NUTRITIONAL HOLDINGS LIMITED - Disposal of Registered Dossiers and Renewal of the Cautionary Announcement

Disposal of Registered Dossiers and Renewal of the Cautionary Announcement

NUTRITIONAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 2004/002282/06)
Share code: NUT ISIN: ZAE000156485
(“NUT” OR “THE COMPANY”)

Disposal of Registered Dossiers and Renewal of the Cautionary
Announcement

1.   INTRODUCTION

NUT, through its wholly owned subsidiary Impoli Drugs 1966
Proprietary Limited (“Impilo”), is pleased to announce that it
has entered into a sale of asset agreement (“the Agreement”)
with Avid Brands Proprietary Limited (“Avid”) whereby Impilo
has agreed to sell Medicines Control Council registered
dossiers and related trademarks (“the Assets”) for a
consideration of R5 million, excluding value added tax (“the
Consideration”)(“the Disposal”).

The effective date of the Disposal will be the 30th of
September 2016 (“Effective Date”).

NUT through the repayment of Impilo’s loan account will use
the Consideration to provide working capital to Nutritional
Foods Proprietary Limited.

2.   RATIONALE FOR THE DISPOSAL

In 2014 Impilo entered into a 10 year royalty agreement with
Avid whereby Avid took over full control of all manufacturing,
marketing and selling of Impilo’s basket of basic family
healthcare products. In return Impilo was paid a royalty
amounting to 10% of the net invoiced sales per month. NUT
directors are of the opinion that the Disposal will result in
a release of a lump sum payment which better serves the goals
of the Company.

3. INFORMATION ON ASSETS

The Assets include no less than 18 dossiers and related
trademarks which contain all the technical and other
information required for the application for the application
for the registration under the Medicines and Related
Substances Act, 1965 and any regulations promulgated
thereunder, as amended.

The value of the Assets sold in Impilo is R625 087 and the
profits attributable thereto for the year ended 29 February
2016 was R473 671 after tax.

4.   SALIENT TERMS OF THE AGREEMENT

4.1 All the suspensive conditions to the Agreement have been
fulfilled.

4.2   The Consideration of R5 million excluding value added
tax will be payable in the following tranches:
   4.2.1 R2 500 000 on the Effective Date;
   4.2.2 R625 000 plus interest charged at Prime on 31 December
         2016;
   4.2.3 R625 000 plus interest charged at Prime on 31 March
         2017;
   4.2.4 R625 000 plus interest charged at Prime on 30 June
         2017; and
   4.2.5 R625 000 plus interest charged at Prime on 30 September
         2017.

4.3 Impilo has provided Avid with standard warrantees for a
transaction of this nature.

5.   CATEGORISATION

The Disposal qualifies as a Category 2 acquisition in terms of
the JSE Listings Requirements.

6.   RENEWAL OF CAUTIONARY ANNOUNCEMENT

Shareholders are referred to the cautionary announcement
released on SENS on 30 August 2016. Shareholders are advised
that the Company is still in discussions with Ontario Private
Equity Proprietary Limited and are advised to continue to
exercise caution when dealing in the Company’s securities
until a further announcement is made.

26 September 2016
Umhlanga

Corporate Advisor and Designated Advisor
PSG Capital

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