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SOV - Sovereign Food Investments Limited - Announcement of a Category 2 transaction SOVEREIGN FOOD INVESTMENTS LIMITED (Incorporated in the Republic of South Africa) (Registration Number 1995/003990/06) JSE Code: SOV ISIN Number: ZAE000009221 ("Sovereign" or "the Company") ANNOUNCEMENT OF A CATEGORY 2 TRANSACTION 1. INTRODUCTION Shareholders are advised that the Company disposed of a broiler farm, known as Accurate Farm ("the Farm"), to Simile Farmers (Proprietary) Limited, a broad-based black economic empowerment ("BEE") company ("the Purchaser"), with effect from 31 March 2011 ("the Transaction"). Furthermore, the Purchaser entered into a contract grower arrangement with Sovereign in terms of which the Purchaser agreed to supply broiler chickens to Sovereign, subject to certain operational and quality requirements, thereby further contributing to Sovereign`s BEE procurement. 2. RATIONALE FOR THE TRANSACTION By implementing the Transaction and entering into a contract grower arrangement with the Purchaser, Sovereign improved its BEE credentials by increasing the Company`s BEE procurement levels as well as having reduced its gearing position with the proceeds received from the Transaction. 3. TRANSACTION CONSIDERATION AND APPLICATION OF THE PROCEEDS The total purchase consideration paid for the Farm was R36 025 964 ("Purchase Consideration") and was settled in cash. Following the Transaction, an amount of R29 million was utilised by Sovereign to reduce interest bearing debt and R7 million was applied towards Sovereign`s working capital requirements. 4. CONDITIONS PRECEDENT All the conditions precedent to the Transaction have been fulfilled. 5. CATEGORISATION AND COMPLIANCE WITH THE JSE LIMITED LISTINGS REQUIREMENTS ("LISTINGS REQUIREMENTS") The Transaction is classified as a Category 2 transaction in accordance with the Listings Requirements. The JSE Limited has been informed that the requirements for a Category 2 transaction relating to the Transaction, which should have been complied with in March 2011, had not been met in terms of the Listings Requirements and the matter has been dealt with accordingly. In terms of the Listings Requirements, should an issuer enter into a Category 2 transaction the terms thereof should be announced. This announcement is therefore published in order to comply with the Listings Requirements. The Transaction did not have a significant effect on the earnings, headline earnings or net asset value of Sovereign and therefore, the pro forma financial effects of the Transaction have not been disclosed. Port Elizabeth 09 February 2012 Sponsor One Capital Date: 09/02/2012 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.
