Conditional Placing

Masawara plc

("Masawara" or the "Company")

Proposed placing of up to 24,102,564 new Ordinary Shares at 97.5 cents per share and notice of Extraordinary General Meeting.

Masawara is pleased to announce a proposed placing of 24,102,564 new Ordinary Shares at a price of 97.5 cents per share (the "Placing") raising approximately $23.5 million (£14.5 million) before expenses.

The Placing is conditional on the approval of Shareholders at a General Meeting to be held at noon on 9 May 2011 at the offices of the Company Secretary, Computershare, Queensway House, Hilgrove Street, St. Helier, Jersey JE4 9XY, notice of which has been posted to shareholders of the Company today, and Admission. A copy of the circular will be made available on the Company's website at www.masawara.com

Background to the Placing and use of proceeds

It is intended that the funds raised in the Placing will primarily be applied toward the following initiatives:

·; The Investment Adviser is currently assessing an opportunity in the minerals and resources sector. The opportunity is a proposed acquisition by Masawara of an interest in a chrome mining and smelting operation in Zimbabwe. The operation also has extensive mining claims in Zimbabwe, predominantly in the chrome belt, and it is intended to surface mine viable claims . A memorandum of understanding has been signed and detailed due diligence is underway. The total investment is not expected to exceed $12.1 million.

·; Recognising the potential value yet to be unlocked in certain of Masawara's existing investments, the Company proposes to increase its interest in those investments and drive value enhancing restructuring and reorganisation strategies within these investments.

·; In line with Masawara's investing policy, targeting investment opportunities in high growth sectors in Zimbabwe and the region, that the Investment Adviser consider will achieve a minimum IRR of 25%.

Since admission of the Company to trading on AIM, it has successfully implemented its investing policy and has invested in two notable businesses, both of which offer significant upside. In January 2011, the Group acquired 50% of Telerix Communications (Private) Limited ("Telerix"), an Internet Service Provider in Zimbabwe which holds a licence to construct, operate, develop and maintain a public data internet access and Voice over Internet Protocol (VoIP) network in Zimbabwe. Telerix intends to expand its services, in accordance with this licence, to include:

·; the wholesaling of international bandwidth to corporate customers and other Internet Service Providers in Zimbabwe; and

·; the establishment of fixed, nomadic and ultimately fully mobile broadband services via fibre optic and WiMAX network architecture.

In addition, Telerix has a 20 year capacity purchase agreement with a local long distance dark fibre operator, to connect its network operations centre in Harare to the SEACOM East African fibre optic cable ("SEACOM") that terminates on the Mozambique side of the Forbes Border Post in Mutare. Telerix also plans the roll-out of a Fourth Generation ("4G") network to provide a "last mile" solution for Internet customers initially in Harare and then to the other main centres in Zimbabwe.

In March 2011, Masawara successfully completed the acquisition of BP Zimbabwe (Private) Limited ("BP Zimbabwe") and Shell Zimbabwe (Private) Limited ("Shell Zimbabwe"). Collectively, BP Zimbabwe and Shell Zimbabwe own some of the largest petroleum product infrastructure in Zimbabwe, with one of the widest distribution networks comprising in excess of 70 retail sites and 10 depots. The acquisition was financed through a combination of internal cash resources and third party structured funding arrangements. Masawara will hold an effective economic interest of 51%.

With the underlying infrastructure of BP Zimbabwe and Shell Zimbabwe remaining largely intact, the Directors believe that a significant recovery in the underlying businesses is achievable in the short-term, and the acquisition will provide considerable additional value to Masawara shareholders as the business regains its leading position.

The Company qualifies as an indigenous Zimbabwean for the purposes of the IEE Act and is not currently restricted from acquiring majority control of any Zimbabwean company or business. Masawara intends to remain indigenous and the Directors believe that doing so will enable the Company to exploit additional opportunities.

The Placing

The Company is proposing to raise, in aggregate, $23.5 million (before commissions and expenses) by means of the Placing.

