Proposed Acquisition Of Vipingo Estate Limited


REAVipingo Plantations Limited ("RVP") announces that it has agreed to acquire the whole of the issued share capital of Vipingo Estate Limited ("VEL').

At the time of RVP's formation in 1995, the land owned by VEL was split into two parts: the Vipingo Estate (incorporating substantially all the areas at Vipingo under sisal) which was acquired by RVP from VEL at that time and other land which was retained by VEL.

Subsequently, VEL has divested much of the land area which it retained but certain parts remain. These include an area of approximately 330 hectares on which, by agreement with VEL, RVP currently cultivates sisal. The land retained by VEL also includes a number of plots close to the Indian Ocean. In the opinion of the directors of RVP, acquisition of these assets through VEL will provide a useful addition to RVP's Vipingo estate.

The directors contemplate that part of the area close to the ocean can be developed to provide new management housing for the estate to replace existing management housing which is held on leases which will expire within 2 years.

The consideration for the acquisition is estimated to amount to $5.3 million but will be subject to adjustment by reference to the assets of VEL at completion. The consideration will be settled as to an estimated $2.1 million in cash and as to the balance by assumption of liability for repayment of balances owed by the vendor and its associates to VEL

The net assets of VEL at completion will comprise the property assets and receivables from the vendor and its associates referred to above, together with other short term receivables and cash with a projected aggregate book value of $6.3 million.

By Order of The Board
1st August 2008

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