Investment

Masawara plc ("Masawara" or the "Company")

Investment

Masawara is pleased to announce that it has concluded the acquisition of a 50% shareholding in Telerix Communications (Private) Limited ("Telerix" or "the Group"). Consideration for the acquisition will be US$5 million for which Masawara will receive ordinary shares in Telerix through a private placing. Following the initial investment, Masawara will invest a further US$2 million through a subscription for preference shares, this is expected to be made in February 2011.

Telerix is currently operating as an Internet Service Provider ("ISP") in Zimbabwe and is operated by a very experienced management team who will be key in the future growth of the business. In the six months to 30 June 2010, the Group incurred an audited loss after tax of $904,000. These results included extraordinary expenses pertaining to the new projects discussed below, that are considered one off and will not affect future years.

In July 2009 a wholly owned subsidiary of Telerix was awarded an "Internet Access Provider Class A Licence" by the Postal &Telecommunications Regulatory Authority of Zimbabwe ("POTRAZ"). This licence allows Telerix to construct, operate, develop and maintain a public data internet access and Voice over IP 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.

Telerix has a 20 year Capacity Purchase Agreement contract 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. This Capacity Purchase Agreement will provide 620Mb per second of bandwidth to the company. The fibre link to SEACOM is expected to be operational during February 2011.

Following the initial investments made in securing the 20 year capacity purchase agreements with SEACOM and the long distance dark fibre operator, as at 30 June 2010 Telerix held total non-current assets of US$11.3 million.

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.

Funds invested by Masawara will be applied by Telerix to fund:

·; the Capacity Purchase Agreement to link to the SEACOM undersea cable in Mozambique; and

·; developing a fast, simple, reliable and nomadic 4G network to allow end user connectivity to the Internet.

The US$5 million private placing will be completed on 31 January 2010. In addition, Masawara will provide a further US$2 million through a subscription for preference shares on the following terms:

·; The preference shares carry a coupon of 8% per annum;

·; The preference shares mature on 30 November 2012; and

·; In the event that the company cannot fund redemption of the preference shares, they will be converted into ordinary shares in Telerix.

Shingai Mutasa, Chief Executive commented: