VOLUNTARY TRADING UPDATE

Erbacon Investment Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 2007/014490/06)
Share code: ERB
ISIN: ZAE000111571

(a''Erbacona'' or a''the Companya'' a''the Groupa'')

VOLUNTARY TRADING UPDATE


Shareholders are referred to the debt restructuring plan

announced on SENS and set out in the circular issued to

shareholders on 1 June 2012 (a''Debt Restructuring Plana''),

which will be partially implemented by way of a rights
offer (a''Rights Offera'').


The purpose of this voluntary trading update is to advise

shareholders of Erbacona''s position ahead of the anticipated
Rights Offer.


Erbacona''s revenues of R333 million for the 1st quarter ended

31 May 2012 were over 50% higher than the comparable period
in the prior financial year. The Group returned to

operating profitability in the quarter under review. As at

31 May 2012, net interest bearing cash assets were R23,8

million comprising cash of R36,4 million, overdraft of nil

and asset-based financing liabilities of R12,6 million (29

February 2012: net interest bearing liabilities of R21.6

million), which excludes liabilities that will convert to

equity on implementation of the Debt Restructuring Plan.

The liquidity position of the Group improved as a result of

profitable trading, working capital management and R25

million   of    equity-targeted   funding   received    from
shareholders and management.


As at 30 June 2012, the secured forward order book of

Erbacon was R900 million, 95% of which will be executed in

the current financial year. Net interest bearing cash

assets of R17,9 million were held at 30 June 2012 (cash of

R29,7 million; overdraft of nil; asset-based financing

liabilities  of   R11,8   million).  Unutilised  overdraft

facilities with banks at the 30th of June 2012 were R40
million.


The prospects statement for Erbacon as contained in the

Audited Condensed Provisional Results for the year ended 29

February 2012, as announced on SENS on 17 May 2012, remains
unchanged and included the following statements:

    Trading conditions in the South African building and

    civil engineering markets are improving with an
    increased quantum of tenders coming to market;

    A number of commercial claims in favour of Erbacon are

    still to be agreed with our clients, the finalisation

    of which may positively impact Erbacona''s operating
    result in the 2013 financial year;

    Erbacona''s liquidity position remains constrained,

    however, it is forecast to ease as new profitable

    contracts are undertaken and commercial claims are
    resolved;

    The solvency of the Group will be significantly

    improved   through    implementation   of    the  Debt
    Restructuring Plan;

    The Board is confident that Erbacon will return to

    operating profitability in the 2013 financial year;
    and

    Various IFRS related, once-off, non-cash accounting

    charges relating to the Debt Restructuring Plan are

    likely to result in an attributable loss for the

    period to 28 February 2013. The net asset value of the

    Group will not be negatively impacted by these non-
    cash charges.


The financial results on which this voluntary trading

update has been based have not been reviewed or reported on
by the Groupa''s auditors.


3 July 2012
Midrand

Designated adviser:
PSG Capital (Pty) Limited

Date: 03/07/2012 03:39:00 Supplied by www.sharenet.co.za                     
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