AFRICAN DAWN CAPITAL LIMITED - Disposal Of Remaining Interest In Grindstone Accelerator Proprietary Limited

Disposal Of Remaining Interest In Grindstone Accelerator Proprietary Limited

AFRICAN DAWN CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/020520/06)
Share code: ADW
ISIN Code: ZAE000223194
(“Afdawn” or “the Company”)

DISPOSAL OF REMAINING INTEREST IN GRINDSTONE ACCELERATOR PROPRIETARY
LIMITED

1.   THE DISPOSAL

     Shareholders are hereby advised that Afdawn has entered into
     a sale agreement (“Sale Agreement”) with Grindstone Accelerator 
     Proprietary Limited (“Grindstone”), Thinkroom Consulting 
     Proprietary Limited (“Purchaser”) and Knife Capital Proprietary 
     Limited, in terms of which Afdawn will sell its entire shareholding 
     in Grindstone, comprising 50% of the total issued share capital 
     of Grindstone (“Sale Shares”) to the Purchaser, on the salient 
     terms and conditions set out below (“Disposal”).

2.   RATIONAL FOR THE DISPOSAL

     Afdawn has reached a settlement agreement with the South
     African Revenue Service (“SARS”) in December 2017, as
     announced on SENS on 15 December 2017. The proceeds of the
     Disposal will be used to settle part of this outstanding tax
     debt.

3.   EFFECTIVE DATE

     The effective date of the Disposal will be the business day
     immediately preceding the date on which the conditions
     precedent to the Disposal, as set out in paragraph 5 below,
     is fulfilled or waived (to the extent applicable), which
     date is anticipated to be 15 January 2018 (“Effective
     Date”).

4.   PURCHASE CONSIDERATION

     The total purchase consideration payable by the Purchaser
     for the Sale Shares is an amount of R1 750 000 (“Purchase
     Consideration”), payable in cash in three instalments as
     follows:

     -   R750 000 on the Effective Date;

     -   R500 000 on or before 26 June 2018; and

     -   R500 000 on or before 1 December 2018.

5.   CONDITIONS PRECEDENT

     The Disposal is subject to the fulfilment or, where
     applicable, waiver, of the following conditions precedent
     (“Conditions Precedent”), namely that by no later than
     15 January 2018 (or such later date agreed in writing by the
     parties):

     -   Afdawn and Grindstone conclude a written agreement in
         terms of which they agree the terms of repayment of the
         shareholder loan held by Afdawn against Grindstone;

     -   Afdawn and Grindstone conclude a written agreement in
         terms of which Grindstone agrees to pay up to R375 000
         to Afdawn in respect of historic advisory services;

     -   Afdawn and the Purchaser conclude a written agreement
         in terms of which the Sale Shares are pledged by the
         Purchaser to Afdawn as security for payment of the
         Purchase Consideration; and

     -   to the extent necessary, the shareholders and the board
         of directors of the parties have approved the entering
         into of the Sale Agreement and the other agreements
         referred to above.

     The Conditions Precedent are for the benefit of Afdawn and
     the Purchaser and may only be waived by both of them in
     writing.

6.   FINANCIAL INFORMATION

     The value of 50% of Grindstone’s net liabilities amounts to
     R99 916, while 50% of the attributable loss after tax amounts
     to R126 952 for Grindstone’s most recent financial year
     ended 28 February 2017.

     The proceeds from the Disposal will be applied primarily to
     reduce Afdawn’s outstanding tax liability with SARS.

7.   OTHER RELEVANT INFORMATION

     Afdawn has provided warranties to the Purchaser that are
     standard for a transaction of this nature.

8.   CATEGORISATION

     The Disposal qualifies as a category 2 transaction for
     Afdawn in terms of the JSE Listings Requirements.

Johannesburg
5 January 2018

Sponsor and Corporate Advisor: PSG Capital Proprietary Limited

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