2 Proposed Transactions/Commence.of Restructure&Reconstruct.

Document date:  Thu 25 Oct 2001
Published:  Thu 25 Oct 2001 11:57:49
Document No:  143264
Document part:  A
Market Flag:  Y
Classification:  Asset Disposal 

PSIRON LTD                                    2001-10-25  ASX-SIGNAL-G

HOMEX - Brisbane                                                      

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CONTINUOUS DISCLOSURE REQUIREMENTS LISTING RULE 3.1

Pursuant to Listing Rule 3.1 we wish to advise the market of two
proposed transactions which mark the commencement of the foreshadowed
restructure and reconstruction of your company.

The result of the restructure will be to substantially increase the
sustainable earnings base from the diagnostics business and to add
value to the biotech asset base which will form the foundation of
future earnings. In brief Psiron Ltd is proposing to sell its
diagnostic interests for $1,600,000 as well as making an $800,000
investment in Analytica Ltd. This compartmentalisation of the
therapeutic and diagnostic division allows the Company to focus the
business.

These transactions are subject to shareholders approval. An
Explanatory Memorandum and Independent Experts report and other
relevant documentation giving full details of the transactions, are
currently being prepared. This information will be included with the
Notice of Meeting of members, which will be despatched shortly.

The first proposed transaction (the sale of the Diagnostics business
- refer to appendix 1 for details) is a continuation of and natural
part of the business strategy of the company's development and sale
of IP. The Diagnostic business grew out of the development of the
company's IP into a manufacturing and distribution enterprise. It is
now appropriate for the company to realise the value of the organic
growth that has occurred with the development of its IP.

The transaction results in the sale of the Company's diagnostic
interest for $1,600,000 in convertible notes to Analytica Ltd. The
value of the transaction is based on 6 times adjusted profitability
of the diagnostic interest and includes the sale of inventory and
fixed assets at book value (at June 30 these had a value of
$363,000), as well as use of IP licences which have no book carrying
value. These assets represent 10% of the Company's total June 30
audited assets. The sale realises a profit on the Company's
development of IP.

The second proposed transaction (an investment in Analytica Ltd of
$800,000 - refer to appendix 2 for details) gives the Company a
controlling interest in Analytica Ltd. This transaction gives Psiron
Ltd access to, and control of additional IP that the directors
believe has significant potential value. It also maintains the
Company's control over the diagnostic interests. This provides
continued upside to the Company's shareholders from any coutinued
growth that occurs in the diagnostic business.

An Explanatory Memorandum and Independent Experts report and other
relevant documentation giving full details of the transactions are
currently being prepared. This information will be included with the
Notice of Meeting of members, which will be dispatched shortly.

The shareholders have been previously advised of the proposed
reconstruction and the growth of IP in the biotechnology area. These
transactions form part of this strategy.

Please contact the company if you require further information.


S Jones 
CHAIRMAN

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