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BK1P - BK ONE LIMITED - Development capital-focused private equity company, BK

Release Date: 08/12/2011 09:00
Code(s): JSE
Wrap Text

BK1P - BK ONE LIMITED - Development capital-focused private equity company, BK One, lists on The JSE Limited BK ONE LIMITED (Formerly Sains Trading (Proprietary) Limited) (Incorporated in the Republic of South Africa) (Registration number 2011/008103/06) Share code: BK1P ISIN: ZAE000161352 ("BK One" or "the Company") DEVELOPMENT CAPITAL-FOCUSED PRIVATE EQUITY COMPANY, BK ONE, LISTS ON THE JSE Limited (the "JSE") The directors of BK One are pleased to announce that the Company has raised over R200 million (two hundred million Rand) by way of the listing of over 20,000,000 non-cumulative full participation redeemable preference shares (the "preference share(s)") at an issue price of R10.00 (ten South Rand) per preference share. The JSE approved the listing of the entire issued preference share capital of BK One in the `Preference Share` sector on the Main Board of the JSE under the abbreviated name `BK One Pref`, JSE preference share code "BK1P", with effect from the commencement of business on Thursday, 8 December 2011. BK One was created by Basileus Capital Proprietary Limited ("Basileus"), an established investment company, and Kwanda Capital Investments Proprietary Limited ("Kwanda Capital"), a private equity fund manager. BK One executive director, Dean Richards, commented, "BK One offers a unique long-term investment opportunity providing one of the few available vehicles for those wishing to invest in a portfolio of underlying developmental capital, or private equity, projects and businesses". These projects and businesses are selected from Basileus` extensive project pipeline comprising in excess of 45 opportunities across eight sectors. The Basileus approach is to firstly assess very early stage opportunities using its own resources, which includes one of South Africa`s largest in-house, private equity, research and development teams that comprise some 47 people. Thereafter Basileus advances the project and/or business using its own operational capacity and capability, deploys additional funding off its own balance sheet, and then seeks co-investment from a variety of other funds and investors, such as BK One. At this stage, the projects and businesses would have been comprehensively de- risked. BK One was established to meet the growing demand locally and globally for developmental capital, or private equity opportunities, as part of a diversified investment portfolio. The compelling investment case for this type of investment has appeal for a broad spectrum of investors ranging from private individuals to financial institutions. Dean Richards added, "Contrary to the norm in South Africa, the preference shares offer investors an opportunity to access investments in the early to mid- stages of development, and our focus is on providing growth and development finance for investments that have passed their initial high-risk phase. This unique structure with Basileus, together with fund management expertise, knowledge and advice from Kwanda Capital, will ensure that we have access to an optimal combination of process, quality projects and a very experienced team of people that have a proven track record based on a comprehensive process-driven framework. This includes three independent levels of decision-making". Basileus` chief executive officer ("CEO"), Julian Williams, said, "Developmental capital is viewed as development and growth funding for projects and businesses that have passed their initial high-risk start-up phase, and this strategy affords optimum potential to identify and capitalise on the `sweet spot` on the value curve. The developmental capital subset of the private equity industry in South Africa is currently under-represented. Globally, it has proven to deliver attractive returns, and BK One is one of the first initiatives to make developmental capital available to the mainstream investment community and thereby attract more capital into building businesses and creating much needed jobs in South Africa." Other advantages to BK One investors include a very high level of transparency and due diligence as a result of the robust processes undertaken by Basileus and Kwanda Capital. Transparency as well as regular communication, site visits and updates on the projects and business will be a key feature of BK One`s relationship with its market. Another unique aspect of the preference share is that a designated broker, Sanlam Private Investments, has been mandated to facilitate the buying and selling of the share to the investment community. The capital raised in the private placement will afford BK One the opportunity to optimise on long term investments in quality projects, which will generate the desired long term returns for investors. BK One`s immediate task is to secure the most suitable projects and businesses for the new investors. The list of investments includes: * Pure Ocean Aquaculture: Food shortages driven by a growing population, changing lifestyles towards healthier eating and dwindling wild marine stock are among the reasons for this choice of investment. There is clearly a demand for farmed fish and the challenges in long-term supply points to aquaculture as the solution. Pure Ocean is a vertically integrated aquaculture company in the development phase of setting up various sites in Southern Africa. A land-based re-circulating plant on the east coast of South Africa is under development and a cage-based project in the Lesotho Highlands already has fish in the water. * Avalloy: Avalloy is a South African company operating in a niche market segment, which is experiencing substantial growth. The Avalloy facility has world class technology and processes producing super-alloys (high- performance alloys) for the aerospace, power generation, petroleum and automobile industries. Avalloy, which is partnered with Rolls-Royce, has developed to the stage that it has obtained its necessary accreditations and customer approvals and is now entering its next phase of development. * TOR Holdings: Tor Construction is a road construction company based in the Southern Cape, which has recently increased its order book to more than twice the contract value in the previous year and the highest ever achieved. Tor Oil Infrastructure is an oil storage and related infrastructure construction company focused on developing projects throughout Southern Africa. Julian Williams added, "Significantly, as the first principal investor, we invest our own capital into our portfolio; this strategy, together with our robust investment processes ensures that we select only the best opportunities we review for inclusion. Basileus` business philosophy is firmly focused on developmental capital projects that have the potential to become significant businesses in their own right. Our business model focuses on reducing business risk through rigorous research and hands-on operational management. We believe this active management focus on ensuring that the underlying business is successful will translate into meaningful returns". Terry Brunton, the CEO of Kwanda Capital, stated that "Our mandate is to represent the interests of those third party investors participating in various projects and businesses through investment into BK One. Our working knowledge and experience of the Basileus investment processes, people and deal pipeline is a key advantage to ensuring that, when combined with our own independent investment process, an additional level of investment decision making is created, which provides investors with a greater level of comfort and optimism". For further information please contact: Dean Richards, BK One, 082 809 9996 Julian Williams, Basileus Capital, 083 708 2642 Terry Brunton, Kwanda Capital, 082 905 2822 Johannesburg 8 December 2011 Investment bank and debt sponsor Nedbank Capital Communication advisor Aprio Strategic Communications Date: 08/12/2011 09:00:10 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.

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