BFG Disclosure notice relating to share buyback S.62

DISCLOSURE DOCUMENT RELATING TO OFFER TO BUYBACK SHARES IN THE COMPANY TO: The Shareholders of the Company Introduction Burger Fuel Group Limited (BFG or the Company) is required to provide this Disclosure Document to all shareholders in accordance with the requirements set out in section 62 of the Companies Act 1993 (Act). This Disclosure Document sets out the details of the Company's intention to make an offer to acquire a total of 3,333,332 fully paid ordinary shares in the Company from Mason Roberts Holdings Limited (MRHL) in connection with the Settlement Terms (as further described below). Settlement Terms On 23 October 2020 BFG entered into settlement arrangements with, amongst others, Christopher Mason in relation to all outstanding issues between Christopher Mason (and his associated entities) and the Company (and its subsidiaries) (Settlement Terms). The Settlement Terms resolve all outstanding disputes between the parties, the resolution of which now allows the Company to consider and pursue opportunities identified under its strategic review without the cost and distraction of dealing with those disputes. One of the key provisions of the Settlement Terms include the Company agreeing to acquire a total of 3,333,332 fully paid ordinary shares in the Company held by MRHL that are beneficially owned by the Mason Family Trust (as further described under the heading 'Nature and terms of the Buyback Offers' of this Disclosure Document). Further information regarding the settlement can be found in BFG's announcement dated the same date as this Disclosure Document (as released through NZX's market announcement platform). Nature and terms of the Buyback Offers In accordance with the Settlement Terms the board of directors of the Company (Board) has resolved to offer to acquire a total of 3,333,332 fully paid ordinary shares in the Company held by MRHL, solely from the portion of the Company's shares that are held by MRHL for (and beneficially owned by) the Mason Family Trust, as follows: (a) 1,538,461 fully paid ordinary shares in the Company for no cash payment (but attributing a nominal value of NZ$0.39 per share to settle the debt claimed to be owing to the Company and its subsidiaries, at an agreed settlement amount of NZ$600,000.00); and (b) 1,794,871 fully paid ordinary shares in the Company for consideration of NZ$0.39 per share for a total cash payment of NZ$700,000.00, (together, the Buyback Offers). The Buyback Offers will be made not less than 10 working days and not more than 12 months after this Disclosure Document has been sent to each shareholder of the Company. Under the Settlement Terms Christopher Mason has agreed to procure that MRHL accept the Buyback Offers in full. The shares acquired by the Company in connection with the Buyback Offers will be immediately cancelled as contemplated by section 66(1) of the Act, reducing the total number of BFG shares on issue from 53,670,195 to 50,336,863 (provided the offer is fully accepted). Interest of directors of the Company in the Buyback Offers Josef Roberts (a director of the Company) has an interest in the shares that are the subject of the Buyback Offers, by reason of being the sole director of MRHL (the registered holder (and bare trustee) of the shares the subject of the Buyback Offers). As an "interested" director of the Company Josef Roberts has abstained from voting on the Board resolutions to approve the Buyback Offers. Josef Roberts however has no beneficial interest in the shares the subject of the Buyback Offers. Board Resolutions The text of the Board resolutions in terms of section 61 of the Act, dated 22 October 2020 reads as follows: 1. Pursuant to section 60(1)(b)(ii) of the Companies Act, clause 7 of the Constitution and NZX Listing Rule 4.14.1(b)(ii) (including in reliance on the agreed waiver from NZX regulation from NZX Listing Rule 4.14.1(b)(ii)(A), to be released on or about the date that the Company enters into the settlement arrangements) the Company offer to acquire fully paid ordinary shares in the Company from MRHL, solely from the portion of the Company's shares that are held for (and beneficially owned by) the Mason Family Trust, as follows: (a) 1,538,461 fully paid ordinary shares in the Company for no cash payment (but attributing a nominal value of NZ$0.39 per share to settle the debt claimed to be owing to the Company and its subsidiaries, at an agreed settlement amount of NZ$600,000.00) (Tranche One); and (b) 1,794,871 fully paid ordinary shares in the Company for consideration of NZ$0.39 per share for a total cash payment of NZ$700,000.00 (Tranche Two), (together, the Buyback Offers). 