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CONAFEX - DISPOSAL BY CONAFEX OF THE 50% INTEREST IN COFFEE TEA AND CHOCOLATE COMPANY (PTY) LTD (`CTC`) CONAFEX HOLDINGS SOCIETE ANONYME (Incorporated in Luxembourg RC Luxembourg No. B 17789) (`Conafex`) JSE CODE: CNX ISIN: LU0167907293 Disposal by Conafex of the 50% interest in Coffee Tea and Chocolate Company (Pty) Ltd (`CTC`) 1. INTRODUCTION Imara Corporate Finance South Africa (Pty) Limited is authorised to announce that Conafex has disposed of 50% of the issued share capital in CTC (`the Disposal`) to Southern Super Foods (Pty) Ltd (`SSF`) for cash. 2. NATURE OF BUSINESS AND RATIONALE Conafex is a pan-African agri-resource group listed on the Luxembourg Stock Exchange and the JSE and focuses on horticulture, niche and value added agriculture. CTC packs tea and coffee under its own well-known brands that are sold through the leading retail chains in South Africa. Conafex previously acquired the 50% interest in CTC from SSF, which then became the co-shareholder in CTC. The acquisition was effective from the 1st of July 2002. The current attractive offer price led to the decision by Conafex to now dispose of its investment in CTC back to SSF. The funds received will be invested in South Africa, in line with the overall Conafex Group strategy, in businesses where there are better growth prospects. 3. SALIENT TERMS OF THE DISPOSAL In terms of the agreement: - The effective date of the disposal is the 1st of October 2004; - Conafex will sell 50% of the issued share capital of CTC to SSF, including all sums of whatsoever nature and howsoever arising and owing to Conafex by CTC, on the effective date. 4. SALIENT CONDITIONS PRECEDENT - Unconditional fulfilment of the terms and conditions in an agreement whereby Continental Beverages (Pty) Ltd purchased the business conducted by CTC. - Unconditional fulfilment of the terms and conditions in an agreement whereby Continental Beverages (Pty) Ltd purchased the business conducted by Frucon Food and Beverage Company (Pty) Ltd. - Unconditional fulfilment of the terms and conditions in an agreement whereby Retail Brands InterAfrica (Pty) Ltd purchased the business conducted by FMCG Logistics (Pty) Ltd. - Unconditional approval of the Competition Commission and/or the Competition Tribunal, as the case may be, constituted in terms of the Competition Act, No. 89 of 1998, as amended. 5. DISPOSAL CONSIDERATION The disposal consideration for the Disposal is R11 000 000, payable in full upon fulfilment of the conditions precedent. 6. FINANCIAL EFFECTS OF THE TRANSACTION The table below is shown in accordance with the rules of the JSE Securities Exchange of South Africa and is for illustrative purposes only. The table sets out the pro forma estimated financial effects on each Conafex share, in South African cents, of the Disposal. The calculations were based on the 31 August 2004 unaudited results of Conafex and on the basis that the transaction had been concluded at the beginning of the financial year. Financial Before the After the Percentage Effects disposal disposal change EPS (cents) (789.42) (745.10) 5.61% HEPS (cents) (12.66) (12.66) 0.00% NAV per 602.51 646.83 7.36% share (cents) NTAV per 179.97 282.38 56.90% share (cents) 1.The information in the `before` column is based on Conafex`s unaudited results for the year ended 31 August 2004. 2.The calculation of the effects on earnings per share (`EPS`), headline earnings per share (`HEPS`), net asset value per share (`NAV`) and net tangible asset value per share (`NTAV`) have been based on the following assumptions: a) that the disposal occurred at the beginning of the year, being 1 September 2003. b) Adjustments were made for the negative goodwill realised on acquisition as well as the write-off of intangible assets by CTC, to comply with the Conafex Group accounting policies c) A capital gains tax rate of 15% was applied to the profit on disposal. d) It was assumed that the R 11 000 000 proceeds were re-invested at a notional interest rate of 7.11% and tax rate of 30%. e) The weighted average number of shares remained unchanged at 5 420 152. f) The assumed exchange rate for the Rand to the US$ is 6.6. Documentation The disposal constitutes less than 20% of the consideration to market capitalisation ratio and is categorised as a Category 3 transaction by the JSE Securities Exchange South Africa. Thus, this announcement appears for information purposes only. The transaction is at arms length and does not require shareholder approval or a circular to be sent to shareholders. By order of the Conafex Board 13 January 2005 South African sponsor and corporate Advisor Imara Corporate Finance South Africa (Pty) Ltd
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