Benefits of Making Business in Saint Helena | Buy & Sell Business

1. BENEFITS OF MAKING BUSINESS IN SAINT HELENA WWW.MERGERSCORP.COM

2. At MergersCorp M&A International we help our clients confidentially buy and sell privately held businesses, aligning the interests of all parties for mutual success and satisfaction. It is our goal to make the process of either buying a new business or selling your current business as smooth and efficient as possible. We know how important confidentiality is to our sellers and we treat it with the utmost importance. WWW.MERGERSCORP.COM

3. BENEFITS OF MAKING BUSINESS IN SAINT HELENA WWW.MERGERSCORP.COM

4. Country Overview The remote islands of St Helena, Ascension Island and Tristan da Cunha lie in the South Atlantic Ocean, midway between Africa and South America. Though far from each other, they form a single territorial grouping under the sovereignty of the British Crown.Much of their history has been influenced by military and strategic interests. St Helena is probably best known as the island to which French Emperor Napolean Bonaparte was exiled in 1815 after his defeat at the Battle of Waterloo. Its inhabitants, known locally as "Saints", are the descendants of sailors, settlers and slaves. The island's economy is dependent on British grants and remittances from abroad.It is linked to the outside world by a Royal Mail Ship, the St Helena, which makes a five-day journey from Cape Town in South Africa, every three weeks, carrying passengers and supplies,

5. Executive Summary Saint Helena is one of the most remote populated places in the world. The British Government committed to building an airport on Saint Helena in 2005. After more than a decade of delays and construction, a commercial air service to South Africa via Namibia was inaugurated in October of 2017. The weekly service to Saint Helena from Johannesburg via Windhoek in Namibia takes just over six hours (including the refueling stop in Windhoek) and replaces the mail ship that had made a five-day journey to the island every three weeks. The current population of Saint Helena is 6,069 as of Wednesday, January 29, 2020, based on the latest United Nations estimates. Saint Helena population is equivalent to 8.0E- 5% of the total world population.Saint Helena ranks number 229 in the list of countries (and dependencies) by population. The population density in Saint Helena is 16 per Km2.The total land area is 390 Km2.

6. Introduction – Doing business in Saint Helena Established as a statutory body at arm’s length from the St Helena Government, Enterprise St Helena (ESH) is responsible for tourism and the economic development of the island, and is the lead body responsible for promoting and enabling private sector development. ESH is focused on promoting the growth of the economy of St Helena, through the development of existing businesses, and the promotion of the island to new investors and developers. ESH is funded by the Government of St Helena and the United Kingdom Department for International Development (DFID). In accordance with its policy of transparency, ESH publishes all of its policies and procedures for the public to view on their website. ESH has 6 key areas of activity in promotion of economic development. These are: •Tourism Promotion •Up-skilling Saints Helping Saint Businesses •Financing Saint Businesses •Attracting Investment •Fisheries Development

7. Conducting business in Saint Helena Limited Liability Companies • Independent legal structures separate from their owners. • Help separate your personal assets from your business debts. • Taxed similarly to a sole proprietorship or a partnership. • No limit to the number of owners. • Not required to hold annual meetings or record minutes. • Governed by operating agreements. Corporations • Independent legal and tax structures separate. • Help separate your personal assets from your business debts. • No limit to the number of shareholders. • Taxed on corporate profits and shareholder dividends. • Must hold annual meetings and record meeting minutes. Partnerships • Partners remain personally liable for lawsuits filed against the business. • Usually no state filing required to form a partnership. • Easy to form and operate.

8. Taxation in Saint Helena The minimum combined 2020 sales tax rate for Saint Helena, California is 8.25%. This is the total of state, county and city sales tax rates. The California sales tax rate is currently 6%. The Napa County sales tax rate is 0.25%. The Saint Helena sales tax rate is 0.5%. Tax delivers real-time sales tax rates and uses advanced technology to map rates to exact address locations. The minimum combined 2020 sales tax rate for Saint Helena Island, South Carolina is 7%. This is the total of state, county and city sales tax rates. Furthermore, whilst the Investment Tax Credit has benefited many big businesses on St Helena it has been questioned whether the Investment Tax Credit is really helping St Helena’s trade balance and whether it is targeting the businesses who can help deliver the SEDP. Businesses have used the Investment Tax Credit to import machines and vehicles and to construct buildings, which has led to money flowing out of the economy. In 2016/17 financial year it was predicted that the cost of the Investment Tax Credit to Corporation and Self- Employment tax was £500K.

