AEL: ALLIED ELECTRONICS CORPORATION LIMITED - Potential unbundling and separate listing of Altron´s UK subsidiary, Bytes Technology Group Limited and cautionary Potential unbundling and separate listing of Altron´s UK subsidiary, Bytes Technology Group Limited and cautionary ALLIED ELECTRONICS CORPORATION LIMITED (Incorporated in the Republic of South Africa) (Registration number 1947/024583/06) Share code: AEL ISIN: ZAE000191342 ("Altron" or "the Company" or "the Group") Potential unbundling and separate listing of Altron´s United Kingdom ("UK") subsidiary, Bytes Technology Group Limited ("Bytes UK") and cautionary announcement 1 Overview and rationale Shareholders are advised that Altron has recently completed its FY21 annual strategy review. A fundamental and strategic goal of the board of directors of Altron ("the Board") has been, over time, to maximise value for shareholders. This resulted in driving a One Altron strategy, which successfully delivered the disposal of non-core assets, the rationalisation of operations and the execution of targeted acquisitions in high-growth areas. This positioned Altron as a leading IT Services organisation in Africa and achieved a total shareholder return of 26% per annum over three years with the return on capital employed increasing from 6.3% to 20.8% over the same period. As part of its strategic review, the Board assessed each of the business units within Altron, to identify opportunities which have the potential to unlock further value for shareholders and to streamline operations. The Board concluded that the true value of Bytes UK, a wholly-owned subsidiary of Altron, is not reflected in the Company´s share price. This business has increasingly developed a growth trajectory and strategic levers that are different to the rest of the Group and operates in a different geographical capital market with a highly rated peer group. Consequently, the Board has resolved to pursue: - a potential listing and potential share offering of Bytes UK on the London Stock Exchange; - a secondary listing of Bytes UK on the Johannesburg Stock Exchange ("JSE"); and - an unbundling of the remaining Altron shareholding in Bytes UK, post the potential share offering to Altron shareholders (collectively referred to as "the Potential Transaction"). The primary listing of Altron on the Main Board of the JSE will be retained. Whilst the Board is cognisant of the current state of capital markets and the impact of market conditions on the success of the Potential Transaction, the Board has deemed it appropriate to commence with the necessary preparation for the Potential Transaction. This preparation is likely to take between 9 to 12 months to complete. Altron will reassess market conditions post completion of the required preparatory work and, if financial market conditions have not improved, the Board will determine the appropriate way forward for the Potential Transaction. The governance and leadership elements related to the Potential Transaction will commence forthwith, and these will include: - constituting an independent board of directors for Bytes UK; - the separation of Bytes UK from all Group functions; - concluding arrangements with the Bytes UK management team, consistent with an independent company; and - separating all Bytes UK operational functions to ensure a standalone operational business. Altron has appointed Rand Merchant Bank, a division of FirstRand Bank Limited, as Financial Advisor and Transaction Sponsor in respect of the Potential Transaction in South Africa, and is in the process of appointing an advisor in the UK to advise Bytes UK on the potential listing and potential share offering. 2 Overview of Bytes UK Bytes UK is a subsidiary of Altron within the Digital Transformation segment of the Group. Bytes Technology Group was established in the UK in 1982. The business is focused on Software Licensing, Software Asset Management, Security Solutions, Cyber Consulting Services and Public Cloud Migration and Management. The Bytes UK group has over 7500 customers, predominantly in the large to medium enterprise space, and is well-represented in the national and local government sectors. Bytes UK represents over 100 software vendors and have been the recipient of many vendor awards over the years. Bytes UK has 7 Gold and 3 silver accreditations with Microsoft and is currently ranked as Microsoft UK´s number 1 cloud reseller. The existing management team has been responsible for the business for the past 22 years. They have grown Bytes UK into a sizeable, standalone and profitable business, delivering a 10-year CAGR of 20% in Revenue and 24% in Profit before Tax in Pounds. In the 2019 financial year, Bytes UK contributed 41% of Altron revenue and 23% of Altron EBITDA. The strong leadership team is diverse, experienced and well-positioned to take the company forward. The team is fully supportive and see the benefit of the opportunity of operating as a listed stand-alone business in the future. 3 Altron Board´s view of the Potential Transaction Mike Leeming (Chairman) and Mteto Nyati (Chief Executive), on behalf of the Board, indicated in support of the Potential Transaction that, "In addition to the value created to date, through delivering on the One Altron strategy, the unbundling and listing of a fully independent Bytes UK has the potential to unlock further value for Altron shareholders and, at the same time to create, a successful standalone business operating in the UK. In 2019, Altron, excluding the Bytes UK business, achieved revenue of over R9 billion and EBITDA of over R1.2billion and will remain a market-leading and well-positioned business in its chosen African markets." 4 Cautionary If the Potential Transaction is successfully implemented it may have a material effect on the price of the Company's shares. Accordingly, shareholders are advised to exercise caution when dealing in Altron shares until a further announcement is made. This announcement shall not, in any circumstances, be construed as an investment recommendation or as a marketing of securities to the public. The announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities or shares and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction. By order of the Board. To update investors regarding the Potential Transaction, Altron management will be hosting a conference call today at 12:00 SAT (10:00 GMT). Investors who would like to participate need to pre-register by visiting https://www.diamondpass.net/1231251 ahead of the call. A replay will be made available and dial-in details are available on www.altron.com. Johannesburg 2nd April 2020 Financial Advisor and Transaction Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 02-04-2020 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.