ILLOVO SUGAR LIMITED - SALE OF GLEDHOW SUGAR MILL, REFINERY AND CANE GROWING

ILLOVO SUGAR LIMITED - SALE OF GLEDHOW SUGAR MILL, REFINERY AND CANE GROWING    
                       ESTATES TO A BEE COMPANY AND CAUTIONARY ANNOUNCEMENT     
Illovo Sugar Limited                                                            
(Incorporated in the Republic of South Africa)                                  
Company registration number 1906/000622/06                                      
JSE Share Code: ILV                                                             
ISIN: ZAE000003547                                                              
("Illovo Sugar" or "the Group")                                                 
SALE OF GLEDHOW SUGAR MILL, REFINERY AND CANE GROWING ESTATES TO A BEE COMPANY  
AND CAUTIONARY ANNOUNCEMENT                                                     
1.0  Introduction                                                               
Shareholders are advised that Illovo Sugar has entered into a sale         
     agreement with Grand Bridge Trading 40 (Proprietary) Limited, which is a   
     broad-based Black economic empowerment ("BEE") company ("Grand Bridge"), in
     terms of which Illovo Sugar will, subject to a condition precedent, sell   
its interests in the Gledhow sugar mill and refinery and the associated    
     cane growing estates ("Gledhow"), (collectively "the transaction").        
     The transaction will result in a BEE company holding a major sugar asset   
     and will secure BEE participation in the SA sugar milling industry.        
This announcement sets out the salient terms of the transaction and the    
     empowerment initiative as required by the JSE Securities Exchange South    
     Africa ("JSE") Listings Requirements for a transaction of this nature being
     a category three transaction.                                              
2.0  Background And Rationale                                                   
     Illovo Sugar, which is the largest sugar producer in Africa, has an active 
     BEE programme and this transaction is further evidence of its continued    
     efforts to promote sustainable broad-based Black opportunity and           
empowerment.                                                               
     Illovo Sugar is confident that the transaction will grant additional access
     to the sugar industry to a wider section of the community.                 
3.0  Overview Of The Transaction                                                
Grand Bridge will acquire the assets and liabilities of Gledhow, including 
     its associated agricultural properties, from Illovo Sugar as a going       
     concern. The consideration payable is R335 million and will be settled in  
     cash by Grand Bridge utilising a loan from the Land and Agricultural Bank  
of South Africa.  Illovo Sugar intends to utilise the proceeds thereof to  
     strengthen the balance sheet in preparation for future growth.             
     In order to achieve the broad-based empowerment intentions of Illovo Sugar,
     the sale agreement stipulates that :                                       
*    the majority of the shares held by Grand Bridge should be drawn from  
          previously politically disadvantaged persons;                         
     *    equity participation of not less than 20% in Grand Bridge must be held
          by or for the benefit of employees of Grand Bridge;                   
*    the majority of the sugar cane producing agricultural land acquired   
          should be sub-divided into medium and/or small-scale farms and        
          allocated for acquisition by previously politically disadvantaged     
          persons.                                                              
The effective date of the sale is 1 June 2004 and is subject to the        
     approval of the Competition Authority. Shareholders will be advised once   
     this condition precedent is fulfilled.                                     
     Illovo Sugar will continue to manage the business for a period of five     
years from the effective date.                                             
     Other than the above, the sale agreement contains the normal terms,        
     conditions and warranties expected for a transaction of this nature.       
4.0  Financial Information                                                      
Illovo Sugar"s final reporting period closed at the end of March 2004 and  
     the publication of these results is scheduled for 19 May 2004.             
     Consequently, it would not be meaningful to disclose the financial effects 
     of the transaction based on outdated financial information. The financial  
effects of the transaction will be disclosed to shareholders in terms of a 
     subsequent announcement, following the publication of the final results of 
     Illovo Sugar, and will be based on these final results. The financial      
     effects on the earnings of Illovo Sugar are not considered to be material. 
5.0  Information On Grand Bridge                                                
     The major shareholders of Grand Bridge include The Sokhela Family Trust and
     the Gledhow employees, with the balance held by Black community            
     organisations, businesses and individuals.                                 
6.0  Information On Gledhow                                                     
     Gledhow is located on the north coast of KwaZulu-Natal, adjacent to        
     KwaDukuza.                                                                 
     Annually, the mill crushes approximately 1.4 million tons of cane and      
produces around 150 000 tons of sugar, constituting some 6% of South       
     Africa"s annual sugar production and a similar share of the annual sugar   
     output of the Illovo Sugar group.  Utilising additional raw sugar brought  
     in from other sugar factories, the refinery produces about 160 000 tons of 
white sugar per annum which is sold to industrial and consumer markets.    
     The properties include approximately 6 900 hectares cultivated to sugar    
     cane which yields around 300 000 tons of cane per annum.                   
     Currently Gledhow employs 540 people in its agricultural and manufacturing 
operations.                                                                
7.0  Cautionary Announcement                                                    
     On the basis that the financial effects of the transaction are still to be 
     disclosed, shareholders are advised to exercise caution when dealing in the
shares of Illovo Sugar until disclosure in this regard is made.            
Mount Edgecombe                                                                 
17 May 2004                                                                     
Sponsor:                                                                        
Cazenove                                                                        
Date: 17/05/2004 10:00:20 AM Supplied by www.sharenet.co.za                     
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