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UBU - Ububele Holdings Limited - Update on acquisition by yield Chemicals Group of Erintrade and R.T. Chemicals and specific issue of 1 250 000 ordinary shares to AIP Ububele Holdings Limited Incorporated in the Republic of South Africa (Registration number: 1998/011074/06) Share code: UBU ISIN Code: ZAE000144739 ("Ububele" or "the Company") UPDATE ON ACQUISITION BY YIELD CHEMICALS GROUP OF ERINTRADE AND R.T. CHEMICALS AND SPECIFIC ISSUE OF 1 250 000 ORDINARY SHARES TO AIP 1. PROPOSED ACQUISITION OF ERINTRADE AND R.T. CHEMICALS Shareholders are referred to the Company`s detailed announcement on SENS dated 16 September 2011 ("the Announcement") regarding the proposed acquisition of Erintrade (Pty) Limited ("Erintrade") and R.T. Chemicals (Pty) Limited ("R.T. Chemicals"), whereby Yield Chemicals Group (Pty) Limited ("Yield Chemicals Group"), a wholly-owned subsidiary of the Company had entered into a sale of shares agreement with Messrs Richard Peter Wimbush, Richard Trevor Wimbush and JJ Faul (collectively hereinafter "the Sellers"), in terms of which the Sellers will dispose of 49.9% of the entire issued share capital in Erintrade and R.T. Chemicals, to Yield Chemicals Group ("the Proposed Acquisition") for the total purchase consideration of R40 million. Subsequent to the successful implementation of Proposed Acquisition, Erintrade and R.T. Chemicals will become wholly-owned subsidiaries of Yield Chemicals Group. 2. PROPOSED SPECIFIC ISSUE OF SHARES Shareholders are further advised that Ububele has proposed to issue 1 250 000 ordinary shares in Ububele to Arcay Investment Portfolio (Pty) Limited ("AIP"), based on a subscription price of 100 cents per Ububele ordinary share ("the Proposed Specific Issue of Shares"), subject to approval from shareholders. The Proposed Specific Issue of Shares is in lieu outstanding fees for services rendered to Ububele by Arcay Corporate Finance (Pty) Limited ("Arcay CF"), as previous corporate advisor to Ububele during the reverse listing of Ububele into Milkworx Limited in November 2009. Subsequent to the services being rendered, Arcay CF ceded the outstanding fees claim to AIP. 3. CHANGES TO THE PRO FORMA FINANCIAL EFFECTS The pro forma financial effects of the Proposed Acquisition, as disclosed in the Announcement, have been updated in terms of Section 9.17 of the JSE Listings Requirements and the pro forma financial effects of the Proposed Specific Issue of Shares have been included. The pro forma financial effects of the Proposed Acquisition and the Proposed Specific Issue of Shares are presented for illustrative purposes only and because of their nature may not give a fair reflection of the Company`s financial position nor of the effect on future earnings after the Proposed Acquisition and the Proposed Specific Issue of Shares. Set out below are the unaudited pro forma financial effects of the Proposed Acquisition and the Proposed Specific Issue of Shares, based on the reviewed abridged results for the year ended 30 June 2011. The directors of Ububele are responsible for the preparation of the unaudited pro forma financial information. Reviewed Unaudited Change Unaudited Change (%) results pro forma (%) pro forma before after after acquisition acquisition acquisition and (cents) and specific specific issue of issue of shares shares (cents) (cents) Basic 1.25 1.38 10.40% 1.72 24.64% earnings per share Basic 1.27 1.40 10.24% 1.74 24.29% headline earnings per share Net asset 73.81 57.36 (22.29%) 57.65 0.51% value per share Net 7.13 (9.32) (230.72%) (8.55) 8.26% tangible asset value per share Weighted 177 161 405 177 161 405 - 178 411 405 0.71% average number of shares in issue Number of 177 167 822 177 167 822 - 178 417 822 0.71% shares in issue Notes 1. The "Reviewed results before acquisition and specific issue of shares" figures have been extracted from the reviewed results of Ububele for the year ended 30 June 2011. 2. The basic earnings per share and basic headline earnings per share figures in the "Unaudited pro forma after acquisition" and "Unaudited pro forma after acquisition and specific issue of shares" columns have been calculated on the basis that the acquisition and the specific issue of shares was effected on 1 July 2010. 3. The net asset value per share and net tangible asset value per share figures in the "Unaudited pro forma after acquisition" and "Unaudited pro forma after acquisition and specific issue of shares" columns have been calculated on the basis that the acquisition and the specific issue of shares was effected on 30 June 2011. 4. A taxation rate of 28% is assumed. 5. The basic earnings per share and basic headline earnings per share figures have been calculated based on the weighted average number of shares in issue at 30 June 2011. 6. The net asset value per share and net tangible asset value per share figures have been calculated based on the number of shares in issue at 30 June 2011. 7. The "Pro forma adjustments for the acquisition" figures are based on the audited financial results of Erintrade and R.T. Chemicals for the year ended 30 June 2011. 8. Ububele acquired 49.9% of the equity interest of Erintrade and R.T. Chemicals for R40 million. 9. The R40 million for the acquisition was financed by Land Bank, at an interest rate of prime. 10. Transaction costs of R780 000 plus VAT for the acquisition and specific issue of shares, to be settled in cash, were assumed. 11. Ububele issued 1 250 000 ordinary shares at 100 cents per share to AIP, in terms of the issue of shares for cash. The directors deemed the fair value to be 50c at the time of the issue. The difference in the fair value of the shares to be issued and the debt being extinguished resulted in a profit of R625 000 which was taken directly to the statement of comprehensive income 12. All adjustments, except for transaction costs, are expected to have a continuing effect. 4. UPDATE REGARDING THE CIRCULAR TO SHAREHOLDERS Ububele is currently in the process of finalising the circular to shareholders in respect of the Proposed Acquisition and the Proposed Specific Issue of Shares ("the Circular") and it is anticipated that the Circular will be posted to Ububele shareholders on or about Tuesday, 15 November 2011. 14 November 2011 Designated Adviser PSG Capital Date: 14/11/2011 16:16:02 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.
