RAC - Racec Group Limited - Disposals, trading statement and withdrawal

RAC - Racec Group Limited - Disposals, trading statement and withdrawal         
of cautionary                                                                   
RACEC GROUP LIMITED                                                             
Incorporated in the Republic of South Africa                                    
(Registration number 1998/006153/06)                                            
Share code: RAC     ISIN: ZAE000105409                                          
("RACEC" or "the Company" or "the Group")                                       
DISPOSALS, TRADING STATEMENT AND WITHDRAWAL OF CAUTIONARY                       
DISPOSALS                                                                       
Shareholders are advised that the board of directors of the Company ("the       
Board"), having refocussed the Company`s business strategy, has decided         
to concentrate on RACEC`s core business as a rail construction,                 
electrification and maintenance contractor, which the Company has               
successfully operated for over five decades.                                    
Over the past six to nine months, RACEC has re-structured and right-sized       
its rail and support service operations, moved applicable resources to          
rail operations and will focus on acquiring and redirecting additional          
rail resources to build the capacity of RACEC Rail (Proprietary) Limited.       
The Group will commence the 2012 financial year 100% focused on rail            
operations (including rail electrification) and has already delivered           
successfully on contracts in other parts of Africa. This African                
consolidation and further expansion is in line with RACEC`s regional            
diversification strategy to get a balanced portfolio mix of regional and        
cross-border contracts.  RACEC will also look at further opportunities in       
the annuity driven mechanised maintenance market to further diversify its       
rail product mix.                                                               
Accordingly, the Company has entered into agreements to dispose of              
certain of its non-core loss-making subsidiaries. These disposals               
(collectively hereinafter referred to as the "Disposals") comprise              
Northern Electric (Cape) (Proprietary) Limited, RACEC Electrification           
(Proprietary) Limited (which includes RACEC Power (Proprietary) Limited)        
and its non-core loss-making manufacturing operations, Greenbro                 
(Proprietary) Limited and Greenglo Geysers (Proprietary) Limited.               
Although the Disposals do not require any formal disclosure in terms of         
the Listings Requirements of JSE Limited ("JSE"), the Board would like to       
inform investors and shareholders of the Company`s refocussed business          
strategy.                                                                       
TRADING STATEMENT                                                               
In terms of the JSE Listings Requirements, companies are required to            
publish a trading statement as soon as they become reasonably certain           
that the financial results for the period to be reported on will differ         
by more than 20% from that of the previous corresponding period.                
Accordingly, a review of the financial results for the year ended 30            
September 2011 by management has indicated that earnings per share and          
headline earnings per share are expected to be at least 20% lower than          
those of the previous corresponding period.                                     
Additional information will be provided to shareholders as soon as              
management has a reasonable degree of certainty as to the range, within         
20%, by which the earnings and headline earnings have decreased.                
The financial information on which this trading statement is based has          
not been reviewed or reported on by RACEC`s auditors. RACEC`s year end          
results are expected to be released on SENS on or about 15 December 2011.       
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT                                           
Further to the cautionary announcement dated 12 August 2011, and the            
subsequent renewal of cautionary announcement dated 23 September 2011,          
shareholders are advised that negotiations are no longer in progress            
which, if successfully concluded, may have a material effect on the price       
of the Company` securities. As such, caution is no longer required to be        
exercised when dealing in the Company`s securities.                             
Cape Town                                                                       
5 October 2011                                                                  
Designated Adviser                                                              
Merchantec Capital                                                              
Date: 05/10/2011 12:01:02 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.