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Announcement regarding the granting of a call option
Notice of preference shareholders meeting 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 granting of a call option
Notice of preference shareholders’ meeting
Renewal of cautionary announcement
1 Introduction
BK One preference shareholders (“Shareholders”) are referred to the cautionary
announcements published on 28 August 2014 and 10 October 214 and are advised that
BK One has entered into a call option agreement in terms of which the Company has
granted a call option to Pure Ocean Aquaculture Limited (“the Acquirer”) (“the Call Option”)
to acquire the Company’s entire right, interest and title in the claims and shares held in
Pure Ocean Aquaculture Proprietary Limited (“POA”) and claims held in Pure Ocean East
London Proprietary Limited (“POEL”) (“the Subject Matter”).
2 Rationale for the Call Option
As disclosed in the Annual Financials for year ended 28 February 2014, the ability for the
company to continue as a going-concern is dependent on the procurement of adequate
funding for working capital. Possible sources of working capital were to:
- sell part or whole of its respective investments; and / or
- recover short-term receivables from its underlying assets; and / or
- issue additional shares; and / or
- or a combination of the above.
The directors are of the view that the out-and-out sale of the whole or part of the
Company’s respective investments did not present, at the present time, a realistic
alternative.
In order to recover short-term receivables from the underlying assets, the underlying
assets would need to be fully funded. Various methods to procure funding for the
underlying assets were considered and the most favourable option was the Call Option as
it was linked to providing working capital and trade finance funding for the Pure Ocean
Group, the effect of which will stabilise them into the future while simultaneously securing
the possibility of a liquidity event for the Company through the Call Option.
Shareholders are also referred to the preference shareholders’ meeting held on 30
September 2014 in terms of which the authorisation of the subscription for and allotment of
800 authorised but unissued ordinary shares in the ordinary share capital of the Company
was granted. The subscription for the aforementioned ordinary shares is subject to certain
conditions precedent still to be fulfilled, however it is anticipated that these conditions will
be fulfilled shortly. The combination of the Call Option and subscription for ordinary shares
will in the opinion of the directors adequately provide for the working capital requirements
of the Company for the following year.
3 Terms of the Call Option
The terms of the Call Option are as follows:
3.1 BK One has granted the Acquirer the Call Option for a period of two years to
purchase the Subject Matter;
3.2 in the event that the Acquirer exercises the Call Option, it shall issue convertible
loan notes (“CLs”) to BK One in payment for the Subject Matter (“the Purchase
Consideration”);
3.3 the Acquirer shall procure a listing of itself as soon as possible after the exercise of
the Call Option;
3.4 the outstanding CLs shall bear interest at a rate of 2% per annum, compounded
annually until such time as either:
- the market capital of the Acquirer reaches US$100 million (“the Conversion
Event”); or
- the second anniversary of the date on which the CLs were issued by the
Company (“the Long Stop Date”);
whichever is the earlier (“the Conversion Date”); and
3.5 the Company shall be entitled, at its discretion, at the Conversion Event to serve a
conversion notice to the Acquirer to convert all CLs held by the Company into fully
paid ordinary shares in the Acquirer at the conversion price on the Conversion Date.
4 Purchase consideration of the Call Option
On exercise of the Call Option, the Acquirer will issue CLs in the amount of
US$14 577 898.05 as follows:
Subject Matter component Purchase consideration
US$
Loan claims in POA 9 479 608.56
Loan claims in POEL 3 968 246.00
Share equity of 131 655 050 shares in POA 1 130 043.49
Total 14 577 898.05
5 Notice of preference shareholders’ meeting
A general meeting of Shareholders of BK One will be held at 9h00 on Wednesday, 26 November 2014
at Boundary Terraces, 3 Floor, Mill House, 1 Mariendahl Road,Newlands, Cape Town to transact the
business as stated in the notice posted to Shareholders on 4 November 2014.
The date on which Shareholders must be recorded as such in the register maintained by
the transfer secretaries of the Company for purposes of being entitled to attend and vote at
the preference shareholders’ meeting as determined in terms of the Companies Act, No 71
of 2008, is Friday, 21 November 2014.
6 Renewal of cautionary announcement
BK One continues to be in negotiations in relation to its underlying assets, which if
successfully concluded may have a material effect on the price of the Company’s
securities. Shareholders are consequently advised to continue to exercise caution when
dealing in the Company’s securities until a further announcement is made.
Cape Town
5 November 2014
Investment bank and Sponsor
Nedbank Capital
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