The Placing is conditional on:

·; the approval at the Extraordinary General Meeting, notice of which has been posted to Shareholders today, of resolutions proposed in connection with the Placing;

·; the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

·; admission of the Placing Shares to trading on AIM,

in each case by no later than 8.00 a.m. on 10 May 2011 (or such time and date as the Company and Cenkos may agree, being not later than 23 May 2011.  A copy of this circular will be made available on the Company's website at www.masawara.com.

The Placing Shares will, when issued, rank pari passu in all respects with the existing issued Ordinary Shares including the right to receive dividends and other distributions declared following Admission.

Significant shareholders following the Placing are set out below:

NB. FMI Holdings is a vehicle owned by Shingai Mutasa, director of Masawara plc.

Results

The results in respect of the financial year ended 31 December 2010 were announced on 19 April 2011. In accordance with International Financial Reporting Standards, the audited results were in respect of a full year, despite the fact that the Company was only incorporated in June 2010 and listed in August 2010 as the Company was treated as a continuation of the previous group, FMI Zimbabwe (Private) Limited. The group recorded a loss for the full year of $2.2 million, with performance being adversely affected by the imputing of interest on shareholders' loans that were capitalised prior to listing, and a poor performance by associate company, TA Holdings Limited.

 As at 31 December 2010, shareholders' equity amounted to $60.8 million, and the group held cash and cash equivalents of $11.5 million. A deposit of $8 million had also been paid in respect of the acquisition BP Zimbabwe and Shell Zimbabwe.

 Subsequent to the financial year-end, the acquisition of BP and Shell was finalised, and an investment was made into Telerix. The financial impact of these acquisitions will therefore only be fully reflected in the group's interim results to be released in September 2011.

Extraordinary General Meeting

The Extraordinary General Meeting of the Company is to be held at the offices of the Company Secretary, Queensway House, Hilgrove Street, St. Helier, Jersey JE4 9XY on 9 May 2011 at 12 noon.

The purpose of the Extraordinary General Meeting is to consider the following resolutions:

·; A resolution to give the Directors authority, pursuant to the Articles, to allot the Placing Shares, such authority being in addition to all existing authorities. This resolution is being proposed as an ordinary resolution.

·; A resolution to give the Directors authority, pursuant to the Articles, to allot the Placing Shares as if the pre-emption provisions in the Articles did not apply to such allotment, such authority being in addition to all existing authorities. This resolution is being proposed as a special resolution.

Under Jersey law and the Articles, an ordinary resolution requires to be passed by a simple majority of the shareholders who (being entitled to do so) vote in person, or by proxy, at the Extraordinary General Meeting. A special resolution requires to be passed by a majority of three-quarters of the shareholders who (being entitled to do so) vote in person, or by proxy, at the Extraordinary General Meeting.

Admission and Dealings

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will occur on 10 May 2011.

The City Code

Whilst the City Code does not apply to the Company, the articles of association (the "Articles") contain provisions substantially similar to Rule 9 of the City Code. Under the Articles, a party may acquire interests in Ordinary Shares which taken together with Ordinary Shares in which the party and its concert parties (if any) are already interested, carry more than 30% of the voting rights in the Company, without making an offer for the Ordinary Shares not owned by it, if the Board has given its written consent to such further acquisition of interests in Ordinary Shares. Following the Placing, Invesco will hold 42.4% of the total issued share capital. The Board has given consent in writing to Invesco to subscribe Placing Shares which together with its existing interests would carry more than 30% of the voting rights in the Company without Invesco making an offer for the Ordinary Shares not owned by it.

Related Party Transaction

Invesco has conditionally agreed to take up 22,566,667 Placing Shares. The placing of new Ordinary Shares with Invesco is a related party transaction under the AIM Rules. The Directors consider, having consulted with Cenkos as the Company's nominated adviser, that the terms of the placing with Invesco are fair and reasonable so far as Shareholders are concerned.

Contact details

Masawara plc

Oliver Lutz/Rutendo Maziva +263 4 751805

Cenkos Securities plc (Nominated adviser and broker)

Nicholas Wells/Max Hartley /Elizabeth Bowman +44 20 7397 8900