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AFX - African Oxygen Limited - Announcement relating to the Installation of

Release Date: 04/11/2011 13:28:03      Code(s): AFX
AFX - African Oxygen Limited - Announcement relating to the Installation of     
a 200 ton per day GOX 6000 air separation plant by Afrox                        
African Oxygen Limited                                                          
(Incorporated in the Republic of South Africa)                                  
(Registration number: 1927/000089/06)                                           
ISIN: ZAE000067120                                                              
Share Code: AFX                                                                 
NSX Code: AOX                                                                   
("Afrox" or "the Company")                                                      
SEPARATION PLANT BY AFROX                                                       
1. INTRODUCTION                                                                 
Shareholders are referred to the announcement by Afrox released on SENS on      
4 January 2011 and published in the press on 5 January 2011, wherein the        
Company announced that it had entered into an agreement dated 22 December       
2010 with Linde AG ("Linde"), its controlling shareholder, to acquire           
proprietary technology and equipment for a new GOX 6000 Air Separation          
Plant ("the GOX 6000 Plant") for a cash purchase consideration of               
approximately Euro 10.9 million (or c.R97 million)("the GOX 6000                
Acquisition"). The GOX 6000 Acquisition represented the first phase of the      
Afrox has now commenced with the second phase of the project which entails      
the installation and integration of the GOX 6000 Plant at its Pretoria West     
facility ("the GOX 6000 Installation"). Afrox has concluded agreements with     
Linde, its controlling shareholder, in respect of the GOX 6000                  
Installation. The cash cost of the agreements concluded with Linde is           
approximately Euro 3.9 million (or c.R42.5 million).                            
2. TERMS OF THE GOX 6000 INSTALLATION                                           
The GOX 6000 Installation will take place between 2011 and 2013.                
The integration into product and service lines as well as the civil             
infrastructure will be undertaken internally by Afrox Technical and             
It is estimated that the GOX 6000 Plant will be fully integrated within the     
existing Afrox operations in January 2013.                                      
3. RATIONALE                                                                    
Afrox`s Merchant Gases business supports a well developed industrial            
packaged gases and extended product offering. This business contributes         
substantially to the overall profitability of the Company.                      
The combined transaction, entailing the GOX 6000 Acquisition and the GOX        
6000 Installation, will enable Afrox to substantially enhance its               
production facilities. This will ensure that the Company is well positioned     
to defend and grow Afrox`s market share and brand reputation in the             
Merchant Gases market.                                                          
4. SMALL RELATED PARTY TRANSACTION                                              
Linde currently owns 173,046,413 Afrox shares, comprising 50.47% of the         
share capital of Afrox including treasury shares (or 56.08% excluding           
treasury shares), and is thus the controlling shareholder of Afrox. Linde       
is therefore regarded as a related party to Afrox in terms of the Listings      
Requirements of the JSE Limited and accordingly written confirmation is         
required from an independent professional expert, confirming that the GOX       
6000 Installation is fair to Afrox`s shareholders.                              
Rand Merchant Bank (a division of FirstRand Bank Limited) and Bateman           
Engineering N.V. have been appointed as the joint independent experts           
("Experts"). The Experts have confirmed that the terms of the GOX 6000          
Installation are fair to the Afrox shareholders. The report of the Experts      
will be available for inspection at the registered office of Afrox for a        
period of 28 days from the date of this announcement.                           
The pro forma financial effects of the GOX 6000 Installation on Afrox`s         
earnings per share, headline earnings per share, net asset value per share      
and net tangible asset value per share for the six month period ended 30        
June 2011 are not significant (i.e. are less than 3%), and have therefore       
not been disclosed.                                                             
4 November 2011                                                                 
Joint independent expert and transaction sponsor                                
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Joint independent expert                                                        
Bateman Engineering N.V.                                                        
One Capital                                                                     
Date: 04/11/2011 13:28:03 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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information disseminated through SENS.                                          

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