Rasmala plc

("Rasmala" or the "Company")

Tender Offer for up to £35 million and publication of circular

Further to the Company's announcement of 26 May 2017, a circular explaining the terms of the tender offer for approximately £35 million (the "Tender Offer") at the Tender Price of 150 pence per Share was posted to Shareholders on 16 October 2017 (the "Circular"). The Tender Offer is expected to close on 6 November 2017. A copy of the Circular is available on the Company's website: www.rasmala.com

The Chairman's Letter in respect of the Tender Offer, as contained in the Circular, is set out below.

Terms used and not defined in this announcement bear the meaning given to them in the Circular published and posted to Shareholders on 16 October 2017.

Dear Shareholder,

Tender Offer by Stockdale Securities Limited to purchase up to 23,334,000 Shares
representing approximately 74 per cent. of the Company's issued share capital
at the Tender Price of 150 pence per Share

1.    Introduction

This letter sets out the background to and reasons for the Tender Offer to purchase Shares.

The Tender Offer is being made available to all Eligible Shareholders who are on the Register at the close of business on 6 November 2017, with the exception of holders in certain overseas jurisdictions. Shareholders can decide whether they want to tender up to their Basic Entitlement together with potential further purchases, depending on the number of Shares tendered by other Eligible Shareholders, at a price of 150 pence per Share, representing a premium of 44.2 per cent. to the closing mid-market price of 104 pence per Share on 24 May 2017, being the last practicable date prior to the publication of the notice of the 2017 annual general meeting of the Company held on 19 June 2017 at which the authority for the Company to make the Tender Offer was approved by special resolution, and a premium of 7.14 per cent. to the closing mid-market price of 140 pence per Share on 13 October 2017, being the last practicable date prior to the publication of this Circular.

The Tender Offer is being made by Stockdale, the Company's corporate broker, as principal on the basis that all Shares that it buys under the Tender Offer will be subsequently repurchased from it by the Company pursuant to the terms of the Repurchase Agreement.

The Board is making no recommendation to Eligible Shareholders in relation to their participation in the Tender Offer. However, Shareholders should note that the following directors of the Board: Zulfi Caar Hydari andH.E. Abdallah Yahya Al-Mouallimi are directors of HIHL which manages HSC3, a shareholder in the Company. Zulfi Caar Hydari and Michael Toxvaerd are the directors of HSC3. HSC3 has confirmed to the Company that it intends to tender its Shares up to its Basic Entitlement.

2.    Background to the Tender Offer

Last year marked the end of the Company's five-year business plan which commenced in 2012 and was focused on restoring the Company as a pioneer and innovator in the Gulf Cooperation Council and Middle East and North Africa markets. As a result of the actions taken over this period, the Directors believe that the Company is in a stronger position to access debt and equity capital for expansion purposes as and when required. This gives the Board more flexibility when considering distributions to shareholders and for this reason the tender offer amount has been set at approximately £35 million. 

Upon completing the Tender Offer (assuming it is fully subscribed) the total amount distributed to Shareholders over the last five years by the Company would amount to an aggregate of approximately £55 million. During the last five years, the Company undertook a major acquisition, restructured the combined business and reduced debt by approximately $45 million.

The Company received Shareholder approval to effect the Capital Reduction at its Annual General Meeting held on 19 June 2017 and court approval for the Capital Reduction was granted on 9 August 2017. The Capital Reduction has created additional distributable reserves of £20 million to enable the Company to buy back its own Shares.

The Board considers that the Tender Offer:

l offers Eligible Shareholders the opportunity to realise some of their investment in the Company;

l provides an opportunity for Eligible Shareholders to tender all, some or none of their Shares depending on their own liquidity requirements and their view on the prospects of the Company going forward; and

l provides a cash return at a time when the Company does not pay annual dividends and there is limited liquidity in the stock which is traded on the AIM market.

The Board confirms that there has been no significant change in the Company's financial or trading position since the publication of the Company's interim results for the period ending 30 June 2017.

3.     The Tender Offer

The Tender Offer is being made by Stockdale to all Eligible Shareholders (other than certain Overseas Shareholders). Full details of the Tender Offer, including the terms and conditions on which it is being made, are set out in Part III of the Circular and, in relation to Eligible Shareholders holding Shares in a certificated form, on the Tender Form to be sent to Eligible Shareholders who hold their Shares in certificated form.

The Tender Offer is conditional upon the satisfaction of the Conditions specified in Part III of the Circular.

