Half-yearly report

Africa Opportunity Fund Limited (AOF.L) Announcement of Unaudited Interim Results for the 6 month period to 30 June 2009 Africa Opportunity Fund Limited ("AOF" or the "Company"), the closed-ended investment company which aims to achieve capital growth and income through investments in value, arbitrage, and special opportunities derived from the continent of Africa announces its unaudited results for the 6 month period to 30 June 2009. Highlights: * AOF's net asset value per share of US$0.615 increased 21% from the 31 December 2008 net asset value per share of US$0.511. * As at 30 June 2009, AOF's investment allocation was 50% listed equities, 40% Debt and 10% cash. * Dividends in the amount of $0.0026 per share were paid on 8 April 2009 and 8 July 2009. * AOF generated basic earnings per share of US$0.109 during the first six months of 2009. * AOF initiated a tender offer which closed on 26 February 2009. * A distribution of US$0.3705 per share, net of fees, was made to the exiting shareholders on 30 June 2009. Investment Manager's Statement NAV Performance and Market Conditions: The first half of 2009 was eventful for AOF's portfolio, in what was generally an upbeat six month period for world markets. The NAV was $0.62 per share as of 30 June, a rise of 21% from where it began 2009 and a rise of 21% from where it began Q2. As a reference, in USD terms during the first half of 2009 the S&P 500 rose 2%, South Africa rose 25%, Egypt rose 22%, but Kenya declined 4%, and Nigeria declined 21%. Portfolio Highlights: During the period our holdings in Moto Goldmines and Addax Petroleum were the subject of agreed takeover bids. In the case of Moto, the Canadian listed Red Back Mining made an all-share offer on 1 June which represented a 46% premium over the then current share price and a transaction valued at $525 million. Subsequent to 30th June Randgold Resources announced a cash and shares offer in conjunction with Anglogold Ashanti that was a slight improvement in value but offered the certainty of a partial cash payment. Year to date AOF has earned a 172% return on its Moto investment. In the case of Addax, the China Petroleum Corporation (Sinopec) made an all-cash offer on 24 June which represented a 47% premium over the share price prior to disclosure on 5 June by Addax that it was in discussions with potential acquirers. The transaction is valued at $8.8 billion and was described as "transformational" by Sinopec. It is a remarkable turn of events from the end of last year. In November, for example, AOF purchased convertible bonds in Addax at less than 50% of par and we purchased shares in Addax at less than $20. The bonds have a change of control put and will be redeemed at par as part of the transaction, and the takeover price for the shares of $52.80 represents a 133% return from where Addax shares began the year. Also during the period, one of our fixed income holdings, Katanga Mining, appreciated 70% in value to 65% of par from a low of 35% in March. This was the result of Glencore's announcement that it would underwrite a $250 million equity rights offering, meaning that this new money would support the company in a junior position to AOF's bonds. While the transaction resulted in Glencore acquiring ownership in the range of 78% of Katanga's outstanding equity, it represents a substantial commitment to Katanga and to the DRC, and is very good news for bondholders. AOF recently acquired subordinated notes issued by Old Mutual PLC, a FTSE 100 investment grade company that earned more than 70% of its adjusted operating profits in Africa in 2007 and 2008. The notes rank senior to the equity in the capital structure and enjoy a $7 billion equity cushion provided by those shares, but were priced in the 30s at current yields between 16% and 20%. At those levels, the notes could triple in price and still trade below par. As with many insurance companies in the world today, Old Mutual's balance sheet is stretched, the dividend on the ordinary shares has been cancelled, and the market is valuing the shares below book value. However, Old Mutual remained profitable in 2008, it retains an investment grade rating, and in our judgment is adequately capitalized. While the market may prize the liquidity of the ordinary shares and view a 30% discount to book value as a margin of safety, we are delighted to accept illiquidity for a high yield and a 90% discount to book value. Elsewhere in the portfolio challenges remain. Diamondcorp has encountered operational delays and is running short of cash, and the Ivory Coast has defaulted on its Sphynx notes. However, overall the portfolio is performing well amidst a difficult economic environment. Portfolio Appraisal Value: As of 30th June, the Manager's appraisal of the intrinsic economic value of the portfolio was $0.78 per share. The market price of $0.48 as of 30 June, represents a 38% discount. Note the Appraisal Value is intended to provide a measure of the Manager's long-term view of the attractiveness of AOF's portfolio. It is a subjective estimate, and does not tell when that value will be realized, nor does it guarantee that any particular security will reach its Appraisal Value. Strategy: We are focused on investing in companies with minimal debt and little need to access the capital markets, with a particular emphasis on goods and services in short supply in Africa. Market leading, cash generative businesses are trading at historically low valuations, and where we can find companies offering a single digit PE, significant free cash flow, and a secure market position, we will look to deploy risk capital. At the same time, in the realm