9. Trade Saint Helena is the 205th largest export economy in the world. In 2017, Saint Helena exported $18.8M and imported $45M, resulting in a negative trade balance of $26.2M. The top exports of Saint Helena are Crustaceans($7.31M), Non- fillet Frozen Fish ($4.16M), Printed Circuit Boards ($3.06M), Refined Petroleum ($1.56M) and Excavation Machinery ($251k), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($5.06M), Planes, Helicopters, and/or Spacecraft ($4.17M), Iron Structures ($1.58M), Other Plastic Products ($1.4M) and Vehicle Parts ($1.18M). The top export destinations of Saint Helena are the United States ($5.31M), Japan ($4.08M), the Czech Republic ($3.07M), Burma ($1.86M) and Australia($1.19M). The top import origins are South Africa($20.1M), the United Kingdom ($20.1M), Greece ($3M), the United States ($563k) and Australia ($541k).

10. Banking in Saint Helena The Bank of St Helena is a government-owned bank based on the British overseas territory of Saint Helena. It also operates a branch in the dependent territory of Ascension Island. The Government of St. Helena owns 100% of the bank and operates it as a parastatal. The Governor appoints the board of Directors. The bank has a deposits of around SHP 72.7 million. Lending accounts for SHP 13.5 million, and SHP 56.8.5 million is invested. The bank also offers services to tourists and others visiting Saint Helena and Ascension Island. These include currency exchange, encashment of traveller's cheques and providing cash advances on selected credit/debit cards. The bank maintains a relationship with Lloyds Bank, allowing its customers to use their banking network for United Kingdom and international money transmission. The Currency Commissioners, part of the government of Saint Helena, issue the island's banknotes and coins. Bank of St Helena is the island's only bank and the island does not have a central bank. The bank sets its own deposit and lending rates. As at May 2011 the ordinary savings rate is 2% and the normal personal lending rate is 7%.

11. Our M&A Process NEGOTIATION & CLOSE POST MERGER INTEGRATION (PMI) INTEGRATION (PMI) POST MERGER TARGET APPRAISAL APPROACH DUE DILIGENCE Key Areas  Target & market analysis;  Initial assessment of synergies & value drivers;  Indicative valuation;  Go or No-Go decision;  Preparation of transaction documents (NDA – Non- disclosure Agreement/LOI- Letter of Intent);  Select Transaction team;  Appoint advisors;  Consider funding ability.  Initial approach letter;  Signing of NDA;  Prepare & share initial information requests;  Formulation of LOI (Letter of Intent) & possible negotiations;  Initial meeting and Q&A;  Circulate information on the Target to the Transaction team.  Set scope of due diligence;  Set up VDR (virtual data room);  Coordinating of due diligence, further meetings and Q&A sessions;  Consider points relevant to the Post-Merger (PMI) phase;  Revisit indicative valuation & prepare detailed valuation based on due diligence findings;  SPA negotiations with the seller;  Development of final structure (share/asset deal) and final valuation;  Approvals;  Signing of SPA & Close.  Consider the extent of integration;  Development of 100 Day PMI Plan;  Consider short & long term objectives;  Estimate requirements to capture synergies;  Determine resource needs & optimal allocation. Parties Involved  CFO;  Head of M&A;  Accountants;  Corporate finance advisors;  Consultants.  Senior management;  CEO, CFO, CTO;  Strategy director;  Head of M&A;  Head of Business Development;  Consultants.  Company general counsel;  Lawyers;  Senior management.  Company general counsel;  Lawyers;  Senior management/HR. 11 © Midaxo 2018 www.midaxo.com

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