ITR - Intertrading Limited - Proposed acquisition of a 60% shareholding in Connectnet Broadband Wireless (PROPRIETARY) Limited and cautionary announcement INTERTRADING LIMITED (Incorporated in the Republic of South Africa) (Registration number 1987/004777/06) Share code ITR ISIN ZAE000015566 ("Intertrading" or "the company") PROPOSED ACQUISITION OF A 60% SHAREHOLDING IN CONNECTNET BROADBAND WIRELESS (PROPRIETARY) LIMITED CAUTIONARY ANNOUCEMENT 1. Introduction Shareholders are referred to the SENS announcement released by the JSE Limited ("JSE") on 11 November 2010 informing shareholders of the suspension of Intertrading in terms of 3.26 of the Listings Requirements. The purpose of this announcement is to inform shareholders about the Proposed Acquisition referred to below which, if all the requirements are met, will result in Intertrading retaining its listing on the JSE and becoming a technology focused company. 2. The Proposed Acquisition On 1 February 2011 Encha Tech (Proprietary) Limited ("Encha") offered to purchase 150 ordinary shares representing 60% of the issued share capital of ConnectNet Broadband Wireless (Proprietary) Limited ("ConnectNet") from Fast Communication Systems (Proprietary) Limited ("FastComm") for a cash consideration of R45,6 million ("the Offer") which Offer has been accepted by FastComm. In terms of the Offer, Encha is entitled to cede and transfer all of its rights and obligations to its holding company or its subsidiary company or other nominee ("the Encha nominee") provided that Encha shall guarantee the performance of the obligations of the Encha Nominee. On 21 February 2011, Intertrading accepted a proposal from Encha to assume Encha`s rights and obligations in terms of the Offer ("the Proposed Acquisition") and thereby acquire 60% of ConnectNet through the issue of ordinary Intertrading shares to FastComm at a price of 15 cents per share. On 22 February 2011, Encha notified FastComm in writing of its election to cede its rights in terms of the Offer to Intertrading which election was accepted by FastComm. 3. Encha Subscription Encha has entered into an agreement with FastComm in terms of which Encha will acquire all Intertading shares issued to FastComm at a price of 15 cents per share (the "Encha subscription"). Furthermore, Encha has undertaken to subscribe and/or to cause to be subscribed for as many new ordinary shares in Intertrading as may be necessary to ensure that Intertrading complies with clause 4.28(c) of the JSE Listings Requirements of having a subscribed share capital post the Proposed Acquisition of not less than R25 million. 4. The business of Encha Encha is owned by Encha Group Limited, an investment holding company with interests in mineral exploration, industrial, technology and property assets. Encha Group is controlled by the Moseneke family. 5. The business of ConnectNet Connectnet Broadband Wireless (Proprietary) Limited is a provider of value-added wireless data services for business-to-business and machine-to-machine applications. Established in 2004, ConnectNet is a leader in GSM Data (GPRS/EDGE/3G/HSDPA/HSUPA) service provision, with blue chip clients in the retail, financial, security, telemetry, healthcare and pharmaceutical sectors. 6. Rationale for the Proposed Acquisition The rationale for the Proposed Acquisition is to lift the suspension of trading in Intertrading. It has always been the intention of the board of Intertrading to find a suitable acquisition. The Proposed Acquisition gives shareholders exposure to an exciting technology company or the opportunity to accept the mandatory offer as mentioned in paragraph 8 below. It is the intention of Encha Group Limited to pursue its technology interests through Intertrading and to grow a substantial listed technology group by way of acquisition and organic growth. It is optimal for Encha to achieve its aggressive growth plans via a listed entity, enabling it to access the capital raising opportunities presented by a JSE listing and to ensure the growth of the group with other investors. The Proposed Acquisition provides the first step in such a strategy. It is proposed that the existing Board of Intertrading will appoint a new Board to be nominated by Encha and the current Board members will tender their resignations. This will enable the new board members to pursue and bed down the Proposed Acquisition in the short term, and to set the strategy for the new technology company. 7. Conditions precedent The Proposed Acquisition is subject to the fulfillment of inter alia, the following conditions precedent: - Intertrading having obtained all regulatory approval, including, but not limited to, the approval of the Securities and Regulation Panel("SRP") and the JSE; - the shareholders of Intertrading passing in a general meeting such resolutions as may be necessary for the proposed acquisition. 8. Change of control and mandatory offer The Encha subscription will constitute a change in control, an "affected transaction" in terms of the SRP Code. Accordingly, Encha will make a mandatory offer at a price of 15 cents per share to all shareholders of Intertrading. 9. Financial effects The financial effects of the Proposed Acquisition have not yet been determined and will be announced in due course. 10. Cautionary announcement and further documentation Shareholders are advised that once the final agreements and financial effects relating to the Proposed Acquisition have been finalised, a detailed terms announcement will be released on SENS and published in the press. Shareholders are accordingly advised to exercise caution when dealing in the company`s securities until a further announcement is made. A circular to shareholders containing the requisite information pertaining to the Proposed Acquisition and convening a meeting of shareholders will be posted to shareholders in due course. 4 March 2011 Waverley, Johannesburg Sponsor Sasfin Capital (a division of Sasfin Bank Limited) Date: 04/03/2011 16:40:01 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`). 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