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PROPOSED SPECIFIC REPURCHASE OF SHARES IN HCI BY SIG

Proposed specific repurchase and further acquisition of shares in HCI by SIG1. TERMS OF THE SPECIFIC REPURCHASE, CALL OPTION AND FURTHER ACQUISITION 1.1 Further to the cautionary announcement dated 7 December 2000, Mettle Limited is authorised to announce that agreement has been reached between the controlling shareholders of HCI, namely MICPL, MIC Media Technology Holdings (Proprietary) Limited and Mineworkers Social Benefit Trust (collectively “MIC”) SIG and the Board of Directors of HCI as follows: 1.1.1 HCI will repurchase from MIC 24 069 658 HCI shares (being 6,5% of the issued HCI ordinary shares) at a price of R4,00 per HCI share, plus interest calculated at the appropriate call rate, which shares will be cancelled (“the specific repurchase”) in terms of sections 85 and 89 of the Companies Act, 1973 (Act 61 of 1973), as amended, and the Listings Requirements of the JSE Securities Exchange South Africa (“JSE”); 1.1.2 SIG will acquire from MIC an additional 11 148 986 HCI shares (being 3% of the issued HCI ordinary shares) at a price of R4,00 per HCI shares, plus interest calculated at the appropriate call rate (“the SIG acquisition”); 1.1.3 HCI has an option exercisable before 27 February 2001 to acquire from MIC an additional 35 217 643 HCI shares at R4,00 per HCI share (being 9,5% of the issued HCI ordinary shares), plus interest at the appropriate call rate, (the “call option”); 1.1.4 HCI and SIG have agreed that HCI will simultaneously cede to SIG the right to acquire 11 000 000 HCI shares in terms of the call option so as to ensure that SIG obtains a shareholding in excess of 40% of the issued ordinary shares in HCI should SIG exercise such right. 1.2 The implementation date will be the third business day immediately following the date on which the conditions precedent, as set out below, are fulfilled or, where appropriate, waived, which implementation date shall not be later than 3 April 2001. The listing on the JSE of the 24 069 658 HCI shares repurchased by HCI as well as those HCI shares acquired by HCI in terms of the call option will be terminated at the close of business on the implementation date. SIG will thereafter, if it exercises the call option, hold a minimum of at least 40% of the reduced issued ordinary share capital of HCI. 2. VOTING POOL AGREEMENT The HCI voting pool agreement in terms of which MIC and SIG jointly hold and exercise a controlling stake in HCI will be retained. 3. RATIONALE 3.1 MIC has continually intended HCI to be a long-term strategic investment vehicle. 3.2 In order to, amongst other things, diversify its investment portfolio, MIC has agreed to conclude the disposal of its HCI shares and to grant the call option. 3.3 HCI is agreeable to facilitating MIC’s disposal of its HCI interest through a repurchase of HCI shares because the HCI share currently trades at a considerable discount to the net asset value per share and the transaction, accordingly, enhances the net asset value per share of the remaining HCI shareholders. 3.4 For this reason SIG is also agreeable to the transaction provided that it does not trigger a call on HCI’s shareholding in the Vodacom Group (Pty) Limited (“Vodacom”). Therefore, the parties included in the transaction the condition precedent of the consent of certain Vodacom shareholders and related parties. 4. FINANCIAL EFFECTS The pro forma financial effects of the specific repurchase and the exercise of the call option on net asset value, and headline loss per HCI share, before and after the specific repurchase and the exercise of the call option, are set out below: Effects if the call option is not exercised Change Notes Before After increase Net asset value (Rand) 1 9,20 9,54 3,7% Headline loss (cents) 2 20,7 23,5 13,5% Effects if the call option is exercised Change Notes Before After increase Net asset value (Rand) 3 9,20 9,94 8,04% Headline loss (cents) 4 20,7 26,7 28,9% Notes: 1. The above calculations are based on 384 629 267 HCI ordinary shares in issue before the specific repurchase and 360 559 609 HCI ordinary shares in issue after the specific repurchase, based on the latest reported net asset value of HCI at 18 December 2000. 2. Based on the unaudited HCI results for the six months to 30 September 2000 the amount in the “After” column represents the earnings that would have accrued per HCI ordinary share had the specific repurchase been effective from 1 April 2000, on the assumption that the income on cash balances foregone accrued at an average interest rate of 10,15% per annum. 3. Based on 384 629 267 HCI ordinary shares in issue before the specific repurchase and the exercise of the call option and 336 341 966 HCI ordinary shares in issue after the specific repurchase and the exercise of the call option, based on the latest reported net asset value of HCI at 18 December 2000 4. Based on the unaudited HCI results for the six months to 30 September 2000 the amount in the “After” column represents the earnings that would have accrued per HCI ordinary share had the specific repurchase and the call option been effective from 1 April 2000, on the assumption that the income on cash balances foregone accrued at an average interest rate of 10,15% per annum. 5. FUNDING OF THE SPECIFIC REPURCHASE HCI intends to make use of available cash resources and debt to fund the specific repurchase and exercise of the call option. The Directors have satisfied themselves as to the liquidity and solvency of HCI for the 12-month period immediately following the implementation date. 6. CONDITIONS PRECEDENT The specific repurchase, the call option and the SIG acquisition are subject to, inter alia, fulfilment of the following conditions precedent: 6.1 The specific repurchase and the exercise of the call option being approved by HCI shareholders, excluding MIC and SIG, if so prescribed by the JSE, at the general meeting of HCI shareholders; 6.2 the approval by the Securities Regulation Panel (“SRP”) of a waiver to be proposed to HCI shareholders of any mandatory offer by SIG, if applicable, and such waiver being agreed to by HCI shareholders; 6.3 regulatory approvals or consents necessary to implement the specific repurchase, SIG acquisition and the call option, including but not limited to approvals and consents from the JSE, the SRP and the Exchange Control Department at the South African Reserve Bank; and 6.4 approval by certain Vodacom shareholders and related parties. 7. GENERAL MEETING A general meeting of HCI ordinary shareholders will be held at which the shareholders’ resolutions required to give effect to the specific repurchase and the exercise of the call option will be proposed. Such resolutions will be required to be passed by a majority representing at least three-fourths or a majority, respectively, of the shareholders, other than MIC and SIG if so prescribed by the JSE, present in person or by proxy and voting at the general meeting. A circular to shareholders of HCI setting out details of the specific repurchase, the SIG acquisition and the call option, including a notice of general meeting and form of proxy will be posted to shareholders within 28 days of this announcement. 8. Cautionary announcement 8.1 Shareholders are referred to the cautionary announcement dated 7 December 2000 and are advised that as a result of this announcement the said announcement is now withdrawn. 8.2 Shareholders should, however, note that a number of regulatory approvals still need to be obtained with regard to the proposed specific repurchase, the call option and the SIG acquisition and should continue to exercise caution when dealing in their HCI shares.

Source: HCI