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Labat - Listing Of Labat Traffic Solutions, Acquisition Of Minority Interests, Introduction Of Strategic 25% Bee Shareholder And Renewal Of Cautionary Labat Africa Limited Incorporated in the Republic of South Africa (Registration Number 1986/001616/06) Share code: LAB ISIN: ZAE000018354 ("Labat" or "the group") LISTING OF LABAT TRAFFIC SOLUTIONS, ACQUISITION OF MINORITY INTERESTS, INTRODUCTION OF STRATEGIC 25% BEE SHAREHOLDER AND RENEWAL OF CAUTIONARY 1. Introduction The acquisitions of the minority interests, set out hereafter, are pursuant to the board of Labat"s intention to extract maximum shareholder value through a separate listing of Labat Traffic Solutions (Proprietary) Limited ("LTS"). LTS, an unlisted subsidiary of Labat, has concluded acquisition agreements to acquire the minority interests in LTS and Traffic Computer Services (Proprietary) Limited ("TCS"), a wholly-owned subsidiary of LTS. 2. Background to LTS LTS is an Information Technology and Communications company that generates and processes data on behalf of clients by utilising its sophisticated technology and intellectual property. LTS is focused on the government sector, in which it is strong at the municipal level. 3. Acquisitions by LTS Agreement has been reached between LTS and its minority shareholders (being, The Suikerbos Trust and Pharoah Limited) in terms of which LTS will acquire 49% of its shares for R28 million in cash. The effective date of this acquisition is 31 August 2006. Furthermore, LTS will acquire 49% of the issued share capital that it does not already own in TCS from Jacobus Hermanus Taljaard and the Birkholtz Family Trust for R24 million in cash, with an additional R6 million deferred payment over three years, subject to certain warranties. The effective date of this acquisition is 31 March 2006. 4. Funding by strategic shareholder LTS has reached agreement with Ice-Breakers 101 (Proprietary) Limited whereby it will raise a combination of preference and ordinary share and debt funding which will be set out more fully in a circular to Labat shareholders. These acquisitions are conditional upon the requisite regulatory and shareholders approval. 5. The proposed listing of LTS The board has been considering a number of strategic alternatives with regard to the optimal future structure of the group in order to maximize shareholder value. To this end it is intended to list the LTS business following the acquisitions as a separate entity on the Alternative Exchange of JSE Limited ("JSE"). 6. Related party The minority shareholders in LTS and TCS each hold 49% and are therefore regarded as major shareholders. Accordingly, both acquisitions constitute related party transactions in terms of the Listings Requirements of the JSE and require fair and reasonable opinions which will be set out in the circular to Labat shareholders. 7. Pro forma financial effects of the acquisitions The acquisitions will have a material financial impact on Labat, however the pro forma financial effects of the acquisitions can only be determined once the terms of the funding have been finalised. 8. Further documentation and renewal of cautionary The circular containing full details of the acquisitions and incorporating a notice of general meeting will be sent to Labat shareholders in due course. Shareholders are advised that Labat is still involved in negotiations which, if successfully concluded, may have a material effect on the price at which Labat"s shares trade. Accordingly, shareholders are advised to continue to exercise caution when trading in Labat shares on the JSE until a further announcement is made. 30 August 2006 Sponsor Merchant Sponsors (Proprietary) Limited Date: 30/08/2006 05:07:12 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
