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DISPOSAL OF INTEREST IN DATATEC LIMITED AND FURTHER CAUTIONARY ANNOUNCEMENT

METTLE LIMITED IS AUTHORISED TO ANNOUNCE THAT HCI HAS, SUBJECT TO THE CONDITION PRECEDENT DETAILED BELOW, REACHED AGREEMENT IN TERMS OF WHICH IT HAS DISPOSED OF ITS ENTIRE SHAREHOLDING IN DATATEC LIMITED (“DATATEC”) TO THE PARTIES IDENTIFIED BELOW (“THE DISPOSAL”). 1. RATIONALE HCI IS AN INVESTMENT HOLDING COMPANY THAT HAS SIGNIFICANT EQUITY AND CAPITAL PARTICIPATION IN ENTREPRENEURIALLY – RUN COMPANIES THAT ARE LISTED, HAVE THE POTENTIAL TO BE LISTED, OR ARE GROWING, CASH GENERATING, UNLISTED COMPANIES. A PRIMARY INVESTMENT CRITERION IS THAT HCI MUST BE ABLE TO ADD VALUE TO THE INVESTMENT THROUGH THE PROVISION OF BOTH STRATEGIC LEADERSHIP AND WEALTH CREATION. IN ORDER FOR SUCH VALUE ADD TO BE MEANINGFUL IT IS NECESSARY FOR HCI TO HOLD A SIGNIFICANT EQUITY INTEREST. THE RAPID GROWTH OF DATATEC HAS RESULTED IN THE EQUITY INTEREST OF HCI FALLING BELOW 10% – A HOLDING THAT THE DIRECTORS OF THE COMPANY BELIEVE TO BE INSIGNIFICANT. IT FOLLOWS ON THUS THAT THE ABILITY OF HCI TO CONTINUE TO ADD SUCH VALUE TO DATATEC IS LIMITED. THE DISPOSAL WILL ALLOW HCI TO LIQUIDATE DEBT, RECAPITALISE CURRENT INVESTMENTS AND FACILITATE FURTHER ACQUISITIONS WHEN APPROPRIATE OPPORTUNITIES ARISE. 2. THE DISPOSAL WITH EFFECT FROM 26 APRIL 1999 HCI HAS DISPOSED OF ITS ENTIRE SHAREHOLDING IN DATATEC AS FOLLOWS: NUMBER OF DATATEC PRICE PER DATATEC TOTAL DISPOSAL PURCHASER SHARES ACQUIRED SHARE CONSIDERATION (R) (R) A. INVESTEC GUINNESS FLIGHT LIMITED* 2 100 000 92,50 194 250 000 B. BOE ASSET MANAGEMENT LIMITED* 1 500 000 92,50 138 750 000 C. SACTWU INVESTMENTS GROUP (PROPRIETARY) LIMITED AND AFFILIATES 1 413 666 92,50 130 764 105 D. BUSINESS VENTURE INVESTMENTS NO 201 (PROPRIETARY) LIMITED 2 050 000 92,50 189 625 000 7 063 666 – 653 389 105 * FOR AND ON BEHALF OF CLIENTS THE DISPOSAL CONSIDERATION WILL BE SETTLED IN CASH. 3. DATATEC DATATEC IS A LEADING INTERNET-FOCUSED NETWORKING TECHNOLOGY AND SERVICES COMPANY. ALTHOUGH ORIGINATING IN SOUTH AFRICA, THE GROUP HAS QUICKLY ESTABLISHED BUSINESS OPERATIONS THAT SPREAD ACROSS THE GLOBE. THE PRINCIPAL FOCUS OF DATATEC IS TO EXPLOIT THE OPPORTUNITIES PROVIDED BY THE EXPLODING INTERNET/INTRANET MARKETPLACE AND AS A RESULT IT HAS BECOME A MAJOR INTERNET-ORIENTATED TECHNOLOGY GROUP, FOCUSING ON NETWORKING AND RELATED PRODUCTS AND SERVICES. THE BUSINESSES OF DATATEC NOW ENCOMPASS THE PROVISION OF INFORMATION TECHNOLOGY SOLUTIONS AND SERVICES (INCLUDING SYSTEMS INTEGRATION, SOFTWARE DEVELOPMENT AND TRAINING), WORLD-WIDE DISTRIBUTION OF ADVANCED NETWORKING PRODUCTS, AND A RANGE OF VALUE ADDED SOLUTIONS BASED AROUND NETWORKING AND INTERNET TECHNOLOGY. 4. FINANCIAL EFFECTS THE TABLE BELOW SETS OUT THE FINANCIAL EFFECTS OF THE DISPOSAL BASED ON THE FOLLOWING ASSUMPTIONS: * THE DISPOSAL WAS EFFECTIVE FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1998; * THE EFFECTIVE DATE OF THE DISPOSAL WAS 1 APRIL 1998; * THE WEIGHTED AVERAGE NUMBER OF ORDINARY HCI SHARES IN ISSUE WAS 347 477 000; * THE ACTUAL NUMBER OF ORDINARY HCI SHARES IN ISSUE WAS 353 157 000; * DEBT OF R475 822 896 WAS EXTINGUISHED; * INTEREST EARNED ON POSITIVE CASH BALANCES WAS 18% (BEFORE TAX); AND * ALL FINANCIAL EFFECTS ARE EXPRESSED IN CENTS PER SHARE UNLESS OTHERWISE INDICATED. PER HCI ORDINARY SHARE BEFORE AFTER % CHANGE EARNINGS * BEFORE NON-RECURRING ITEMS 0,7 4,2 502,5 * AFTER NON-RECURRING ITEMS 12,9 16,4 27,1 NET ASSET VALUE * INVESTMENTS AT COST (R) 3,2 4,3 31,8 * INVESTMENTS AT MARKET/DIRECTOR’S VALUE (R) 6,8 7,4 8,2 5. CONDITION PRECEDENT THE DISPOSAL IS SUBJECT TO REQUISITE APPROVALS BEING OBTAINED FROM THE JOHANNESBURG STOCK EXCHANGE (“JSE”). 6. CIRCULAR A CIRCULAR, WHICH IS SUBJECT TO JSE APPROVAL, PROVIDING FULL DETAILS OF THE DISPOSAL WILL BE DISPATCHED TO SHAREHOLDERS WITHIN 28 DAYS OF THIS ANNOUNCEMENT 7. FURTHER CAUTIONARY ANNOUNCEMENT SHAREHOLDERS ARE REFERRED TO THE CAUTIONARY ANNOUNCEMENT PLACED IN THE PRESS ON 21 APRIL 1999, AND ARE ADVISED THAT THE COMPANY CONTINUES TO INVESTIGATE VARIOUS METHODS OF DISTRIBUTING CERTAIN OF ITS LISTED INVESTMENTS TO ITS SHAREHOLDERS.

Source: HCI