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SKJ - Sekunjalo Investments Limited - Specific issue of shares for cash SEKUNJALO INVESTMENTS LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1996/006093/06) ISIN: ZAE000017893 Share Code: SKJ ("Sekunjalo" or "the Company") SPECIFIC ISSUE OF SHARES FOR CASH At the general meeting of Sekunjalo shareholders held today, 29 August 2007 at 10:00, the ordinary resolution relating to the specific issue of 13 million `B` ordinary shares for cash to Absa Corporate and Business Bank ("ACBB"), a division of ABSA Bank Limited ("ABSA"), as detailed in the circular posted to shareholders on 13 August 2007, was unanimously approved ("the specific issue"). DETAILS OF THE SPECIFIC ISSUE 1. INTRODUCTION Sekunjalo announced on SENS on 23 May 2007 that ACBB has acquired 31 million shares representing approximately 7% of the issued share capital of the Company ("the Transaction"). It was further announced that Sekunjalo had granted an option to ACBB to acquire up to 9,9% of the issued share capital of the Company within a 180-day period, subject to shareholder approval. Accordingly, shareholder approval was sought for the specific issue of a further 13 million `B` ordinary shares to ACBB at 82 cents per share. 2. RATIONALE FOR THE SPECIFIC ISSUE Sekunjalo is a diverse group with investments spanning numerous sectors. Sekunjalo is now looking to unlock the value it has built up within its investment base and to explore further investment opportunities. ABSA has taken a strategic decision to partner with Sekunjalo to facilitate the Group`s ability to unlock value and explore new investment opportunities and in so doing have subscribed for a total of 44 million `B` ordinary shares. The investment by ACBB will inject cash into the Group to reduce borrowings. The Board believes that the partnership with ACBB will open the doors for many more opportunities between the parties and will allow Sekunjalo to explore new investments and improve the current investments in the Group. In addition, the Board believes that by using the consideration from the specific issue to lower the short term borrowings in the Group and hence the interest costs, the improved profitability will benefit the shareholders. 3. TERMS OF THE SUBSCRIPTION AGREEMENT ABSA shall have the right, but not the obligation, to appoint a representative on Sekunjalo`s investment committee once the Transaction is finalised. ABSA shall have the right of first refusal for the funding of any investment opportunity considered by Sekunjalo. 4. PRICING FOR THE SPECIFIC ISSUE The pricing for the specific issue was established by utilising the weighted average share price for the 30-days prior to the 15th day of May 2007 and applying a 3% discount, thus an issue price of 82 cents. This was the pricing utilised for the Transaction and is evidenced by the first tranche which can be reviewed in the announcement released on SENS on 23 May 2007. 5. PRO FORMA FINANCIAL EFFECTS OF THE SPECIFIC ISSUE The table below sets out the unaudited pro forma financial effects of the specific issue, based on the assumptions set out below. The financial effects set out below are the responsibility of the directors of Sekunjalo. The unaudited pro forma financial effects have been prepared for illustrative purposes only. The Group`s financial position, changes in equity, results of operations or cash flows may change after completion of the specific issue. Financial effects of the Before the Pro forma Percentage specific issue specific issue After the change (1) specific issue % (2, 3,4) Profit for the period 10 787 11 253 4.32% Headline earnings 10 787 11 253 4.32% Earnings per share 2.91 2.93 0.79% Headline Earnings per share 2.91 2.93 0.79% Diluted Headline Earnings per 2.70 2.73 1.11% share Net Asset Value per share 101.62 101.00 (0.61)% Net Tangible Asset Value per 69.59 69.99 0.57% share Number of shares in issue 396 794 806 409 794 806 Weighted number of shares in 370 828 820 383 828 820 issue Diluted number of shares in 399 386 638 412 386 638 issue Assumptions: 1. Based on Sekunjalo`s unaudited earnings, headline earnings, NAV and tangible NAV for the 6 month period ended 28 February 2007. 2. Based on the assumption that the specific issue occurred at 1 September 2006 for income statement purposes; and 28 February 2007 for balance sheet purposes. 3. After taking into account the adjustment for a reduced interest expense as a result of R10.660 million of the total cash amount raised in terms of the specific issues being used to reduce Sekunjalo`s borrowings. 4. The reduced interest expense was arrived at by using 12.11% per annum, being the average interest rate incurred by Sekunjalo on its borrowings for the 6 month period ended 28 February 2007. The pro forma financial information disclosed above had been presented in a manner consistent with both the format and accounting policies adopted by Sekunjalo and, in quantifying pro forma adjustments, the accounting policies are on the same basis as Sekunjalo would normally adopt in preparing its annual financial statements. Cape Town 30 August 2007 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 30/08/2007 15:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
