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Aeci Limited - Cautionary Announcement Regarding A Potential Offer To Be Made By

Release Date: 04/09/2003 14:40:27      Code(s): AFE
AECI Limited - Cautionary Announcement regarding a potential offer to be made by
               AECI to acquire the entire issued share capital of Chemical      
               Services Limited                                                 
AECI LIMITED                                                                    
(Incorporated in the Republic of South Africa)                                  
(Registration number 1924/002590/06)                                            
ISIN: ZAE000000220                                                              
Code: AFE                                                                       
("AECI" or  "the Company")                                                      
CAUTIONARY ANNOUNCEMENT REGARDING A POTENTIAL OFFER TO BE MADE BY AECI TO       
ACQUIRE THE ENTIRE ISSUED SHARE CAPITAL OF CHEMICAL SERVICES LIMITED            
1.   INTRODUCTION                                                               
Shareholders in AECI ("Shareholders") are advised that AECI has approached the  
board of directors of Chemical Services Limited ("Chemserve") in connection with
a potential offer to be made by AECI in terms of which it will acquire the      
entire issued share capital of Chemserve which it does not already own (the     
"Potential Offer"). AECI currently holds 74% of the issued share capital of     
Chemserve. It is intended that the Potential Offer will be implemented by way of
a scheme of arrangement (the "scheme") to be proposed by AECI between Chemserve 
and its shareholders in terms of section 311 of the Companies Act, (Act 61 of   
1973) as amended (the "Act"), or if the scheme fails as a result of the non-    
fulfilment of the conditions precedent to which it is subject, by way of a      
general offer in terms of section 440K of the Act.                              
2. PROPOSED TERMS OF THE POTENTIAL OFFER                                        
2.1 The consideration                                                           
In terms of the Potential Offer, AECI is proposing, subject to the fulfilment of
the conditions precedent reflected in paragraph 2.2, a consideration equivalent 
to 95 ordinary shares in AECI ("AECI shares") for every 100 ordinary shares held
in Chemserve. This consideration will be in the form of:                        
*    60 new AECI shares; plus                                                   
*    R 885.15 in cash, (equivalent to 35 AECI shares valued at the volume       
weighted average price for the 27 day trading period prior to 4 September).
2.2 Conditions precedent                                                        
The Potential Offer, if made in terms of the scheme, will be subject, inter     
alia, to the fulfilment or where appropriate, waiver, of the following          
conditions precedent:                                                           
2.2.1 the approval, to the extent necessary, of any regulatory authorities      
     having jurisdiction over AECI and Chemserve in respect of the Potential    
     Offer, including the Securities Regulation Panel ("SRP"), the JSE          
Securities Exchange, South Africa ("JSE") and the Exchange Control Division
     of the South African Reserve Bank;                                         
2.2.2 the JSE granting a listing of the new AECI shares to be issued as part    
     consideration for the Potential Offer;                                     
2.2.3 the High Court of South Africa granting an order convening a meeting (the 
     "scheme meeting") of shareholders of Chemserve at which such shareholders, 
     excluding AECI ("scheme members") will consider and vote on the scheme;    
2.2.4 the scheme being approved at the scheme meeting by a majority representing
not less than three fourths (75%) of the votes exerciseable by the scheme  
     members present and voting either in person or by proxy at the scheme      
     meeting;                                                                   
2.2.5 the High Court sanctioning the scheme; and                                
2.5.6 a certified copy of the Order of Court sanctioning the scheme having been 
     lodged with and registered by, the Registrar of Companies.                 
3. CAUTIONARY AND FURTHER ANNOUNCEMENTS                                         
Shareholders are advised to exercise caution when dealing in the Company"s      
shares until such time as a full announcement is made.                          
Sandton                                                                         
4 September  2003                                                               
Financial adviser and sponsoring broker  to AECI                                
JPMorgan                                                                        
Date: 04/09/2003 02:40:30 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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