Sharenet Sites 
Sharenet Sites
Sekunjalo - Acquisition of Bioclones (Proprietary) Limited Sekunjalo Investments Limited (Incorporated in the Republic of South Africa) (Registration number 1996/006093/06) Share code: SKJ ISIN: ZAE000017893 ("Sekunjalo" or "the company") ACQUISITION OF BIOCLONES (PROPRIETARY) LIMITED ("BIOCLONES") Introduction Shareholders are advised that Sekunjalo has acquired 50,6% of the entire issued capital of Bioclones ("the acquisition") by way of a subscription agreement ("the agreement). In terms of the agreement dated 28 June 2005, Sekunjalo will subscribe for 4 100 new ordinary shares in Bioclones ("the first tranche subscription") five business days after the fulfillment of the condition precedent referred to in paragraph 6 below ("the subscription date"). Further to the first tranche subscription and as set out in the agreement, a current Bioclones shareholder, Cyril Donninger, has granted an option to Sekunjalo to acquire 800 ordinary shares in Bioclones (being 40% of Bioclones prior to the issue of the subscription shares) which option can be exercised solely at Sekunjalo"s discretion ("the second tranche option"). The exercise period of the second tranche option will be three years commencing from the subscription date. Should the first tranche subscription, and the second tranche option be effected, Sekunjalo will hold 60,4% of Bioclones. Nature of Business The nature of the business is that of a biotechnology company devoted to the development and manufacture of modern biotechnology products for human pharmaceutical use, with new developments focused on the treatment of diseases in man due to failure of cellular immune responses. The biotechnology products are aimed at areas relating to infectious diseases, cancer and autoimmune diseases. There are currently 22 issued patents worldwide with a further 8 patents pending. Rationale Sekunjalo has an interest in the healthcare sector through its pharmaceutical and rapid diagnostic subsidiaries. The acquisition affords Sekunjalo the opportunity to increase its presence in the pharmaceutical and biotechnology sector worldwide through a marketing agreement for the biotech products produced by Bioclones. Sekunjalo currently through its rapid diagnostic business (enzyme technology), aquaculture and plant-biotechnology (Seagro), already has a presence in the biotechnology sector. This acquisition will give it critical mass in the pharmaceutical and biotechnology sectors with significant growth potential. Consideration The consideration for the first tranche subscription is R25 million to be settled through the issue of 35 714 285 Sekunjalo "B" ordinary shares of 70 cents each while the consideration for the second tranche option is R10 million to be settled with cash or Sekunjalo "B" ordinary shares of 70 cents each or a combination of cash and Sekunjalo "B" ordinary shares. Application for the listing on the JSE Securities Exchange South Africa ("JSE") of the 35 714 285 consideration shares will be made following the subscription date. Financial effects Based on the published results of Sekunjalo for the six months ended 28 February 2005, the pro forma financial effects of the first tranche subscription on Sekunjalo"s earnings, headline earnings, net asset value ("NAV") and tangible NAV are set out below. The pro forma financial information has been prepared for illustrative purposes only and because its of nature may not give a true picture of Sekunjalo"s financial position and results of operations. Per Sekunjalo Before the After the Percentage ordinary share first tranche first tranche change (cents) subscription(1 subscription(2 % ) ) Loss (6.25) (5.79) 7% Headline loss (5.92) (5.51) 7% NAV 41.94 61.22(4) 46% Tangible NAV 34.11 54.43(4) 60% Shares in issue at 28 February 2005 ("000) 234 143 269 857 Weighted shares in issue ("000) 196 119 231 833 Notes: Based on Sekunjalo"s published results for the six months ended 28 February 2005. It should be noted that as at 28 June 2005, Sekunjalo has 2 000 000 "A" ordinary shares in issue and 279 983 039 "B" ordinary shares in issue. Based on the assumption that the first tranche subscription, was effected on 1 September 2004 for income statement purposes, on 28 February 2005 for balance sheet purposes and assuming that Sekunjalo has paid the consideration of R25 million through the issue of 35 714 285 Sekunjalo "B" ordinary shares. Taking into account Sekunjalo"s 50,6% share of the profits attributable to Bioclones based on Bioclones" audited results for the year ended 31 March 2004, adjusted to reflect six months of results to align with Sekunjalo"s results for the six months ended 28 February 2005. For the purpose of the pro forma NAV and NTAV calculation, Sekunjalo has conservatively valued the investment at R67 million leading to a non- distributable reserve arising of R42 million. Condition precedent The acquisition is subject to Sekunjalo Board approval. Categorisation The first tranche subscription is a Category 3 transaction in terms of the JSE Listings Requirements. The second tranche option will be categorised in terms of the JSE Listings Requirements at the time that Sekunjalo, at its discretion, elects to exercise the option. Cape Town 28 June 2005 Sponsor Nedbank Capital Date: 28/06/2005 04:45:06 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