The Tender Offer involves the following:

l The Tender Offer is being made to Eligible Shareholders (other than certain Overseas Shareholders) by Stockdale for the purchase of the Tender Offer Shares. Under the Tender Offer, each Eligible Shareholder is entitled to have his or her shareholding purchased by Stockdale at the Tender Price (150 pence per Share) up to that Eligible Shareholder's Basic Entitlement together with potential further purchases depending on the number of Shares tendered by other Eligible Shareholders.

l The Tender Offer is being made at a premium of 44.2 per cent. to the closing mid-market price on 24 May 2017 being the date when the intention to carry out the Tender Offer was announced and at a premium of 7.14 per cent. to the closing mid-market price on 13 October 2017, being the last practicable date prior to the publication of the Circular.

l Eligible Shareholders (other than certain Overseas Shareholders) will be able to decide to tender none, some or all of their Shares within the overall limits of the Tender Offer.

l Tenders in excess of an Eligible Shareholders' Basic Entitlement will only be accepted to the extent that other Eligible Shareholders tender less than their Basic Entitlement or do not tender any Shares.

l All Shares validly tendered by any Eligible Shareholder up to their Basic Entitlement will be accepted in full.

l Eligible Shareholders who hold their Shares in certificated form and wish to tender their Basic Entitlement will need to write 'BASIC ENTITLEMENT' in the spaces provided (Box 3) of the Tender Form. If you hold your Shares in certificated form and have written 'BASIC ENTITLEMENT', the Receiving Agent will calculate your Basic Entitlement on the Record Date. If you wish to tender a different number of Shares to your Basic Entitlement, insert such number of Shares in the spaces provided on the Tender Form (Box 3).

l Eligible Shareholders who hold their Shares in uncertificated form (i.e. in CREST) and who wish to tender their Basic Entitlement should send a TTE instruction through CREST to the member account set out in paragraph 3.3 of Part III of the Circular. The Receiving Agent will calculate your Basic Entitlement on the Record Date and return any excess Shares. If you wish to tender a different number of Shares to your Basic Entitlement, you should send a TTE Instruction through CREST to the same member account specifying such number of Shares that you wish to tender.

l If the total number of Shares validly tendered by all Eligible Shareholders equates to a number greater than the Tender Offer Shares, tenders will be accepted in the order set out below:

l all Shares validly tendered by any Eligible Shareholder up to their Basic Entitlement will be accepted in full; and

l all Shares validly tendered by Eligible Shareholders in excess of their Basic Entitlements will be satisfied at the discretion of the Board. The number of Shares to be purchased in the Tender Offer will not, in any event, exceed the Tender Offer Shares.

l The Tender Offer is subject to the Conditions set out in Part III of this Agreement being fulfilled. Following completion of the Tender Offer, the Company's issued share capital will be reduced to 8,107,784 Shares, assuming the Tender Offer is taken up in full.

l All successfully tendered Shares purchased by Stockdale will be repurchased from Stockdale by the Company pursuant to the terms of the Repurchase Agreement and will be immediately cancelled and will not rank for any future dividends.

l There is no guarantee that the Tender Offer will take place. The Tender Offer will not proceed if any of the conditions specified in paragraph 2 of Part III of this document are not satisfied or if it is withdrawn by the Company at any point prior to the announcement of the results of the Tender Offer. The non-fulfillment of the specified conditions would mean that the Tender Offer could not be implemented and that the Company would have to bear the abortive costs of making the Tender Offer.

l Any rights of Eligible Shareholders who choose not to tender their Shares will be unaffected, however, the reduction in the Company's issued share capital may result in a reduction in the liquidity of the Shares on the secondary market.

4.      Taxation

Eligible Shareholders who sell Shares pursuant to the Tender Offer should, subject to the potential application of Chapter 1 of Part 13 ITA 2007 (in respect of individual Shareholders) and Part 15 of CTA 2010 (in respect of corporate Shareholders), be treated as having sold their Shares in the normal way. Shareholders may, depending on their individual circumstances, incur a liability to taxation on capital gains. UK individual and corporate Shareholders should be aware that HMRC may seek to treat part or the whole of the disposal proceeds of their Shares as income under Chapter 1 of Part 13 ITA 2007 and Part 15 of CTA 2010 respectively. Further information on the UK taxation consequences of the Tender Offer is set out in Part IV of the Circular.

Eligible Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser.

5.      Overseas Shareholders

Eligible Shareholders with registered or mailing addresses outside the UK, or who are citizens or nationals of, or resident in, a jurisdiction other than the UK, should read paragraph 9 of Part III of the Circular and the relevant provisions of the Tender Form. It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such holders to complete and return a Tender Form.

6.      Repurchase Agreement

The Company and Stockdale entered into a repurchase agreement on or around the date of the Circular pursuant to which the Company has agreed to purchase from Stockdale, on-market, such number of Shares as Stockdale shall purchase pursuant to the Tender Offer, at an aggregate price equal to the amount paid by Stockdale for the Exit Shares. In acquiring Exit Shares pursuant to valid tenders made in the Tender Offer and in selling such Exit Shares to the Company, Stockdale will act as principal.

The Repurchase Agreement, which is stated not to create a relationship of agency between Stockdale and the Company, is governed by and construed in accordance with English Law.

The Company will also be liable to pay Stockdale's fees, costs and expenses under the terms of Stockdale's engagement by the Company in connection with the Tender Offer.

7.     Authority for Tender Offer

The Tender Offer is being proposed in line with the authority to purchase Shares on-market that was granted by the Shareholders at the Company's 2017 annual general meeting held on 19 June 2017.