of fixed income, where we can find a 20%+ yield to maturity and high asset coverage with a loan-to-value ratio better than 50%, we will also look to deploy risk capital. Tender Offer: AOF announced a tender offer in early February which was closed on the 26th of February. Shareholders were given the option to submit fully 100% of their holdings for redemption. Given the severe pressures on the investment community, including some of AOF's shareholders, the Manager is pleased that 37% of holders chose to remain invested, and is working diligently to provide rewarding long term returns for its smaller but newly committed shareholder base. Africa Opportunity Partners CONSOLIDATED INCOME STATEMENT FOR THE PERIOD 1 JANUARY THROUGH 30 JUNE 2009 AND 2008 Note For the Half For the Half Year Year Ended 30 Ended 30 June June 2009 2008 USD USD Revenue Interest income 811,715 3,650,710 Dividend income 983,027 1,232,947 Profit on financial assets at fair value through profit or loss 980,634 1,883,603 Liquidation fee income 1,505,413 - Other income 833,957 147,322 5,114,746 6,914,582 Expenses Management fee 178,437 1,224,839 Custodian, secretarial and administration fees 100,642 261,091 Brokerage fees and commissions 6,194 311,475 Audit fees 7,566 26,000 Directors' fees 22,144 59,672 Other operating expenses 8,669 62,177 Losses on financial assets at fair value through profit or loss - 175,163 Realised exchange loss 63,901 - Unrealised exchange loss on fixed deposit - 54,773 387,553 2,175,190 Gain for the period 4,727,193 4,739,392 Attributable to: Equity holders of the Company 4,649,609 4,701,070 Minority interest 77,584 38,322 4,727,193 4,739,392 Basic gain per share for gain attributable to the 9 equity holders of the Company during the period 0.1091 0.0376 Note: First half 2009 figures are for the continuing shareholders only. 42,630,327 or 36.9% of the shares remained post the February 2009 tender offer. Comparative figures should be viewed in this context. The notes form an integral part of these financial statements. CONSOLIDATED BALANCE SHEET FOR THE PERIOD 1 JANUARY THROUGH 30 JUNE 2009 AND 2008 Notes As at 30 June As at 30 June 2009 2008 USD USD ASSETS Held-to-maturity financial assets - 4,730,042 Financial assets at fair value 4 24,257,275 102,654,956 through profit or loss Trade and other receivables 5 1,098,068 2,125,459 Cash and cash equivalents 6 3,116,285 16,656,293 Liquidation assets 5,290,748 - Total assets 33,762,376 126,166,750 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital 7 426,303 1,250,000 Share premium 39,541,433 118,077,481 Retained losses (13,738,621) 4,535,042 Shareholders' interests 26,229,115 123,862,523 Minority interest 495,189 784,800 Total equity 26,724,304 124,647,323 LIABILITIES Trade and other payables 8 1,747,324 1,519,427 Deferred liability - liquidation 5,290,748 - Total equity and liabilities 33,762,376 126,166,750 Note: First half 2009 figures are for the continuing shareholders only. 42,630,327 or 36.9% of the shares remained post the February 2009 tender offer. Comparative figures should be viewed in this context. The notes form an integral part of these financial statements. AFRICA OPPORTUNITY FUND LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 1 JANUARY THROUGH 30 JUNE 2009 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT Issued Share Retained Minority Total capital premium Losses Total interest Equity USD USD USD USD USD USD At 01 January 2008 1,250,000 119,489,981 (166,028) 120,573,953 746,478 121,320,431 Shares buy back (94,900) (6,262,650) - (6,357,550) - (6,357,550) Loss for the year - - (49,658,231) (49,658,231) (328,873) (49,987,104) Dividend - (5,486,263) - (5,486,263) - (5,486,263) At 31 December 2008 1,155,100 107,741,068 (49,824,259) 59,071,909 417,605 59,489,514 Attributable to the liquidation pool * (728,797) (67,977,957) 31,436,029 (37,270,725) - (37,270,725) Profit for the period ended 30 June 2009 - - 4,649,609 4,649,609 77,584 4,727,193 Dividend - (221,678) - (221,678) - (221,678) At 30 June 2009 426,303 39,541,433 (13,738,621) 26,229,115 495,189 26,724,304 * Adjustment to record tender offer share buyback and cancellation and to allocate pro-rata share of loss to the liquidating shareholders for losses incurred inception to 27 February 2009. The notes form an integral part of these financial statements. AFRICA OPPORTUNITY FUND LIMITED CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD 1 JANUARY THROUGH 30 JUNE 2009 AND 2008 For the Period For the Period Ended 30 June Ended 30 June 2008 2008 USD USD Cash flows from operating activities Loss for the year/ period 4,727,193 4,739,392 Adjustment for: Losses attributable to liquidating pool 31,436,029 - Stated capital attributable to liquidating pool (68,706,754) - Assets attributable to liquidating pool 33,785,430 - Interest income (811,715) (3,650,711) Loss/(Gain) on financial assets at fair value through profit or loss (1,678,649) (1,883,603) Dividend income (983,027) (1,232,947) Exchange difference on fixed deposit - (82,842) Operating loss before working capital changes (2,231,493) (2,110,711) Decrease/(increase) in other receivables and prepayments 196,179 233,442 Increase in other payables and accrued expenses 130,717 1,291,528 Net cash (used in) / generated from operating activities (1,904,597) (585,741) Interest received 811,715 3,650,711 Purchase of financial assets at fair value through profit or loss (7,935,602) (51,104,465) Disposal of financial assets at fair value through profit or loss 8,712,005 2,790,000 Dividend received 983,027 1,232,947 Loss on disposal - 175,163 Net cash used in investing activities 2,571,145 (43,255,644) Cash flows from financing