BK ONE LIMITED - Announcement regarding the sale and repurchase agreement entered into between the Company and renewal of cautionary

Announcement regarding the sale and repurchase agreement entered into between the Company and renewal of cautionary

BK One Limited
Incorporated in the Republic of South Africa
Registration Number: 2011/008103/06
Preference Share Code: BK1P
ISIN: ZAE000161352
“BK One” or “the Company”

Announcement regarding the sale and repurchase agreement entered into between the
Company and Winn Developments Close Corporation (“Winn Developments”) with regard to
the Company’s investment in a structured investment vehicle (the “Structured Investment”)
(the “Agreement”) and renewal of cautionary announcement

1     Introduction

      Shareholders are advised that, on 1 March 2013, the Company entered into a binding sale
      and repurchase agreement with Winn Developments in terms of which it sold the claims
      held by it in the Structured Investment, constituting an investment in a securitisation special
      purpose vehicle, and acquired an option to purchase the same claims by 31 May 2013
      (“Call Option”).

      The substance of the agreement is that of a lending arrangement as the Company expects
      to exercise the Call Option and re-acquire the Structured Investment.

2     Terms of the Agreement

      In terms of this agreement Winn Developments will acquire the Company’s investment in
      the Structured Investment vehicle to serve as security. This Structured Investment is
      presently valued at R26.4 million and, in terms of the Agreement, will be sold to Winn
      Developments for R12.5 million. The Company will have the right to reacquire the
      investment for R15 million on or before 31 March 2013, R15.25 million after 31 March 2013
      but on or before 30 April 2013 and R15.5 million after 30 April 2013 but on or before 30
      May 2013 (the “Repurchase Amount”). Ownership of the investment will transfer back to
      the Company upon full payment of relevant Repurchase Amount.

      Winn Developments shall not reduce the capital amount of the Structured Investment
      without the prior written consent of the Company during the period that it has ownership of
      the Structured Investment. It may also not encumber the Structured Investment in any way
      for the duration of that period. Should a liquidity event occur at the level of the Structured
      Investment, Winn Developments will pay any difference greater than the Repurchase
      Amount to the Company.

3     Rationale for the Agreement

      The Company has entered into the Agreement as an interim liquidity measure in order to
      unlock value within the Company’s portfolio.

4     Pro forma financial effects

      Based on the unaudited interim financial results of the Company for the six month period
      ended 31 August 2012, the pro forma financial effects of the Agreement on the Company’s
      earnings per share, headline earnings per share, net asset value ("NAV”) per share and tangible
      net asset value (“TNAV”) per share are set out below. The pro forma financial
      information has been prepared for illustrative purposes only and because of its nature may
      not provide a true reflection of the Company’s financial position, nor the effect and impact
      of the Agreement on the Company going forward.

      The pro forma financial information is the responsibility of the directors of the Company and
      has not been reviewed by the Company’s auditors.

                                           Before the       After the       % Change
                                           Agreement        Agreement
                                           (1)              (2)
NAV (cents) (3)                            788.8            776.2           (1.6)
TNAV (cents) (3)                           788.8            776.2           (1.6)
Earnings per share (cents) (3)             (340.8)          (353.3)         (3.7)
Headline earnings per share (cents) (3)    (340.8)          (353.3)         (3.7)
Preference shares in issue ('000)          20 102           20 102


      Notes:

      1 Extracted from the unaudited interim financial result of the Company for the six month
      period ended 31 August 2012.

      2     Based on the assumption that the Agreement was concluded during the financial
      period commencing 1 March 2012.

      3    Based on the assumption that the Call Option in the Agreement is exercised and
      proceeds from the sale of the investment earn interest at 5.5% per annum and that BK
      One’s effective tax rate is 28%.

      The Agreement will have a material effect on the Company’s NAV per share and TNAV per
      share if the Call Option in the agreement is not exercised.

                                           Before the       After the       % Change
                                           Agreement        Agreement
                                           (4)              (5)
NAV (cents) (6)                            788.8            737.3           (6.5)
TNAV (cents) (6)                           788.8            737.3           (6.5)
Earnings per share (cents) (6)             (340.8)          (392.2)         (15.1)
Headline earnings per share (cents) (6)    (340.8)          (392.2)         (15.1)
Preference shares in issue ('000)          20 102           20 102


      Notes:

      4 Extracted from the unaudited interim financial result of the Company for the six month
      period ended 31 August 2012.

      5 Based on the assumption that the Agreement was concluded during the financial period
      commencing 1 March 2012.

      6 Based on the assumption that the Call Option in the Agreement is not exercised and
      proceeds from the sale of the investment earn interest at 5.5% per annum and that BK
      One’s effective tax rate is 28%.

5     Renewal of cautionary announcement

      Shareholders are referred to the Company’s previous cautionary announcements, relating
      to the cession and assignment of its option to acquire selected assets from Basileus
      Investments Proprietary Limited to Isitsaba Investment Group Limited, and are advised to
      continue to exercise caution when dealing in the Company’s securities until a further
      announcement is made.




      Cape Town

      6 March 2013




           Debt sponsor to BK One                                 Attorneys

    Nedbank Capital, a division of Nedbank                          CDH
                  Limited

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