AFRICAN DAWN CAPITAL LIMITED - Disposal Of Interest In Knife Capital Proprietary Limited And Withdrawal Of Cautionary Announcement

Disposal Of Interest In Knife Capital Proprietary Limited And Withdrawal Of Cautionary Announcement

African Dawn Capital Limited
Incorporated in the Republic of South Africa
(Registration Number: 1998/020520/06)
JSE share code: ADW
ISIN: ZAE000223194
(“Afdawn”)

DISPOSAL OF INTEREST IN KNIFE CAPITAL PROPRIETARY LIMITED AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1.   THE DISPOSAL

     Shareholders are hereby advised that Afdawn has entered
     into an agreement with Evitavonni International SA
     (“Purchaser”)(“Agreement”),   in  terms   of   which,  if
     successfully implemented, Afdawn will dispose of 100% of
     the issued share capital (“Sale Shares”) of Knife Capital
     Proprietary Limited (“Knife Capital”), on the salient
     terms and conditions set out in the below(“Disposal”).

2.   RATIONALE FOR THE DISPOSAL

     Afdawn’s strategy is to be an active investment holding
     company while the key underlying strategy of Knife is to
     be a venture capital fund manager. Afdawn’s strategy is to
     invest directly in operational businesses. After the
     disposal Afdawn will still have investment rights via 50%
     shareholding in Grindstone. Knife will manage Grindstone
     in terms of    a service level agreement.    The Knife Gap
     Analysis tool was productized and assigned to YueDiligence.
     YueDiligence has appointed a CEO, Tyronne Nel, to build
     Yuediligence into a diversified FinTech analytics platform
     business and to raise it’s profile.

3.   EFFECTIVE DATE

     The Disposal will become effective on 1 September 2017
     (“Effective Date”).

4.   PURCHASE CONSIDERATION
     The total purchase consideration payable by the Purchaser
     for the Sale Shares is an amount of R3 625 000, payable in
     cash on the Effective Date.

5.     CONDITIONS PRECEDENT

5.1.     The Disposal is subject to the fulfilment or, where
         applicable, waiver, of various conditions precedent
         (“Conditions Precedent”), as summarised below:

5.1.1.     certain related transactions (“Related Transactions”)
           are concluded and become unconditional according to
           their respective terms;

5.1.2.     to the extent necessary, the shareholders and the
           board of directors of Afdawn, Knife Capital and the
           Purchaser have approved the entering into of the
           Agreement and to the extent necessary, the Related
           Transactions agreements;

5.1.3.     SARB approval has been obtained, to the extent
           required; and

5.1.4.     Knife Capital has entered into an agreement with
           Afdawn in terms of which certain inter-company claims
           will be repaid by Knife Capital to Afdawn.

5.2.     The Conditions Precedent may be waived if agreed to by
         Afdawn and the Purchaser.

6.     FINANCIAL INFORMATION

6.1.     The value of Knife Capital’s net assets amounts to R454
         723, while the attributable loss after tax amounts to
         R1 392 065 according to Knife Capital’s most recent
         financial year ended 28 February 2017.

6.2.     The proceeds from the Disposal will be applied primarily
         towards the intended settlement of the longstanding
         claim by the South African Revenue Service against the
         the Company, which we hope to settle in the near future.

7.     OTHER RELEVANT INFORMATION

7.1.     Afdawn has provided warranties to the Purchaser that are
         standard for a transaction of this nature.
7.2.     In terms of the Related Transactions, prior to the
         implementation of the Disposal:

7.2.1.        Knife Capital will transfer its entire shareholding
              in YueDiligence Proprietary Limited to Afdawn – this
              amounts to an internal restructuring prior to the
              implementation of the Disposal;

7.2.2.        Knife Capital will transfer 50% of the entire
              shareholding in Grindstone Accelerator Proprietary
              Limited (“Grindstone”) to Afdawn – this amounts to
              an internal restructuring prior to the
              implementation of the Disposal; and

7.2.3.        Knife Capital will assign all of its rights, title
              and interests in certain intellectual property
              (“IP”) to Grinstone – this wil allow Afdawn to enjoy
              the benefit of 50% of the IP post the implementation
              of the Disposal.

8.     CATEGORISATION

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

9.     WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

       Shareholders are referred to the cautionary announcement
       dated 14 July 2017.

       Shareholders are hereby advised that as the negotiations
       were successfully concluded, accordingly, caution is no
       longer required to be exercised by shareholders when dealing
       in the Company’s securities.

Johannesburg
25 August 2017

Corporate Adviser and Sponsor
PSG Capital

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