8.     Takeover Code

As a public company which has its registered office and place of management and control in the United Kingdom, the Company is subject to the Takeover Code. Under Rule 9 of the Takeover Code, any person who acquires an interest (as such term is defined in the Takeover Code) in shares which, taken together with the shares in which he and persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights in a company which is subject to the Takeover Code is normally required to make a general offer to all of the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with him, is interested in shares which in aggregate carry not less than 30 per cent. but does not hold shares carrying more than 50 per cent. of the voting rights of such a company, a general offer will normally be required if any further interests in shares are acquired by any such person. Such an offer would have to be made in cash at a price not less than the highest price paid by him, or by any member of the group of persons acting in concert with him, for any interest in shares in the company during the 12 months prior to the announcement of the offer.

Under Rule 37.1 of the Takeover Code, when a company purchases its own voting shares, a resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting, or presumed to be acting, in concert is interested will be treated as an acquisition for the purpose of Rule 9. A shareholder not acting in concert with the directors will not normally incur an obligation to make a general offer under Rule 9 if, as a result of the purchase of its own shares by a company, he comes to exceed the percentage limits set out in Rule 9. However, this exception will not normally apply when a shareholder (or any relevant member of a group of persons acting in concert) not acting, or presumed to be acting, in concert with any one or more of the directors has acquired an interest in shares at a time when he had reason to believe that such a purchase of its own shares by the company would take place.

Stockdale will purchase, as principal, voting shares under the Tender Offer which could result in Stockdale acquiring an interest in Shares carrying 50 per cent. or more of the voting rights of the Company. Promptly following such purchase, under the terms of the Repurchase Agreement, Stockdale will sell all the Exit Shares to the Company and the Company will buy and thereafter cancel all such Shares.

Accordingly, a waiver has been obtained from the Panel on Takeovers and Mergers in respect of the application of Rule 9 to the purchase by Stockdale of the voting shares under the Tender Offer.

9.     Action to be taken

The procedure for tendering your Shares depends on whether your Shares are held in certificated form or uncertificated form and is summarised below.

(a)    Shares held in certificated form

Eligible Shareholders who hold Shares in certificated form and who wish to tender any or all of their existing holding of Shares should complete the enclosed Tender Form in accordance with the instructions printed thereon and in Part III of this document and return it by post or by hand (during normal business hours only) to the Receiving Agent, Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. A pre-paid envelope is enclosed for this purpose for holders in the UK only. Shareholders who hold their Shares in certificated form should also return their share certificate(s) and/or other document(s) of title in respect of the Shares tendered. Tender Forms and share certificate(s) and/or other document(s) of title must be received by the Receiving Agent as soon as possible but in any event by no later than 1.00 p.m. on 6 November 2017.

(b)    Shares held in uncertificated form

Eligible Shareholders who hold their Shares in uncertificated form (i.e. in CREST) and who wish to tender any or all of their Shares should tender electronically through CREST so that the TTE instruction settles by no later than 1.00 p.m. on 6 November 2017. Further details of the procedures for tendering and settlement are set out in Part III of this document.

Eligible Shareholders who do not wish to sell any Shares under the Tender Offer do not need to take any action, either in relation to the Tender Form or the sending of a TTE Instruction.

Eligible Shareholders are reminded that the Tender Offer is not being made to certain Overseas Shareholders.

10. Recommendation

The Directors make no recommendations to Eligible Shareholders in relation to participation in the Tender Offer.

In each case acceptance by Stockdale of an application under the Tender Offer in excess of an applicant's Basic Entitlement is subject to there being capacity to purchase those Shares in accordance with the terms of the Tender Offer.

Whether or not Eligible Shareholders decide to tender all or any of their Shares will depend on, among other things, their view of the Company's prospects and their own individual circumstances, including their tax position.

Enquiries:

EXPECTED TIMETABLE

Announcement of the Tender Offer and date of the Circular                                             16 October 2017

Tender Offer opens                                                                                                      16 October 2017

Closing Date - latest time and date for receipt of Tender Forms                   1.00 p.m. on 6 November 2017

and settlement of TTE Instruction(s)

Record Date for the Tender Offer                                                    close of business on 6 November 2017

Result of Tender Offer announced                                                                                 7 November 2017

Completion of purchase of Shares under the Tender Offer                                               8 November 2017

Despatch of cheques for Tender Offer consideration in respect of                                   15 November 2017

certificated Shares sold under the Tender Offer and any balance
certificates in respect of any unsold certificated Shares

CREST accounts credited with Tender Offer consideration and any                               15 November 2017

unsold uncertificated Shares

CREST Accounts credited with unsuccessfully tendered shares                                by 22 November 2017

Balance certificates despatched in respect of certificated                                          by 22 November 2017

Shares and any unsuccessfully certificated Shares

The above times and/or dates are indicative only and may change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Eligible Shareholders by announcement through a Regulatory Information Service.

All references to times in this document are to London times unless otherwise stated.