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Proposed Issue of Shares for Cash

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02 Sep 2011

SacOil Holdings Limited

(Incorporated in the Republic of South Africa)

(Registration number 1993/000460/06)

JSE share code: SCL

AIM share code: SAC

ISIN: ZAE0000127460

("SacOil" or "the Company")

Proposed specific issue of equity to raise R75 000 000

and Cautionary announcement

1. Proposed specific issue of shares for cash

SacOil shareholders ("Shareholders") are advised that SacOil is proposing, subject to Shareholder and regulatory approvals,

  • a specific issue of ordinary shares of no par value in SacOil ("Ordinary Shares") to Timtex Investments (Proprietary) Limited ("Timtex"), an associate of Encha Group Limited (currently a material shareholder in SacOil holding 36.01% of the issued Ordinary Shares) and a related party in terms of the JSE Limited("JSE")Listings Requirements. Timtex holds 4.96 per cent in the issued capital of SacOil. Timtex has signed an irrevocable undertaking to subscribe for 111 940 298 new Ordinary Shares at an issue price of 67 cents per share ("the Issue Price"), being the closing price of an Ordinary Share on 29 August 2011, the day before Timtex signed such irrevocable undertaking ("the Signature Date")("the Specific Issue").

The proceeds of R75 000 000 from the proposed Specific Issue have already been received by SacOil, and will be utilised to fund the Company`s operations and projects.

The Issue Price will be at a premium to the weighted average traded price of SacOil securities over the thirty business days prior to the Signature Date. A promoter`s fee of R1 500 000 will also be paid to Encha in terms of a letter of agreement between SacOil and Encha which entitles Encha to a promotor`s fee equal to 2 per cent of gross equity raised through introduction by Encha. The agreement to pay such fee, which is subject to the approval of the Specific Issue by Shareholders, is considered to be a related party transaction pursuant to the AIM Rules for Companies because Encha is a substantial shareholder in the Company.

The directors of SacOil, having consulted with the Company`s nominated adviser, finnCap, consider that the terms of such agreement are fair and reasonable insofar as the Shareholders are concerned.

2. Pro forma financial effects of the Specific Issue

The table below sets out the unaudited pro forma financial effects of the Specific Issue on SacOil`s basic earnings, headline earnings, net asset value and tangible net asset value per Ordinary Share. The unaudited pro forma financial effects have been prepared to illustrate the impact of the Specific Issue on the audited, published financial information of SacOil for the year ended 28 February 2011, had the Specific Issue occurred on 1 March 2010 for income statement purposes and on 28 February 2011 for balance sheet purposes.

The pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards and that are consistent with those applied in the audited, published financial statements of SacOil for the year ended 28 February 2011.

The unaudited pro forma financial effects set out below are the responsibility of the Directors and have been prepared for illustrative purposes only and because of their nature may not fairly present the financial position, changes in equity and results of operations or cash flows of SacOil after the Specific Issue.

 

Before the Specific Issued Published

1

After the Specific Issue Pro forma

2

% Change

Loss per share (cents)

(6.67)

(5.57)

(16.49)

Diluted loss per share (cents)

(6.21)

(5.57)

10.30)

Headline loss per share (cents)

(6.62)

(5.57)

(15.80)

Diluted headline loss per share (cents)

(6.16)

(5.57)

(9.56)

Weighted average number of shares in issue (000’s)

449 628 622

561 568 920

24.90

Weighted average number of shares in issue for dilution (000’s)

482 933 133

561 568 920

16.28

Net asset value per share (cents)

69.57

69.09

(0.69)

Net tangible asset value per share (cents)

11.03

18.88

71.17

Number of shares in issue (000’s)

674 090 410

786 030 708

16.61

Notes:

1. The "Before the Specific Issue" basic loss, diluted loss, headline loss and diluted headline loss per ordinary share have been extracted without adjustment from the audited, published results of SacOil for the year ended 28 February 2011. The "Before the Specific issue" net asset value and net tangible asset value per Ordinary Share have been calculated from the financial information presented in the audited, published results of SacOil for the year ended 28 February 2011.

 2. The "After the Specific Issue" is based on:

a. Issue of 111 940 298 new Ordinary Shares at 67 cents per ordinary share, being the closing price of SacOil Ordinary Shares on 29 August 2011; and

b. Estimated transaction costs of R1, 5m in relation to the Specific Issue.

3. Documentation

A circular, setting out the full terms of the Specific Issue and incorporating a notice convening a general meeting of Shareholders of Ordinary Shares to approve the implementation of the Specific Issue will be posted on or about 30 September 2011.

4. Cautionary Announcement

Shareholders are advised that the Company is considering various proposals and potential transactions, which if successfully concluded, may have a material effect on the price of SacOil`s securities. Accordingly, Shareholders are advised to exercise caution when dealing in the Company’s securities until a further announcement is made in this regard.

 Johannesburg

2 September 2011

 Sponsor

The Standard Bank of South Africa

 For further information, please contact:

SACOIL

United Kingdom Enquiries

Tavistock Communications

Jos Simson/ Ed Portman                                                                    

+44 (0)20 7920 3150

South African Enquiries

The Riverbed Agency

Raphala Mogase                                                                                

+27 (0) 11 783 7903

finnCap Ltd

(Nominated Adviser and Joint Broker to SacOil)

Matthew Robinson/Ed Frisby                                                 

+44 (0) 20 7600 1658

Shore Capital Stockbrokers Ltd

(Joint Broker)

Jerry Keen/Dru Danford                                                                    

+44 (0) 20 7408 4050