 45 of the Companies Act, the board is satisfied and acknowledges, in respect of financial assistance, that:
- immediately after providing the financial assistance, CIG would satisfy the solvency and liquidity test as provided for in section 4 of the Companies Act; and
- the terms under which the financial assistance is to be given are fair and reasonable to CIG.