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AFE/AFEP - AECI Limited - Further cautionary announcement: acquisition by AECI

Release Date: 13/10/2011 10:05:01      Code(s): AFE AFEP
AFE/AFEP - AECI Limited - Further cautionary announcement: acquisition by AECI  
of the KTH Consortium`s 25,1% interest in AECI`S explosives business in exchange
for ordinary shares in AECI                                                     
AECI LIMITED                                                                    
(Incorporated in the Republic of South Africa)                                  
(Registration number 1924/002590/06)                                            
JSE ordinary share code: AFE                                                    
JSE preference share code: AFEP                                                 
JSE ordinary share ISIN: ZAE000000220                                           
JSE preference share ISIN: ZAE000000238                                         
("AECI" or "the Group")                                                         
Shareholders of AECI ("Shareholders") are referred to the cautionary            
announcement released on the Securities Exchange News Service ("SENS") on       
Tuesday, 26 July 2011 and published in the press on Wednesday, 27 July 2011 and 
the subsequent cautionary announcement released on SENS on Tuesday, 6 September 
2011 and published in the press on Wednesday, 7 September 2011 (collectively,   
"the Cautionary Announcements").                                                
The Cautionary Announcements relate to the proposed acquisition by AECI of the  
effective 25,1% equity interest in AECI`s explosives business, AEL Mining       
Services Limited, held by an empowerment consortium led by Kagiso Tiso Holdings 
Proprietary Limited and the Tiso AEL Development Trust, in exchange for the     
issue of 4 678 667 new AECI ordinary shares  ("the proposed KTH Transaction").  
In terms of the Listings Requirements of the JSE Limited ("JSE"), the proposed  
KTH Transaction is deemed a small related party transaction.  AECI has appointed
Ernst & Young Advisory Services Limited ("E&Y") as Independent Professional     
Expert to provide the board of directors of AECI ("the Board") with an opinion  
on the fairness of the proposed KTH Transaction ("Fairness Opinion"). The Board 
expects to receive the Fairness Opinion by the end of October 2011.             
The proposed KTH Transaction remains subject to the fulfilment of a number of   
conditions precedent, including, but not limited to:                            
-    the execution of the definitive transaction agreements;                    
-    obtaining all necessary lender waivers and consents;                       
-    receiving a positive fairness opinion from E&Y;                            
-    the approval of the fairness opinion by the JSE; and                       
-    to the extent necessary, all other regulatory consents and approvals.      
It is expected that the proposed KTH Transaction will be implemented by no later
than Wednesday, 30 November 2011, once all conditions precedent have been       
fulfilled.  Accordingly, Shareholders are advised to continue exercising caution
when dealing in AECI shares until a further announcement in this regard is made.
13 October 2011                                                                 
Investment bank and        Attorneys and tax          Independent expert        
transaction sponsor        advisers                                             
The Standard Bank of                                  Ernst & Young Advisory    
South Africa Limited                                  Services Limited          
                          Webber Wentzel                                        
                          Corporate sponsor                                     

                          Rand Merchant Bank (a                                 
                          division of FirstRand                                 
                          Bank Limited)                                         
Date: 13/10/2011 10:05:01 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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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.                                          

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