BUKA INVESTMENTS LIMITED - Acquisition of Socrati Footwear Group

Acquisition of Socrati Footwear Group

BUKA INVESTMENTS LIMITED
(Previously known as Imbalie Beauty Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2003/025374/06)
JSE code: ILE
ISIN: ZAE000165239
("Buka" or "the Company")


Acquisition of Socrati Footwear Group


1    Introduction
     Shareholders are advised that Buka has entered into a written heads of agreement
     on 14 July 2022, in terms of which Buka will acquire all the shares in Caralli Leather
     Works (Pty) Limited ("Caralli") and Socrati Footwear (Pty) Ltd ("Socrati")
     (collectively "the Socrati Group") from B&B Media (Pty) Limited ("B&B Media") and
     Moltera Group (Pty) Limited ("the Sellers") ("the Transaction"). B&B Media is a
     material shareholder in Buka and the Transaction accordingly constitutes a related
     party transaction in terms of the JSE Listings Requirements.


2    Rationale
     Buka intends becoming a premium fashion company that aspires to make accessible
     distinct fashion retail brands to consumers, procured internationally and locally,
     manufactured with sustainability, community upliftment and quality at its core.


     The acquisition of the Socrati Group is the first step in achieving the above vision.


     Socrati currently has five stores located in Gauteng at Nelson Mandela Square in
     Sandton, Hyde Park Shopping Centre, Cedar Square in Fourways, Brooklyn Mall in
     Pretoria, an outlet store in World Wear shopping centre off Beyers Naude Drive as
     well as an on-line store. Socrati also plans to open a further 5 stores in the next few
     months.


     Caralli manufactures hand-made high quality leather shoes in a factory situated in
     Denver, Johannesburg. It manufactures shoes for well known third party brands as
     well as manufacturing shoes for Socrati.

3       Salient terms of the Transaction
3.1          Buka will acquire, from the Sellers, all the shares in and claims on loan account
             in an amount of R10 million against (collectively the "Sale Equity") the Socrati
             Group for an aggregate purchase price of R140 million, which purchase price
             shall be discharged by Buka issuing 70 million new fully paid-up Buka ordinary
             shares to the Vendors at R2 per Buka ordinary share.
3.2          Any claims on loan account by the Sellers against the Socrati Group, in excess
             of the R10 million as detailed in paragraph 3.1 above, will be treated as a
             Vendor loan with the following terms:
3.2.1             Bear interest at the prime overdraft rate; and
3.2.2             Be repaid as and when Buka has cashflow with capital amount and
                  interest to be repaid by no later than 30 June 2025.
3.3          The parties will enter into definitive agreements by no later than 30 September
             2022.
3.4          The Transaction will be subject to normal warranties that are customary for
             transactions of this nature.

4       Conditions precedent
        The Transaction will be subject to, inter alia, the following conditions precedent:
4.1          Buka undertaking a due diligence investigation into the Socrati Group, the
             outcome of which investigation must be to Buka's satisfaction;
4.2          the AltX Advisory Committee advising the JSE as to the eligibility of Buka to
             retain its listing on AltX following the implementation of the Transaction and the
             JSE exercising its discretion for Buka to continue to be listed;
4.3          the board of directors of Buka approving the entering into and implementation
             of the Transaction;
4.4          approval by shareholders of Buka of the Transaction;
4.5          completion of a fairness opinion by an independent expert; and
4.6          obtaining the necessary regulatory approvals for the Transaction.

5   Categorisation of Transaction
    The Transaction is a reverse take-over and will be considered by the JSE as a new
    listing. Shareholders are warned that the Transaction is subject to the JSE allowing
    the listing to continue following the Transaction. A category 1 circular, incorporating
    revised listing particulars, will be prepared and submitted to shareholders. The
    Transaction requires shareholders' approval. The Transaction is a related party
    transaction in terms of section 10.1 of the JSE Listing Requirements, as B&B Media
    is a material shareholder of Buka, and a fairness opinion is required from an
    Independent Expert. The aforesaid circular will be distributed to shareholders within
    60 days of this announcement.

6   Financial information
    The value of the net assets that are the subject of the Transaction is negative R7,06
    million as at 28 February 2022 and the profits attributable to the net assets that are
    the subject of the Transaction is R6,172 million for the year to 28 February 2022.

15 July 2022
Parktown

Designated Advisor
Exchange Sponsors

Date: 15-07-2022 10:30:00
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