2. The Buyback Offers are in the best interests of the Company and are of benefit to the remaining shareholders in the Company. 3. The terms of the offer and consideration offered for the shares the subject of the Buyback Offers are fair and reasonable to the Company and to the remaining shareholders in the Company. 4. The reasons for the directors' conclusions are that: (a) the Buyback Offers, are key provisions of the settlement terms between the Company (and its subsidiaries) and Christopher Mason (and his associated entities) which resolve all outstanding disputes between the parties, the resolution of which shall allow the Company to consider and pursue opportunities identified under its strategic review without the cost and distraction of dealing with those disputes; and (b) the Tranche One portion of the Buyback Offers settles an outstanding disputed debt; the Tranche Two portion of the Buyback Offers provides an opportunity for the Company to utilise some of its cash reserves for the acquisition of its shares; and, the cancellation of all shares acquired under the Buyback Offers reduces the total number of the Company's shares on issue thereby increasing each remaining shareholder's proportionate shareholding in the Company. 5. The Board is not aware of any information that will not be disclosed to the shareholders of the Company: (a) which is material to an assessment of the value of the shares the subject of the Buyback Offers; and (b) as a result of which the terms of the offer and consideration offered for the shares the subject of the Buyback Offers would be unfair to shareholders accepting the offer. 6. The Board is satisfied on reasonable grounds that the Company will, immediately after completion of the Buyback Offers, satisfy the solvency test as defined by sections 4 and 52 of the Companies Act. The grounds for this conclusion are that immediately after completion of the Buyback Offers, the Company will be able to pay its debts as they become due in the normal manner and the value of the Company's assets will exceed the value of the Company's liabilities, having regard to: (a) the most recent financial statements of the Company for the year ended 31 March 2020; (b) the accounting records of the Company; and (c) all other circumstances that the directors know or ought to know affect, or may affect, the value of the Company's liabilities, including its contingent liabilities, and, for the purposes of section 52 of the Companies Act, the directors will sign a certificate confirming the same. 7. In accordance with section 61(6) of the Companies Act, the offer made in connection with the proposed Buyback Offers will occur not less than 10 working days and not more than 12 months after a copy of the attached draft disclosure document required by section 61(5) of the Companies Act has been sent to each shareholder of the Company. 8. The shares acquired by the Company in accordance with these resolutions will be cancelled as contemplated by section 66(1) of the Companies Act and the share register of the Company updated accordingly. 9. The Company shall send to each shareholder a disclosure document in relation to the Buyback Offers in accordance with section 62 of the Companies Act. 10. Any director of the Company is authorised to approve and sign any document, give any notice or other communication, or take any action, on behalf of the Company that is required or is desirable in connection with the Buyback Offers and any of the other matters referred to in these resolutions. NZX Waiver from Listing Rule 4.14.1(b)(ii)(A) Josef Roberts is the sole director of MRHL and therefore MRHL is an "Associated Person" (as defined in the NZX Listing Rules) of Josef Roberts. Josef Roberts is also a director of BFG. BFG has obtained a waiver from NZX Listing Rule 4.14.1(b)(ii)(A) dated 23 October 2020 in relation to the Buyback Offers to the extent that such rule prohibits BFG from making an offer to acquire its own shares from an "Associated Person" of one of its Directors (being MRHL) (NZX Waiver). A copy of the NZX Waiver can be found on the NZX's market announcement platform in BFG's announcement page. If you have any questions regarding this Disclosure Document please contact BFG's Company Secretary Mark Piet at Mark.Piet@Burgerfuel.com. Mark Piet Company Secretary Burger Fuel Group Limited 23 October 2020 End CA:00361994 For:BFG Type:CORPACT Time:2020-10-23 12:32:47