activities Dividend paid (221,678) (1,412,500) Shares buy back - - Net cash flow (used in) / generated from financing activities (221,678) (1,412,500) Net (decrease) / increase in cash and cash equivalents 444,870 (45,253,885) Cash and cash equivalent at the start of the year / period 2,671,415 61,827,336 Exchange Difference on fixed deposits - 82,842 Cash and cash equivalent at the end of the year / period 3,116,285 16,656,293 The notes form an integral part of these financial statements. NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY THROUGH 30 JUNE 2009 1. GENERAL INFORMATION Africa Opportunity Fund Limited (the "Company") was launched with an Alternative Market Listing "AIM" in July 2007. A secondary listing was obtained on the Channel Islands Stock Exchange ("CISX") in November 2007. Africa Opportunity Fund Limited is a closed-ended fund incorporated with limited liability and registered in Cayman Islands under the Companies Law on 21 June 2007 and with registered number MC-188243. The Company is domiciled at PO Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The Company aims to achieve capital growth and income through investment in value, arbitrage, and special situations investments in the continent of Africa. The Company therefore may invest in securities issued by companies domiciled outside Africa which conduct significant business activities within Africa. The Company will have the ability to invest in a wide range of asset classes including real estate interests, equity, quasi-equity or debt instruments and debt issued by African sovereign states and government entities. The Company's investment activities are managed by Africa Opportunity Partners Limited, a limited liability company incorporated in the Cayman Islands and acting as the investment manager pursuant to an Investment Management Agreement dated 18 July 2007. To ensure that investments to be made by the Company, and the returns generated on the realisation of investments, are both effected in the most tax efficient manner, the Company has established Africa Opportunity Fund L.P. as an exempted limited partnership in the Cayman Islands. All investments made by the Company will be made through the limited partnership. The limited partners of the limited partnership are the Company, AOF CarryCo Limited and Millenium Special Opportunities Holdings Ltd. The general partner of the limited partnership is Africa Opportunity Fund (GP) Limited. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these unaudited interim financial statements are set out below. These policies have been consistently applied in dealing with items which are considered material in relation to the consolidated financial. Statement of compliance The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB). Basis of preparation The financial statements have been prepared under the historical cost convention, as modified by the fair valuation of financial assets at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3. Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries (referred to as the "Group") as at 30 June 2009. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the Income Statement and within equity in the Statement of Changes in Equity from parent shareholders' equity. Foreign currency translation (a) Functional and presentation currency The Group's consolidated financial statements are presented in USD which is the Group's functional currency. That is the currency of the primary economic environment in which Africa Opportunity Fund Limited ("the Company") operates. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The functional currency of the entities within the Group is USD. The Group chose USD as the presentation currency. (b) Transactions and balances Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of the exchange ruling at the balance sheet date. All differences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Financial assets The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables and held-to-maturity financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. (i) Financial assets at fair value through profit or loss Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Group's documented investment strategy. The Group's policy is for the Investment Manager and the partners to evaluate the information about these financial assets on a fair value basis together with other related financial information. The Group determines the classification of its financial assets on initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end. Recognition Regular-way purchases and sales of financial assets are recognised on the trade date which is the date on which the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place. Measurement When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss directly attributable transactions costs. Gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement in the period in which they arise. Interest income from financial assets at fair value through profit or loss is recognised in the income statement within interest income using the effective interest method. