Illovo Sugar - Sale of Monitor Sugar Company and withdrawal of cautionary

Illovo Sugar - Sale of Monitor Sugar Company and withdrawal of cautionary       
               announcement                                                     
ILLOVO SUGAR LIMITED                                                            
(Incorporated in the Republic of South Africa)                                  
Company registration number 1906/000622/06                                      
Share Code: ILV                                                                 
ISIN:       ZAE000003547                                                        
("Illovo Sugar" or "the Group")                                                 
Sale of Monitor Sugar Company and withdrawal of cautionary announcement         
1.  Introduction                                                                
Shareholders are advised that Illovo Sugar has entered into a sale agreement    
with Michigan Sugar Company ("the purchaser"), which is a Michigan based        
agricultural cooperative which currently owns 4 sugar factories, in terms of    
which Illovo Sugar will, subject to conditions precedent, sell its 100%         
shareholding in Monitor Sugar Company ("the transaction").                      
This announcement sets out the salient terms of the transaction as required by  
the JSE Securities Exchange South Africa ("JSE") Listings Requirements for a    
transaction of this nature, being a category three transaction.                 
2.  Background and rationale                                                    
Illovo Sugar is the largest sugar producer in Africa and has not obtained its   
desired return on investment from Monitor Sugar Company which is a beet sugar   
producer based in Michigan, USA. Illovo Sugar intends to utilise the proceeds to
strengthen the balance sheet in preparation for future growth.                  
3.  Overview of the transaction                                                 
The purchaser will acquire the 100% shareholding in Monitor Sugar Company from  
Illovo Sugar. The consideration payable is US$ 40 million of which US$ 36       
million will be settled in cash and US$ 4 million by the delivery of a ten year 
promissory note. Illovo Sugar has the obligation to immediately upon receipt of 
the cash settle loans in Monitor Sugar Company amounting to US$ 20 million. In  
addition, Illovo Sugar has the right to participate in future earnings of the   
newly merged entity up to a maximum of US$ 5 million over a ten year period     
commencing 30 September 2005.                                                   
The effective date of the sale is 30 September 2004 and is subject to the       
following conditions precedent which must be completed by 1 September 2004:     
-    approval by the majority of the membership of the purchaser;               
-    equity subscription in the purchaser from growers representing no fewer    
     than 50,000 acres; and                                                     
-    receipt of an irrevocable commitment for firm financing.                   
Shareholders will be advised once the conditions precedent are fulfilled.       
Other than the above, the sale agreement contains the normal terms, conditions  
and warranties expected for a transaction of this nature.                       
4.  Financial effects of the transaction                                        
The proforma financial information has been prepared for illustrative purposes  
only and may not accurately reflect the financial position of Illovo Sugar      
subsequent to the implementation of the transaction. The pro forma financial    
effects of the transaction set out below are based on Illovo Sugar"s audited    
results for the year ended 31 March 2004.                                       
Illovo Sugar results for the year  Audited        Proforma                      
ended 31 March 2004                                                             
                                   Before the     After the                     
                                   Transaction    Transaction   %               
(cents)        (cents)       Change          

Headline earnings per share        76.9           83.0          8               
Earnings per share                 77.8           83.3          8               
Net asset value per share          387.1          312.5         (19)            
Tangible net asset value per share 382.7          308.1         (19)            
Net borrowings (Rand million)      1 366.2        936.4                         
Notes:                                                                          
1.   The headline earnings and earnings per share are calculated using          
historically published information for Illovo Sugar for the year ended 31  
     March 2004 as if the transaction had taken place with effect from 1 April  
     2003.                                                                      
2.   The headline earnings and earnings per share for the year ended 31 March   
2004, as set out in the "After" column of the table are based on the       
     assumption that the cash proceeds of US$ 16 million reduced by transaction 
     costs were used to repay borrowings.                                       
3.   The net asset and tangible net asset value per share in the "After" column 
are calculated as if the transaction occurred on 31 March 2004 based on    
     333,8 million shares in issue on that date.                                
4.   The Proforma values in the "After" column exclude the effects of the       
     Gledhow transaction announced on 17 May 2004.                              
Mount Edgecombe                                                                 
6 August 2004                                                                   
Sponsor                                                                         
Cazenove                                                                        
Date: 06/08/2004 04:57:04 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department