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AFE - AECI Limited - Termination Of Negotiations For The Sale Of Sans Fibres`

Release Date: 29/09/2008 08:00:04      Code(s): AFE
AFE - AECI Limited - Termination Of Negotiations For The Sale Of Sans Fibres`   
                        Nylon Business                                          
AECI LIMITED                                                                    
Incorporated in the Republic of South Africa                                    
(Registration No. 1924/002590/06)                                               
Share code: AFE      ISIN No. ZAE000000220                                      
Shareholders are referred to the SENS announcement published on 7 April 2008    
indicating that AECI had reached agreement, in principle, to sell the nylon     
light decitex (LDI) business of SANS Fibres (Proprietary) Limited ("SANS") to a 
consortium ("the Consortium") comprising mainly the management of SANS, the     
Industrial Development Corporation ("IDC") and a SANS workers` trust.  The sale 
offer was for the entire fibres business situated at Bellville in the Western   
Cape and at Stoneville, North Carolina, USA.                                    
As indicated most recently in AECI`s interim results for the half-year ended 30 
June 2008, released on SENS on 29 July 2008, it was expected that the sale would
be concluded by the end of September 2008.                                      
Since this last announcement, there have been a number of major adverse         
developments in the nylon market that have impacted negatively on the value and 
prospects of the SANS business.  Such developments include increases in raw     
material and other input costs, customers` resistance to higher product prices  
required to offset these increases, and labour unrest at Bellville.             
After much discussion between AECI and the Consortium, the parties have agreed  
that under the present circumstances the envisaged transaction is no longer     
With mutual regret, therefore, the parties have agreed to terminate any further 
discussions regarding the sale of the business.                                 
AECI will, by year-end, re-evaluate all options for the business and will make a
final decision on exiting the nylon LDI business at that time.                  
A due diligence process for the sale of SANS`s polyethylene terephthalate (PET) 
business, also at Bellville, is continuing with the identified potential        
purchasers and it is still expected that finality on exiting this business will 
be achieved by the end of 2008.                                                 
Woodmead, Sandton                                                               
29 September 2008                                                               
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Date: 29/09/2008 08:00:04 Supplied by www.sharenet.co.za                     
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