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement within dividend income when the Group's right to receive payments is established. (ii) Held-to-maturity financial assets Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held to-maturity when the Group has the positive intention and ability to hold to maturity. After initial measurement held-to maturity investments are measured at amortised cost using the effective interest method less allowance for impairment. Gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process. (iii) Loans and receivables Loans and receivables are non-derivatives financial assets with fixed or determinable payments that are not quoted in an active market. Such financial assets are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in the consolidated income statement when the loan and receivables are derecognised or impaired, as well as through the amortisation process. (iv) Fair value estimation Securities listed on a stock exchange or traded on a regulated market are valued as of the last closing price on such exchange or market. If no such price is available, the price is determined as the mean of the bid and ask price for such day. If no such price is available or if the market price is not representative of the fair market value, the security is valued based on quotations readily available from principal-to-principal markets, financial publications, recognised pricing services or upon the good faith estimate of fair value in accordance with IFRS, in consultation with the Investment Manager. (iv) Fair value estimation Private securities without public markets or the availability of indicative quotes are valued by the Investment Manager at its best approximation of fair value. The Investment Manager utilises financial models to value these investments utilising multiple investment methodologies or techniques as appropriate, including discounted cash flows, comparative evaluations, etc. (v) Impairment of financial assets The Group assesses at each balance sheet date whether a financial asset is impaired. Assets carried at amortised cost If there is objective evidence that an impairment loss on assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through use of an allowance account. The amount of the loss is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases can be related objectively to an event occurring after the impairment was recognised, the previously recognized impairment loss is reversed, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. Any subsequent reversal of an impairment loss is recognised in profit or loss. Derecognition A financial asset (or, where a part of a financial asset or part of a group of similar financial assets) is derecognised when: * The rights to receive cash flows from the asset have expired; * The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement; or * The Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Financial liabilities Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. Share capital Ordinary shares are classified as equity. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and sales taxes or duty. Interest income: Revenue is measured as interest accrues using the effective interest rate. Interest on bonds and debentures: Revenue is measured as interest accrues using the effective interest rate. Dividend income: Revenue is recognised when the Group's right to receive the payment is established. Other payables Other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Provision A provision is recognised when and only when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow embodying economic benefits will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Cash and cash equivalents Cash and cash equivalents comprise cash at bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Related parties For the purposes of these financial statements, parties are considered to be related to the Group if they have the ability, directly or indirectly, to control the Group or exercise significant influence over the Group in making financial and operating decisions, or vice versa, or where the Company is subject to common control or common significant influence. Related parties may include key management personnel and close family members. Dividend distribution Dividends are declared and paid to the shareholders when the directors are satisfied that the Company has sufficient cash resources to do so. 3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the reporting date. However, uncertainty about these assumptions and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. Critical accounting judgements in applying the Group's accounting policies In the process of applying the Group's accounting policies, which are described in Note 2, the directors have made the following judgements that have the most effect on the amounts recognised in the financial statements:- (i) Determination of functional currency The determination of the functional currency of the Group is critical since recording of transactions and exchange differences arising thereon are dependent on the functional currency selected. As described in Note 2, the directors have considered those factors therein and have determined that the functional currency of the Group is the United States Dollar. (ii) Fair value of other financial instruments The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques including comparable valuation and Black Scholes model. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each balance sheet date. The judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of the financial instrument. (iii) Impairment of financial assets The Group follows the guidance of IAS 39 to determine when held-to-maturity financial assets and receivables are impaired. 4. