NUTRITIONAL HOLDINGS LIMITED - Update and consumation of the acquisition of Ukusekela

Update and consumation of the acquisition of Ukusekela

Nutritional Holdings Limited
(Registration number: 2004/002282/06)
(Incorporated in the Republic of South Africa)
(Share Code: NUT ISIN Code: ZAE000156485)
(“Nutritional Holdings” or “the Company”)


 UPDATE AND CONSUMATION OF ACQUISITION OF UKUSEKELA


 1.    INTRODUCTION
       Shareholders are referred to the various announcements regarding Nutritional Holdings
       entering into an agreement with The Wellness Trust 29 (“the Trust”) to acquire a 100%
       shareholding in Ukusekela Holdings (Pty) Ltd (“Ukusekela”) for a total consideration of R140
       million payable by a combination of cash and the issue of Nutritional Holdings shares at 4.5
       cents per share (“the Transaction”).

       Due to Covid-19 delays there have been non-fulfilment of certain of the conditions precedent
       and the Transaction has lapsed.

       On 29 September 2020, Nutritional Holdings entered into a new agreement with The Wellness
       Trust 29 to acquire a 100% shareholding in Ukusekela Holdings for a total consideration of
       R65 000 000,00 (Sixty Five Million Rand) payable by a combination of cash and the issue of
       Nutritional Holdings shares at 1.5 cents per share (“the New Transaction”).

 2.    BACKGROUND AND RATIONALE FOR THE TRANSACTION
       The Wellness Trust 29 currently holds 100% of Ukusekela Holding’s shareholding.

       Ukusekela Holdings holds various licenses in Lesotho, Zimbabwe and Swaziland for the
       cultivation, harvesting, manufacturing, distribution, importing and exporting of cannabis as well
       as a research laboratory in South Africa.

       Ukusekela holds an offtake agreement with one of the largest cannabis pharmaceutical
       companies based in Europe which has a license to distribute CBD Oils and infused products in
       more than 15 countries.

 3.    NEW TRANSACTION CONSIDERATION
       The purchase consideration will be R65 000 000,00 (Sixty Five Million Rand) payable by a
       combination of cash and the issue of Nutritional Holdings shares at 1.5 cents per share payable
       as follows:
        •     2 000 000 000 (Two Billion) shares will be issued to Ukusekela Holdings at 1.5 cents per
              share which equates to R30 000 000,00 (Thirty Million Rand); and
        •     R35 000 000,00 (Thirty Five Million Rand) in cash payable by means of a loan from
              Ukusekela Holdings.

       The loan will be repayable to Ukusekela Holdings upon reaching a profit after tax of
       R30 000 000,00 (Thirty Million Rand) per annum over two years for a total profit warranty of
       R60 000 000,00 (Sixty Million Rand) by the financial year ended 2022. The first payment of the
       loan will be on 28 February 2021 and the second payment on 28 February 2022.

       There will be no interest payable by Nutritional Holdings to Ukusekela Holdings for the balance
       outstanding.

 4.    CONDITIONS PRECEDENT

       All conditions precedent have been fulfilled.



 5.    EFFECTIVE DATE
     The effective date of the New Transaction is 1 October 2020, or any other date agreed to by
     the parties.


6.   FINANCIAL INFORMATION OF THE TRANSACTION
     The net value of the assets attributable to the New Transaction was circa R56 000 000,00 (Fifty
     Six Million Rand) as at the 29 February 2020. The profits attributable to the net assets that are
     the subject of the New Transaction, was circa R10 600 000,00 (Ten Million Six Hundred
     Thousand) for the year ended 29 February 2020. This financial information is based on
     unaudited management accounts.


7.   CATEGORISATION
     In terms of the JSE Listings Requirements, the New Transaction constitutes a Category 2
     transaction and therefore Nutritional Holdings’ shareholder approval is not required .




7 October 2020



Designated Advisor to Nutritional Holdings
Exchange Sponsors

Date: 07-10-2020 12:40:00
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