Sharenet Sites 
Sharenet Sites
Sekunjalo - Disposal and acquisition announcement Sekunjalo Investments Limited (Incorporated in the Republic of South Africa) (Registration number 1996/006093/06) Share code: SKJ ISIN: ZAE000017893 ("Sekunjalo" or "the company") DISPOSAL OF CERTAIN PREMIER FISHING SA (PROPRIETARY) LIMITED ("PREMIER FISHING") CONSUMER BRANDS, THE ACQUISITION OF A FURTHER STAKE IN BIOCLONES (PROPRIETARY) LIMITED ("BIOCLONES") AND CAUTIONARY ANNOUNCEMENT Disposal of certain Premier Fishing consumer brands 1. Introduction Shareholders are advised that Sekunjalo"s 80% held subsidiary, Premier Fishing, has entered into an agreement with Pioneer Foods (Proprietary) Limited (trading as SAD) ("Pioneer"), dated 30 June 2005 ("the agreement"). In terms of the agreement, Premier Fishing will dispose of the business of certain of its consumer brands being Redro, Pecks and Iona ("the brands") as a going concern and certain assets related to the aforementioned brands" business, to Pioneer effective on 29 August 2005 ("the disposal"). The disposal will become effective upon fulfillment of the conditions precedent set out in paragraph 6 below. 2. Nature of business The nature of the business sold to Pioneer is the business of manufacturing, distributing and selling meat and fish spreads under and in terms of the brands. 3. Rationale Premier Fishing"s core business is that of exporting lobster (West Coast and South Coast), hake and squid, the processing of pelagic fish and aquaculture farming (abalone). Premier Fishing has developed significant competencies in the above areas and has also recently focused on the development of brands such as Redro, Pecks, Iona, SSF and Seagro. Sekunjalo"s board is of the view that substantial value has been built up in these brands and that further growth in certain of these brands would require additional capital investment. The Sekunjalo board believes that by using the consideration from the sale of the brands to grow existing core businesses, greater efficiencies and growth across the Sekunjalo group will be achieved. 4. Consideration The consideration for the business and the assets disposed being movable assets, goodwill, material contracts and intellectual property is R39 million. A further maximum amount of R7 million will be paid for Premier Fishing"s inventory on hand relating to the disposal, the value of which will be agreed between Premier and Pioneer following a joint inventory count by the parties. The total consideration due will be settled in cash against delivery of the inventory and will be used to reduce Sekunjalo"s short-term borrowings and fund the growth of underlying businesses. 5. Financial effects Financial effects of the disposal will be published in due course. 6. Conditions precedent The disposal is subject to certain conditions precedent which pertain to a financier releasing its cession over the stock and movable assets of Premier Fishing, the employee representatives agreeing to the non-transfer of employees of the going concern to Pioneer and the termination of a certain distribution agreement to which Premier Fishing is a party. All conditions precedent must be fulfilled or waived by 29 August 2005. 7. Service agreement Further to the agreement, Premier Fishing and Pioneer have entered into a service agreement in terms of which Premier Fishing shall manufacture meat and fish spreads under and in terms of the brands for Pioneer. The service agreement is for a minimum duration of three and a half years and is terminable on 12 months notice. Notice of termination may only be given after the first two and a half years of the service agreement"s duration. 8. Categorisation The disposal at this stage is a Category 2 transaction in terms of the JSE Limited ("JSE") Listings Requirements. However, pending a ruling to be obtained from the Issuer Services Division of the JSE, the disposal could be categorised as a Category 1 transaction. Acquisition of a further stake in Bioclones 1. Introduction Shareholders are referred to the announcement dated 28 June 2005 ("the announcement") in terms of which Sekunjalo would subscribe for 4 100 new ordinary shares in Bioclones ("the first tranche subscription") and Sekunjalo had been granted an option to acquire a further 800 ordinary shares in Bioclones (being 20% of Bioclones prior to the issue of the first tranche subscription shares and not 40% as mentioned in the announcement) ("the second tranche option"). The agreement regarding the first tranche subscription and second tranche option has been amended on 1 July 2005, to allow Sekunjalo to acquire a further 1 200 ordinary shares in Bioclones from Cyril Donninger by no later than 15 July 2006, by serving a written notice to him ("the third tranche acquisition"). The third tranche acquisition will become effective following the fulfilment of the condition precedent set out in paragraph 6 below and the serving of the written notice. The rationale for the third tranche acquisition is the same as that for the first tranche subscription and the second tranche option, details of which are set out in the announcement dated 28 June 2005. Following the first tranche subscription, Sekunjalo will hold 50,6% in Bioclones. Following the first tranche subscription and the third tranche acquisition, Sekunjalo will hold a 65,4% interest in Bioclones. Should the second tranche option be exercised further to the first tranche subscription and the third tranche acquisition, Sekunjalo will hold 75,3% in Bioclones. If required, the Articles of Association of Bioclones will be amended in due course to conform with Schedule 10 of the JSE Listings Requirements. 2. 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. 3. 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. 4. Consideration The consideration for the third tranche acquisition is R15 million to be settled with cash or Sekunjalo "B" ordinary shares of 70 cents each, or a combination of cash and shares. 5. Financial effects Financial effects of the third tranche acquisition will be published in due course. 6. Condition precedent The third tranche acquisition is subject to Sekunjalo board approval. 7. Categorisation The first tranche subscription and the third tranche acquisition, when aggregated, are a Category 2 transaction in terms of the JSE Listings Requirements. A circular containing full details of the first tranche subscription and third tranche acquisition will be despatched to Sekunjalo shareholders in due course. Cautionary announcement Shareholders are advised to exercise caution when dealing in Sekunjalo"s securities until the financial effects of the disposal and the third tranche acquisition are published and the ruling regarding the disposal referred to in paragraph 8 above is obtained. Cape Town 4 July 2005 Sponsor Nedbank Capital Attorneys regarding the disposal Grant Gunston Incorporated Date: 04/07/2005 04:58:11 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