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS 1 January through 1 January through 30 June 2009 30 June 2008 USD USD Designated at fair value through profit or loss: At start of year 57,140,459 52,635,051 Additions 8,030,641 51,104,465 Disposals (8,712,006) (2,790,000) Net gain on financial assets at fair value through profit or loss 1,583,606 1,708,440 Allocation of assets to liquidation pool as of calculation date (33,785,426) - At 30 June 24,257,275 102,654,956 Analysis of portfolio: - Listed equity securities 13,900,094 45,338,089 - Listed debt securities 10,072,240 57,316,867 - Unlisted debt securities 284,941 - 24,257,275 102,654,956 5. TRADE AND OTHER RECEIVABLES 30 June 2009 30 June 2008 USD USD Interest receivable on bonds 648,759 2,125,459 Dividend receivable 177,634 - Other receivables 271,675 - 1,098,068 2,125,459 The receivable are neither past due nor impaired. Interest receivable on bonds are due within six months. 6. CASH AND CASH EQUIVALENTS 30 June 2009 30 June 2008 USD USD Fixed deposit account - Barclays Bank PLC - 9,240,516 Fixed deposit account - Newedge 2,856,787 - Call deposit account - Barclays Bank PLC 259,498 2,470,550 Fixed deposit account - WestLB AG - 4,945,227 3,116,285 16,656,293 7. SHARE CAPITAL 2009 2009 Number USD Authorised share capital Ordinary shares with a par value of USD 0.01 1,000,000,000 10,000,000 2008 2008 Number USD Share capital Opening balance 125,000,000 1,250,000 Shares buy back (9,490,000) (94,900) As at 31 December 2008 115,510,000 1,155,100 2009 2009 Number USD Opening balance 115,510,000 1,155,100 Exercise of tender offer (72,879,673) (728,797) As at 30 June 2009 42,630,327 426,303 On February 26 a tender offer was passed pursuant to an approval by the Board of Directors. 72,879,673 shares were tendered. These shares were treated as purchased and cancelled on the calculation date of 27 February 2009 with the applicable tender consideration outstanding treated as a deferred liability of the Company. The directors have the general authority to repurchase the ordinary shares in issue subject to the Company having funds lawfully available for the purpose. However, if the market price of the ordinary shares falls to a discount to the Net Asset Value, the directors will consult with the Investment Manager as to whether it is appropriate to instigate a repurchase of ordinary shares. 8. TRADE AND OTHER PAYABLES 30 June 2009 30 June 2008 USD USD Dividend Payable 110,839 - Accrued expenses 166,590 195,203 Option obligations 698,014 - Other payables 771,881 1,324,224 1,747,324 1,519,427 Other payables are non-interest bearing and are due on demand. 9. GAIN PER SHARE Basic gain per share is calculated by dividing the gain attributable to equity holders by the weighted average number of ordinary shares in issue during the period excluding ordinary shares purchased by the Company (including those repurchased in accordance with the Tender Offer) and held as treasury shares. The Company's diluted gain per share is the same as basic gain per share, since the Company has not issued any instrument with dilutive potential. 2009 2008 Gain attributable to equity holders of the Company USD 4,649,609 4,701,070 Weighted average number of ordinary share in issue 42,630,327 125,000,000 Basic gain per share US cents 10.91 3.76 Gains or losses for the period 1 January through 27 February (Calculation Date) attributable to the liquidation pool have been allocated to same as an adjustment to the liquidation pool deferred liability. 10. TAXATION Under the current laws of Cayman Islands, there is no income, estate, transfer sales or other Cayman Islands taxes payable by the Fund. As a result, no provision for income taxes has been made in the financial statements. 11. EVENTS DURING REPORTING PERIOD Tender offer On 4 February 2009, the Board of Directors of the Company resolved to make a tender offer, conditional upon shareholder approval , to purchase up to 100% of ordinary shares in issue. A circular setting out the terms and conditions of the Company was posted to the shareholders of the Company to that effect, and was subsequently approved by the shareholders. The tender offer process closed on 26 February 2009 and the Company received irrevocable tender forms from its shareholders in respect of 72,879,673 ordinary shares in the Company, which represent 63.09% of the issued ordinary shares eligible for tender pursuant to the tender offer. Effective as of the Calculation date of 27 February 2009, the tendered shares were treated as purchased and cancelled with applicable Tender Consideration left outstanding as a deferred liability of the Company. The resulting ordinary shares outstanding subsequent to the cancellation of the tendered shares is 42,630,327. Effective 4 March 2009, the Company's ordinary shares were de-listed from the Official List of the Channel Islands Stock Exchange, LBG and shares are exclusively traded on the AIM Market of the London Stock Exchange. On 30 June 2009 a tender consideration distribution was made to the tendered shareholders in the amount of USD $0.3705 per share, net of fees. The Company received a fee of $1,500,018 as part of the liquidation distribution. Remaining net investment assets of the tendered shareholders after expenses and fees were approximated at $0.04 per share as at 30 June 2009. The realisation and distribution (net of fees) of the remaining assets of the tendered shareholders assets will be made when and as determined by the Investment Manager. This report is available on the Company's website http://www.africaopportunityfund.com and has been posted to the shareholders. For further information please contact: Africa Opportunity Fund Limited Francis Daniels Tel: +2711 684 1528 Grant Thornton Corporate Finance (Nominated Adviser) Philip Secrett Tel: +44 020 7383 5100 LCF Edmond de Rothschild Securities Limited (Nominated Broker) Claire Heathfield/Hiroshi Funaki Tel: +44 020 7845 5960 ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

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