Conduit - Acquisition Of A Stake In Anthony Richards & Associates (Proprietary)

Conduit - Acquisition Of A Stake In Anthony Richards & Associates (Proprietary) 
          Limited ("ARA") And Renewal Of Cautionary Announcement                
Conduit Capital Limited                                                         
(formerly IMR Investments Limited)                                              
Incorporated in the Republic of South Africa                                    
(Registration number 1998/017351/06)                                            
Share code: CND   ISIN: ZAE000073128                                            
("Conduit" or "the company")                                                    
ACQUISITION OF A STAKE IN ANTHONY RICHARDS & ASSOCIATES (PROPRIETARY) LIMITED   
("ARA") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT                                  
THE ACQUISITION                                                                 
Shareholders are advised that Conduit has:                                      
-    concluded an agreement with Mindfield Investments (Proprietary) Limited    
     ("Mindfield") to acquire a 40% stake in ARA, which conducts a credit       
     recovery and call centre services business, with effect from 1 November    
2005;                                                                      
-    been granted an option ("the option") to acquire a further 10% stake in ARA
     ("the option shares") from the minority shareholders of ARA with effect    
     from 1 November 2005, which option must be exercised by 31 December 2006   
and can only be exercised if at the time of exercise of the option at least
     30% of the shares in Conduit are owned by black economic empowerment       
     ("BEE") shareholders.                                                      
The shares in Mindfield are owned by Wayne Druian (80%) and Jason Druian (20%). 
The JSE has confirmed that it is satisfied that the acquisition does not        
constitute a related party transaction.                                         
RATIONALE                                                                       
ARA"s business is profitable, cash generative and well managed. In addition the 
business and the acquisition complement certain of Conduit"s existing           
investments and fit within its broader strategy. In this regard:                
-    the stake in ARA broadens Conduit"s interest in the insurance and risk     
     solutions financial services industry in which it is already invested      
through its stake in Black Ginger 92 (Proprietary) Limited - a BEE company 
     which has a 27.5% interest in Constantia Insurance Company; and            
-    Conduit is in a position to partner ARA"s credit recovery expertise with   
     suitable emerging BEE participants in areas in which ARA is not already    
involved. This process has already begun and Conduit has assisted ARA in   
     the formation of certain joint ventures with appropriate BEE parties.      
     Conduit is confident that it will unlock significant additional growth and 
     value in ARA to the benefit of Conduit shareholders.                       
PURCHASE CONSIDERATION                                                          
The purchase price payable to Mindfield for the acquisition comprises:          
an initial price of R4 984 000; plus                                            
a deferred price equivalent to 5.67 times the amount by which ARA"s profit after
tax for the 24 months ended 28 February 2007 exceeds R4 850 000 (subject to a   
maximum deferred price of R6 010 200) and provided that if ARA"s profit after   
tax for the 12 months ended 28 February 2007 is less than R2 200 000, the       
deferred price will be nil.                                                     
Conduit will discharge the:                                                     
-    initial price by paying R1 464 000 in cash and issuing 5 866 666 Conduit   
     shares at 60 cents per share;                                              
-    deferred price, if any, by paying 29.49% of the deferred price in cash and 
issuing Conduit shares at 60 cents per share in respect of the balance.    
The purchase price payable to the minority shareholders for the option shares is
equivalent to 25% of the purchase price payable in terms of the acquisition and 
will be discharged in the same proportion of shares and cash as is applicable to
the acquisition, save that the cash portion of the initial price will include   
interest at the call rate from 1 November 2005 until the date of payment.       
CONDITIONS PRECEDENT                                                            
The acquisition is subject to the following conditions precedent:               
-    Conduit advising Mindfield in writing by 28 February 2006 that it is       
     satisfied with the results of a due diligence investigation of the business
     of ARA;                                                                    
-    key employees of ARA concluding a written service and restraint agreement  
with ARA on terms and conditions acceptable to Conduit by 28 February 2006.
FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT                        
The financial effects of the transaction will be published in due course.       
Shareholders are advised to continue exercising caution when dealing in the     
company"s shares until a further announcement is made.                          
FURTHER DOCUMENTATION                                                           
The acquisition and option collectively constitute a category 2 transaction. A  
circular containing more detail in relation to the transaction will be sent to  
Conduit shareholders in due course.                                             
Melrose Arch                                                                    
16 January 2006                                                                 
Corporate advisor and transaction sponsor                                       
Java Capital (Proprietary) Limited                                              
Sponsor                                                                         
Merchant Sponsors (Proprietary) Limited                                         
Date: 16/01/2006 05:49:56 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department