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CDZ - Cadiz Holdings Limited - Related Party Transaction CADIZ HOLDINGS LIMITED (Incorporated in the Republic of South Africa) Registration number 1997/007258/06 ISIN: ZAE000017661 JSE Share code: CDZ ("Cadiz" or "the company") ANNOUNCEMENT - RELATED PARTY TRANSACTION TRANSACTION AND RATIONALE Cadiz Special Projects Limited, a wholly owned subsidiary of Cadiz, reached agreement with Makana Investment Corporation (Pty) Ltd ("Makana") to redeem the existing R19.6 million convertible redeemable preference shares issued by Makana with a preference share dividend of 47.619% of the prime rate, which were convertible into a 24.81% ordinary shareholding in Makana on 6 April 2011("Original Preference Shares"), and to subscribe for R19.6 million convertible redeemable preference shares with a preference dividend equal to 32.996% of any ordinary dividends declared by Makana (equal to 24.81% of the total dividends including the preference share dividend), which are convertible into a 24.81% ordinary shareholding in Makana at any time up until 7 April 2016 ("New Preference Shares"). This will enable Makana to maintain its current Broad-based Black Economic Empowerment credentials as conversion by Cadiz would have diluted Makana`s almost 100% black ownership. FINANCIAL EFFECTS The table below sets out the unaudited pro forma financial effects of the decision to replace the Original Preference Shares with the New Preference Shares issued by Makana ("the Transaction"). These unaudited pro forma financial effects are the responsibility of the directors of Cadiz. The unaudited pro forma financial effects are presented for illustrative purposes only and because of their nature may not give a fair reflection of Cadiz` results and financial position after the Transaction. Pro Pro
forma forma Change "Before" "After" (cents) (cents) Earnings per share 24.1 24.5 -1.2% Diluted earnings per share 23.5 23.9 -1.3% Headline earnings per share 24.1 24.5 -1.2% Diluted headline earnings per share 23.5 23.9 -1.3% Net asset value per share 304 304 0.0% Net tangible asset value per share 177 177 0.0% Number of shares in issue (`000) 245 339 245 339 0.0% Consolidated number of shares in issue (`000) 225 205 225 205 0.0% Weighted average number of shares in issue 222 262 222 262 0.0% (`000) Diluted weighted average number of shares in 228 276 228 276 0.0% issue (`000) The unaudited pro forma financial effects are based on Cadiz`s published consolidated statement of financial position and statement of comprehensive income for the year ended 31 March 2011, assuming: 1. For the purposes of calculating earnings per share and headline earnings per share, that the transaction was effective on 1 April 2010; and 2. For the purposes of calculating net asset value and net tangible asset value per share, that the transaction was effective on 31 March 2011. 3. The EPS and HEPS as reflected in the pro forma "After" column of the table are based on the published audited consolidated statement of comprehensive income of Cadiz for the financial year ended 31 March 2011 after adjusting for the following: 3.1 Deducting the historical dividends received of R947,000 on the Original Preference Share; 3.2 Deducting effective interest of R950,000 recognised based on the measurement of the Original Preference Shares at amortised cost using the effective interest rate method; 3.3 Mark to market of R632,000 in respect of the conversion option in the New Preference Shares; 3.4 Including effective interest of R927,000 recognised based on the measurement of the New Preference Shares at amortised cost using the effective interest rate method; and Costs of R320,000 relating to the Transaction. 4. The NAV and NTAV as reflected in the pro forma "After" column of the table are based on the published audited consolidated statement of financial position of Cadiz as at 31 March 2011 after adjusting for the following: 4.1 Financial assets increasing by R632,000 due to the mark to market in respect of the conversion option in the New Preference Shares offset by the measurement of the New Preference Shares at amortised cost using the effective interest rate method; and 4.2 Trade and other payables increasing by R320,000 for the costs related to the Transaction. CONDITIONS PRECEDENT The implementation of the Transaction is subject to finalisation of the subscription agreements relating to the issue of the New Preference Shares. SMALL RELATED PARTY TRANSACTION Makana is a 13.6% shareholder in Cadiz and has therefore been treated as a related party. Ernst & Young Advisory Services Ltd, as the independent professional expert, has confirmed that the Transaction is fair and their fairness opinion is available for inspection at Cadiz`s registered office until 12 October 2011. Cape Town 1 September 2011 Sponsor: Investec Bank Limited Date: 01/09/2011 13:50:01 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.
