Wrap Text
Disposal Of Non-Core Cannabis Assets And Withdrawal Of Cautionary
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
("Labat Africa" or "the Company")
ISIN Code: ZAE000018354 Share Code: LAB
FSE Code: LEI 9845000R73DF5EE41J88
DISPOSAL OF NON-CORE CANNABIS ASSETS AND WITHDRAWAL OF CAUTIONARY
Shareholders are hereby advised that, further to the Company's previously communicated
strategic review, the Board is pleased to announce the disposal of its cannabis-related
assets and operations. This decision aligns with Labat's strategic repositioning as a
technology-focused investment platform.
Shareholders are referred to the previous cautionary SENS announcements published on 15
July 2025, 26 August 2025 and 9 October 2025, wherein the Company advised that it
entered into negotiations with All Trading Proprietary Limited ("the Purchaser"), a related
party to the Company, for the disposal of Labat's equity interests in some of the Company's
subsidiaries, which if successfully concluded, may have a material effect on the price of the
Company's securities.
The Board wishes to confirm that negotiations with All Trading have since been terminated.
Following the termination, the Company has entered into a binding agreement with 64P
Investments Proprietary Limited for the purchase of all the cannabis-related subsidiaries and
operating divisions within the Labat Group. 64P Investments is wholly owned by 64P Family
Trust with the beneficial owner being Mr Hymie Pedro who is not a related party, nor are any
of the trustees of the trust, as defined in the JSE Listings Requirements, and the Board believes
that the finalised transaction represents a more favourable commercial outcome for
shareholders.
Details of the Disposal
The Company has commenced a process to dispose of its non-core cannabis-related
subsidiaries and business units as part of its strategic decision to exit the cannabis sector and
focus on its core expansion strategy into the Technology and Data Solutions sectors.
The Board of Directors is pleased to advise that the Company has concluded negotiations
for the disposal of all its shareholding in the following subsidiaries and operating divisions:
• CannAfrica Proprietary Limited
• BioData Proprietary Limited
• Lima Romeo Air Proprietary Limited
• The Highly Creative Proprietary Limited
• African Cannabis Enterprises Proprietary Limited
• Labat Chem (trading as Labat Healthcare)
Consideration
The parties have concluded a binding agreement for a total disposal consideration of R23
000 000 (twenty-three million rand). This represents a significant premium to both the net
asset value and the independent valuation range obtained for the benefit of Labat
shareholders.
The total NAV of the cannabis-related assets amounts to R5 285 864, with a profit attributable
to these assets of R17 522 268 for the reporting period. An independent valuation from a JSE
accredited expected placed the indicative valuation between R15 million and R17 million.
The negotiated disposal price of R23 million therefore represents a material premium to both
NAV and the independent valuation range, and the Board has determined that the
transaction is in the best interests of shareholders.
The purchase price shall be settled by a monthly payment by the Purchaser and a surety at
the Effective Date.
Category Classification
in terms of the JSE Listings Requirements, the transaction is classified as a Category 2
transaction, calculated as follows:
Metric Amount
Shares in issue 1,132,375,595
Treasury shares 2, 810,203
Issued shares less treasury 1,129,565,392
Share price R0.09
Market capitalisation R101,660,885
Disposal value R23,000,000
Category % ±22,62%
In terms of the JSE Listings Requirements, this constitutes a Category 2 transaction and
therefore does not require shareholder approval. The purchaser, 64P Investments (Pty) Ltd,
is not a related party as contemplated in the Listings Requirements.
Rationale and Use of Proceeds
The Disposal aligns with the Group's strategic realignment to divest from non-core
operations and redeploy capital into its core AI, Technology, and Data Solutions businesses.
The proceeds from the Disposal will be applied towards working capital, settlement of
outstanding loan accounts, balance sheet strengthening, and targeted acquisitions within
the Company's core sectors.
Fairness and Reasonableness
Although not required for a Category 2 transaction, the Board commissioned an
Independent Fairness and Reasonableness Opinion, which confirmed that the terms of the
Disposal are fair and reasonable to shareholders.
Having considered the premium achieved, the non-related party status of the purchaser,
and the strategic benefit of a complete exit from the cannabis sector, the Board believes
that the Disposal is fair, reasonable, and in the best interests of shareholders.
Conditions Precedent
The Disposal remains subject to the fulfilment of the following conditions precedent:
• Any shareholder or regulatory approvals required in terms of the Companies Act, 71
of 2008, or the JSE Listings Requirements; and
• Compliance with the JSE Listings Requirements relating to Category 2 transactions.
Effective Date
The effective date of the Disposal will be the first business day after the date of the fulfilment
of all the above conditions precedent.
Cautionary withdrawal
Shareholders are advised that as negotiations have been concluded caution is no longer
required to be exercised when dealing in the company's securities.
By order of the Board
JOHANNESBURG
23 October 2025
JSE Sponsor
Vunani Sponsors
Date: 23-10-2025 05:15:00
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