Sharenet Sites 
Sharenet Sites
ADW - African Dawn Capital Limited - Partially underwritten rights offer to raise R25 Million and renewal of cautionary announcement AFRICAN DAWN CAPITAL LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/020520/06) JSE code: ADW ISIN: ZAE000060703 ("Afdawn" or "the company") * PARTIALLY UNDERWRITTEN RIGHTS OFFER TO RAISE R25 MILLION * R10.0 MILLION CONVERTIBLE BOND TO BE ISSUED BY ELITE * R1.7 MILLION CONVERTIBLE BOND TO BE ISSUED BY AFDAWN * RENEWAL OF CAUTIONARY ANNOUNCEMENT 1 Background Shareholders of Afdawn ("Afdawn shareholders") are advised that the company entered into a settlement agreement with The National Housing Finance Corporation Limited ("NHFC")on 30 May 2011 in respect of outstanding loans to the company and its subsidiary, Nexus Personnel Finance (Pty) Limited ("Nexus") in the aggregate of R36 436 000 ("NHFC loan") ("the settlement agreement"). In terms of the settlement agreement, Afdawn is to pay the NHFC an amount of R23 million by 15 September 2011 or a soon thereafter as the parties may agree. In addition, an amount of R5 million (the "Remaining Balance") is payable by Afdawn to NHFC by no later than 1 October 2013 in full and final settlement of the NHFC loans. In the event that the proceeds of the rights offer by Afdawn to its ordinary shareholders, detailed in paragraph 2 below, exceeds R28 million ("the Excess") then the first R5 million of the Excess shall be utilised to repay the Remaining Balance. Any residual of the Remaining Balance, should the Excess fall short of R5 million, is repayable on or before 1 October 2013. The Remaining Balance is interest free and is secured by way of a cession of the book debts in Nexus. In return the NHFC agreed to novate all current agreements between Afdawn, Nexus and Elite Group (Pty) Limited ("Elite") upon signing the agreement. 2 Introduction Afdawn has resolved, subject to the approval by Afdawn shareholders in general meeting of the convertible bonds as set out in further detail in paragraph 5 below, to raise approximately R36.7 million by way of: - a R25 million partially underwritten renounceable rights offer ("rights offer") of 250 million new ordinary Afdawn shares of R0.01 each ("rights offer shares") to Afdawn shareholders at a subscription price of R0.10 per rights offer share ("subscription price") and in the ratio of 112 rights offer shares for every 100 Afdawn shares held. The subscription price represents a premium of 11% to the closing price of Afdawn ordinary shares on 13 June 2011 of R0.09; - a R10 million convertible bond to be issued by Elite as described in paragraph 5; - a R1.7 million convertible bond to be issued by Afdawn as described in paragraph 5; 3 Irrevocable undertakings Irrevocable undertakings have been received from shareholders holding 40.5% of the ordinary shares of the company in terms of which these shareholders will subscribe for all of the rights offer shares to which they are entitled at the subscription price ("the subscription"), being in aggregate R10,126 million. 4 Underwriters Sandown Capital Proprietary Limited ("Sandown Capital") has agreed to underwrite 40% or R10 million of the rights offer for an underwriting fee of 3% subject to the following additional conditions: - that Sandown Capital shall receive a minimum allocation of R7.5 million of the rights offer shares at the subscription price to be settled by the issue of Afdawn shares at the subscription price; - that the 3% underwriting fee of R300 000 shall be payable to Sandown Capital by way of the issue of Afdawn shares at the subscription price; - that Sandown Capital shall have the right to appoint one director to the board of each of Afdawn and Elite Group Proprietary Limited ("Elite"), a wholly owned subsidiary of Afdawn; - that Elite will issue a convertible bond of R10 million to Sandown Capital as more fully described in paragraph 5. PCI Fintrade (Pty) Limited ("PCI") has agreed to underwrite 6.8% or R1.7 million of the rights offer for an underwriting fee of 3% subject to the following additional conditions: - that PCI shall receive a minimum allocation of R1.7 million of the rights offer shares at the subscription price to be settled by the issuing of Afdawn shares at the subscription price; - that PCI is granted a convertible bond of R1.7 million as more fully described in paragraph 5; - that the 3% underwriting fee of R51 000 shall be payable to PCI by way of the issue of Afdawn shares at the subscription price; 5 Convertible Bonds Subject to the approval of Afdawn shareholders in general meeting and as a condition of underwriting the rights issue: - PCI will subscribe for a three year convertible bond to be issued by Afdawn of R1.7 million ("the PCI bond"), which may be converted into Afdawn ordinary shares at the option of PCI at any time within a three year period at a price of R0.14 per Afdawn ordinary share. - Sandown Capital will subscribe for a three year convertible bond to be issued by Elite of R10.0 million ("the Sandown Capital bond"), which may be converted into Afdawn ordinary shares at the option of Sandown Capital at any time within a three year period at a price of R0.14 per Afdawn ordinary share. 6 Purpose of the rights offer and use of proceeds The purpose of the rights offer is to raise funding for Afdawn and its subsidiary companies ("the Group") which will be applied to settle, inter alia, Afdawn`s outstanding loan to the NHFC in terms of the settlement agreement and to provide working capital for the Group. 7 Categorisation In terms of section 5.51 the JSE Listings Requirements relating to specific issues of shares for cash, the PCI bond and the Sandown Capital bond will require shareholder approval in general meeting. 8 Further cautionary announcement and further documentation Shareholders are referred to the cautionary announcement released on SENS on 31 May 2011 advising that the company was still in discussions with various parties regarding the raising of additional funding for the Group. Shareholders are advised to continue exercising caution when dealing in the company`s securities until an announcement containing financial effects of the rights offer, the PCI bond and the Sandown Capital bond are released. A circular and Revised Listings Particulars to shareholders containing the requisite information pertaining to the rights offer, the PCI bond and the Sandown Capital and convening a meeting of shareholders will be posted to shareholders within 28 days of publication of this announcement or such later date as agreed to by the JSE Limited. Johannesburg 14 June 2011 Designated advisor and corporate advisor: Sasfin Capital A division of Sasfin Bank Limited Date: 14/06/2011 16:46:24 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
