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HUG - Huge Group - Purchase of Single Stock Futures Contracts ("SSF`s), Related Specific Repurchase of Securities and Cautionary Announcement HUGE GROUP LIMITED (Registration number 2006/023587/06) Share code: HUG & ISIN: ZAE000102042 ("Huge" or "the company") PURCHASE OF SINGLE STOCK FUTURES CONTRACTS ("SSF`s), RELATED SPECIFIC REPURCHASE OF SECURITIES AND CAUTIONARY ANNOUNCEMENT Shareholders are advised that on 16 October 2008 Huge purchased 80 455 SSF`s, representing 8 045 500 shares in Huge, at a spot price of 362 cents per share. The purchase of either SSF`s or Contracts For Difference ("CFD`s) was authorised by a resolution of the board of directors of the company, which was passed on 11 June 2008. Watermark Securities (Proprietary) Limited ("Watermark") was then mandated to acquire CFD`s and SSF`s on behalf of Huge. The future price approximated the market price of the company`s securities at the date of entering into the derivative contracts. The purchase of the SSF`s was from Watermark following the prior close out of two directors` SSF positions, namely J Herbst and A Potgieter, as announced on SENS on 17 October 2008. Pursuant to a ruling by the JSE Limited ("JSE"), and following representations by Huge to the contrary, the JSE has held that the purchase of the SSF`s constituted a repurchase of the company`s shares from a related party as defined in section 5.69 of the JSE Listings Requirements, and is therefore in contravention of the JSE`s Listings Requirements. Accordingly, the company has been advised that a circular to shareholders must now be issued and shareholder approval for the future specific repurchase of the underlying securities must be obtained. A circular in this regard is in the process of being prepared and shall be mailed to shareholders in due course. The shares will be repurchased from Syfrets Nominees (Proprietary) Limited, a nominee company of Nedbank Limited. The SSF`s were acquired utilizing internal cash flows of the group. As at the date of this announcement, the company is exposed to a potential future funding obligation of R4 523 193.15 in regard to these SSF`s. The directors of Huge, after considering the effect of the above transaction, are of the view that the company and the group: - will be able, in the ordinary course of business, to pays its debts; - that the assets will be in excess of the liabilities as measured in accordance with the accounting policies used in the latest consolidated annual financial statements; and - the share capital and reserves will be adequate for ordinary business purposes; and - the working capital will be adequate for ordinary business purposes, for a period of twelve months after the date of this announcement. In the event that the shares are repurchased, the shares will be held as treasury shares by a subsidiary of Huge, limited to a maximum of 10% and will not be cancelled. The balance above 10% will be cancelled. Pro forma financial effects of the intended specific repurchase of securities arising from both the purchase of SSF`s and CFD`s will be announced shortly. Accordingly shareholder are advised to exercise caution in dealing in their securities until the pro forma financial effects are announced. Woodmead 16 March 2009 Designated Advisor Arcay Moela Sponsors (Pty) Limited (Registration number 2006/033725/07) Date: 16/03/2009 17:30:02 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.
