Kakuzi Regulatory News (KAKU)

10 May 2007 14:55

Kakuzi Ld10 May 2007 KAKUZI LIMITED PUBLIC ANNOUNCEMENT Proposed Sale of Siret Tea Company Limited The attention of the Directors of Kakuzi Limited ("Kakuzi") has been drawn tothe special report published in the Standard newspaper on 1st May 2007 entitled"Shareholders claim shell game at Kakuzi". This report entirely misrepresentsthe nature of the proposed Siret Tea transaction and contains a number ofmaterial inaccuracies. As required under the continuing disclosure obligationsof the Capital Markets (Securities) (Public Offers, Listing and Disclosure)Regulations 2002, the Directors wish to provide the following clarifications. 1. The principal activities of Kakuzi comprise the following: • The growing and marketing of avocados • The cultivation, manufacture and marketing of tea • Livestock farming • Jointly controlled operations dealing with growing of pineapples • Growing of other horticultural crops including citrus, fresh pineapples and macadamia nuts • Forestry development 2. These activities are undertaken on Kakuzi's various properties situated at: (a) Makuyu comprising 14,170 hectares of land including an Avocado pack house and a timber treatment plant; and (b) Nandi Hills comprising 1,954 hectares of land including the Siret Tea factory and Estate (comprising 982 hectares) and Kaboswa Tea Estate (comprising 972 hectares). 3. EPK Outgrowers Empowerment Project Company Limited (the "EmpowermentCompany") was incorporated on 3rd March 2006 (certificate of incorporation No.C.2/2006) with the following founder members and directors: • Mr. Wilson Malakwen Tuwei • Mr. Paul Kipserem Tiony • Mr. Paul Mugun Ngetich • Mr. Daniel Kimutai Rotich • Mr. Ketan Rameshchandra Shah • Mr. Shabbir Hassanali Maloo • Mr. Graham McLean • Mr. Ken William Tarplee 4. At the time of incorporation, the Siret Tea transaction was not undercontemplation. The Empowerment Company was formed as an initiative designed toassist outgrowers in the sale of tea under the umbrella of the Fair TradeLabelling Organisation. The Fair Trade Labelling Organisation facilitates thesustainable development and empowerment of disadvantaged producers by being paida fair price for their produce. The Kakuzi and Eastern Produce Kenya Limited ("EPK") representatives were included to assist in the achievement of thisobjective. 5. When the Siret transaction was under negotiation, it was consideredthat the Empowerment Company would provide a suitable vehicle for theacquisition by the outgrowers. At no time was it the intention that anyDirector of Kakuzi or EPK would have any beneficial interest in the EmpowermentCompany. The allegation that they are seeking to benefit from the sale of theSiret Tea Estate is scurrilous and completely unfounded. 6. The Kakuzi / EPK directors resigned from the Empowerment CompanyBoard on 10th April 2007 prior to the execution of the Framework Agreement and,at the same time, the Company Secretary was instructed to proceed with thetransfer of their subscriber shares to representatives of the outgrowers.Particulars of the Directors resignations were filed with the Registrar ofCompanies together with other associated changes in company secretary andregistered office. The changes in shareholdings will be reflected when the nextAnnual Return is filed. 7. The Directors of Kakuzi wish to confirm that the proceeds from thesale of Siret Tea Company Limited will be utilized to reduce the current levelof Kakuzi's borrowings and to finance the planned horticultural developmentwhich has recently commenced at Makuyu. 8. The Directors of Kakuzi wish to emphasise that the Siret Teatransaction remains subject to the obtaining of all necessary approvals,including shareholder approval at the forthcoming Annual General Meeting. TheFramework Agreement is available for inspection at Kakuzi's head office by anyshareholder. The Directors will be pleased to address any shareholder concernsat the Annual General Meeting. G H Mclean Group Managing Director Nairobi 9th May 2007 This information is provided by RNS The company news service from the London Stock Exchange