Sharemax: Statement by the Board of Directors of Zambezi Retail Park

OUTCOME OF ARBITRATION BETWEEN ZAMBEZI RETAIL PARK AND CAPICOL

Following the ruling of the arbitrator in the case between Zambezi Retail Park (Zambezi) and Capicol - an arbitration forced by Zambezi as it disputed the purchase price claimed by Capicol - the Board of Directors will now focus on the options available to secure the funding of the R64,5 million and ensure that the property is transferred to the investors as soon as possible.

Zambezi sought the arbitration as the two parties could not come to an agreement on the outstanding figure. Capicol stated that an amount of R178 million was owed, and Zambezi contested this as being too high. Zambezi sought arbitration in order for the full lease agreements to be made available and for their value to be determined by the arbitrator.

The value of the lease agreements is instrumental in determining the final purchase price of the property and the adjustment amount to be paid to Capicol - as documented in the Zambezi prospectuses. Full funding for the property cannot be obtained from investors until the purchase price is agreed as this could have resulted in over subscription, in other words, over funding.

The Zambezi Board is now urgently looking at available funding options, including bank finance, to ensure the fastest possible resolution so that the property can be transferred to investors and income payments from the rental agreements can commence.

Agreement on the best financing option is expected this year, with transfer to investors in 2011.