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SEKUNJALO - ANNOUNCEMENT Sekunjalo Investments Limited (Incorporated in the Republic of South Africa) (Registration Number 1996/006093/06) Share Code : SKJ ISIN Code : ZAE000017893 ("Sekunjalo" or "the company") * UPDATE ON RESTRUCTURING OF THE SEKUNJALO GROUP * INCREASE OF STAKE IN PREMIER FISHING SA (PROPRIETARY) LIMITED * FURTHER CAUTIONARY ANNOUNCEMENT 1. Update on restructuring of the Sekunjalo Group ("the Group") Shareholders are referred to the cautionary announcement dated 5 February 2001 and the various further cautionary announcements published thereafter and are advised that the recapitalisation of the Group will be finalised through a proposed rights offer, the terms of which will be announced in due course. The restructuring of Sekunjalo"s fishing interests is now complete as detailed below. Sekunjalo is currently attending to certain components of Sekunjalo Health Care Limited, its healthcare business and shareholders will be kept informed of any further developments in this regard. 2. Acquisition of additional interest in Premier Fishing Further to the cautionary announcements published on 10 June and 29 July 2003 shareholders are informed that Sekunjalo has increased its effective stake in Premier Fishing SA (Proprietary) Limited ("Premier Fishing") from 56% to 80%, by means of two acquisitions the details of which are set out below. 2.1 The acquisitions Sekunjalo acquired an additional interest of 24% in Premier Fishing by increasing the stake of Sekunjalo Fishing (Proprietary) Limited ("Sekunjalo Fishing"), a wholly-owned subsidiary of Sekunjalo, in Sekfish Investments (Proprietary) Limited ("Sekfish") from 70% to 100% ("the acquisitions"). Sekfish holds an 80% interest in Premier Fishing and a workers" trust holds the remaining 20%. Sekunjalo Fishing acquired 18.5% of Sekfish from the Industrial Development Corporation of South Africa Limited ("IDC") and a further 11.5% from The Skyman Trust ("the acquisitions"). 2.2 Rationale for the acquisitions Sekunjalo, as a premier black economic empowerment company, has built significant value over the past few years in Premier Fishing by strong active management through its previous stake in that company. As a result of the acquisitions Sekunjalo will now be able to unlock this value and that of further developments for its shareholders. Premier Fishing is the only large major black controlled and black managed fishing company in South Africa and a large employer in areas such as the West Coast. It is therefore in a position to extend its engagement of smaller group and individual fishing operations in joint ventures and is a growth platform for further acquisitions in the fishing industry. The current four-year fishing rights allocation has facilitated further capital investment in the business and allowed Premier Fishing to develop a long-term plan for the sustainable utilisation of fishing resources. The strong presence of Premier Fishing in the South and West Coast lobster areas contributes significantly to its export income. Locally Premier Fishing dominates the fish-spread market with its Redro and Pecks Anchovette brands. 2.3 Terms of the acquisitions The acquisitions form part of a R70 million recapitalisation of the Sekunjalo Fishing business by the business banking division of Nedcor Corporate. R12,312 million of the funds injected by Nedcor Corporate will be utilised to purchase the 30% interest in Sekfish. The balance of the funds will be utilised to replace debt provided by the IDC and to provide working capital for Premier Fishing. 2.4 Financial effects Based on the unaudited interim financial information of the company for the 6 months ended 28 February 2003, the pro forma financial effects of the acquisitions on earnings per share, headline earnings per share, net asset value per share and tangible net asset value per share are set out below. These pro forma financial effects have been prepared for illustrative purposes only and because of its nature, may not give a true picture of the company"s financial position or results of operations. Before After % change Earnings per share 1.51 2.48 64 Headline earnings per 2.03 3.56 75 share Net asset value per share 0.09 0.09 - Tangible net asset value (0.56) (0.77) (37) per share(3) Notes: 1. The "before" financial effects is based on the published unaudited interim results of the group for the six months ended 28 February 2003. 2. The "after" pro forma financial effects have been prepared as if the acquisitions took place on 1 September 2002. 3. Due to the debt funding being used to increase the equity stake in Premier Fishing, the transaction effect reflects a decrease in tangible net asset value as the value of the investment has not been revalued on the balance sheet. 2.5 Condition precedent In terms of the aggregation rules contained in the Listings Requirements of the JSE Securities Exchange South Africa ("JSE") the acquisition of the further interest in Sekfish from The Skyman Trust constitutes a category 1 transaction and is subject to the approval thereof by the shareholders of Sekunjalo in general meeting. 3. General meeting and Documentation A circular, which is subject to the approval of the JSE, containing full details of a rights offer and the acquisitions and incorporating a notice convening a general meeting of Sekunjalo shareholders to approve the rights offer and the acquisition of the interest of The Skyman Trust (`the circular") is in the course of preparation and will be posted to Sekunjalo shareholders in due course. Shareholders are further advised that shareholders controlling 75% of the votes in Sekunjalo have given an irrevocable undertaking to vote in favour of the acquisitions at the general meeting. 4. Further cautionary announcement As stated above shareholders are informed that the company is currently finalising the terms of a rights offer. This may have an effect on the price at which Sekunjalo shares trade on the JSE and shareholders are therefore advised to continue to exercise caution when dealing in their Sekunjalo shares until a detailed announcement is made. Cape Town 27 August 2003 Corporate Advisor Attorneys and Sponsor Mallinicks Sasfin Attorneys Corporate Finance A division of Sasfin Bank Limited Date: 28/08/2003 03:53:35 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
