BK ONE LIMITED - Announcement regarding the proposed acquisition by the Company

Announcement regarding the proposed acquisition by the Company

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 proposed acquisition by the Company of Basileus Capital
Proprietary Limited’s ('Basileus Capital') controlling interests in select assets (the ‘Target
Assets') (the 'Proposed Acquisition') and renewal of cautionary announcement

1     Introduction

      Shareholders are referred to the cautionary announcements published on the Securities
      Exchange News Service on 10 August 2012 and 24 August 2012 respectively and,
      specifically, to the BK One Board of Directors’ (the ‘Board’) stated intent of forging a new
      strategy for the Company.

      With this objective in mind, the Company entered into discussions with Basileus Capital,
      and its duly appointed business rescue practitioners (the ‘Business Rescue Practitioners’),
      regarding the targeted acquisition of the shares and claims held by Basileus Capital in a
      select number of assets in the Basileus Capital portfolio.

      Shareholders are advised that, on 24 August 2012, the Company entered into a binding
      memorandum of understanding in terms of which it has been agreed for the Company to
      acquire the Target Assets from Basileus Capital, subject to the fulfilment of a number of
      conditions precedent.

2     Terms of the Proposed Acquisition and nature of the Target Assets

      The Company will acquire the Target Assets, as one indivisible transaction, from Basileus
      Capital, subject to the fulfilment of a number of conditions precedent set out in paragraph 4
      below. The purchase consideration will equal 90% of the value of the Target Assets, as
      determined by the Business Rescue Practitioners and confirmed by an independent valuer
      appointed by BK One (the ‘Purchase Consideration’). The Purchase Consideration will be
      settled through the issue of BK One shares.

      The Proposed Acquisition will be executed in terms of a formal business rescue plan/s (the
      ‘Business Rescue Plan/s’), in terms of Chapter 6 of the Companies Act 71 of 2008 (the
      ‘Companies Act’), for each of Basileus Capital and the applicable Target Asset presently in
      business rescue. In terms of this process a majority of affected creditors must approve the
      Business Rescue Plan/s, which inter alia, comprise the Proposed Acquisition.

      The Target Assets consist of seven assets, three of which the Company already has an
      interest in. Details of the interests to be acquired by BK One and the nature of the assets
      are set out below:

        2.1 Pure Ocean

        BK One currently has a 7,7% interest in Pure Ocean Aquaculture Proprietary Limited
        (‘Pure Ocean’). In terms of the Proposed Acquisition, BK One will acquire an additional
                                                                                         2


86,3% interest in Pure Ocean from Basileus Capital. Pure Ocean is involved in the entire
aquaculture value chain and is involved in developing, operating and managing
aquaculture operations in South Africa and Lesotho. Pure Ocean is also involved in the
wholesale and retailing of fresh fish.

2.2 Cash Connect

Basileus Capital intends disposing of its 76% interest in Cash Connect Proprietary
Limited (‘Cash Connect’) to BK One. Cash Connect operates a physical cash
management services firm which serves a blue chip client base.

2.3 Kawuleza Connect

In terms of the Proposed Acquisition, BK One will acquire Basileus Capital’s 77% interest
in Kawuleza Connect Holdings Proprietary Limited (‘Kawuleza Connect’). Kawuleza
Connect offers internet access services such as wireless point to point, point to multi-
point broadband and asymmetric digital subscriber lines as well as voice over internet
protocol and web-hosting services to customers throughout South Africa.

2.4 Lefatse Minerals (In business rescue)

In terms of the Proposed Acquisition, BK One will acquire Basileus Capital’s 98% interest
in Lefatse Minerals Proprietary Limited (‘Lefatse Minerals’). Lefatse Minerals is involved
in the exploration and development of heavy minerals and presently has prospecting
rights over a heavy minerals deposit on the South African west coast.

2.5 Toroic

In terms of the Proposed Acquisition, BK One will acquire Basileus Capital’s 100%
interest in Tor Oil Infrastructure Construction Proprietary Limited (‘Toroic’). Toroic is a
new oil infrastructure development specialist. Toroic was established for the purposes of
pursuing niche opportunities within the oil storage infrastructure construction sector as
well as the broader oil and gas construction sectors.

2.6 Burgan Oil

In terms of the Proposed Acquisition, BK One will acquire Basileus Capital’s 94% interest
in Burgan Oil Services Proprietary Limited (‘Burgan Oil’). Burgan Oil’s strategy is to
develop and acquire fuel infrastructure facilities across Southern Africa. Potential focus
areas include liquid fuel depots, pipelines, gantries, berths and related infrastructure.

2.7 Agri-Tech

In terms of the Proposed Acquisition, BK One will acquire Basileus Capital’s 82% interest
in Agri-Technologies and Services Proprietary Limited (‘Agri-Tech’). Agri-Tech was
established to provide technology solutions and related services to the agricultural
sector. These services include financial analysis, structuring and valuations of farming
enterprises as well as the provision of its in-house software suite which provides
production forecasting, financial forecasting and financial management tools.
                                                                                              3


3   Rationale for the Proposed Acquisition

    The Company, through its historic co-investment relationship with Basileus Capital, has
    developed an understanding of the potential value of the Target Assets and is, in the
    Board’s assessment, ideally placed to extract full value from these Target Assets over their
    respective investment cycles.

    Consequently the Proposed Acquisition will allow the Company to:

            rebrand and restructure in order to create a more efficient and transparent
            structure within which to develop its portfolio companies;

            improve its portfolio diversification;

            improve the scale and profile of the Company;

            create a uniquely positioned African investment vehicle focused on developmental
            capital and private equity; and

            consequently terminate the co-investment agreement between BK One and
            Basileus Capital as a result of Basileus Capital entering into business rescue
            proceedings.

4   Regulatory approvals and conditions precedent

    The Proposed Acquisition is subject to all necessary regulatory approvals, as required,
    including, but not limited to:

            the JSE Limited (‘JSE’);

            the competition authorities; and

            the Take-over Regulation Panel.

    The Proposed Acquisition is subject to the Company completing its normal due diligence
    and investment processes to the satisfaction of the Board and approval by the Company’s
    audit committee.

    Set out below are the conditions precedent to the Proposed Acquisition, which require
    fulfilment on or before 30 November 2012:

            The affected persons, as defined by the Companies Act, of Basileus Capital
            adopting the Business Rescue Plan’s;

            The Business Rescue Practitioners providing valuations of the Target Assets and
            the independent valuer appointed by BK One confirming the valuations;

            Unsecured post-commencement finance, as defined in Chapter 6 of the
            Companies Act, being made available to Basileus and/or the relevant Target Asset
            to enable them to continue ordinary business operations, pending the approval and
            implementation of the Business Rescue Plans. Where possible, BK One will assist
            in raising funds for this purpose;

            Finalisation of the agreements required to effect the Proposed Acquisition; and
                                                                                             4


             Approval by the Company’s shareholders of the Proposed Acquisition and any
             restructure of the Company which may be required to give effect to the Proposed
             Acquisition.

5     Potential restructuring of BK One

      Depending on the settlement mechanism of the Proposed Acquisition, namely BK One
      ordinary or preference shares, the Company may be required to restructure its share
      capital (the ‘Restructure’), which will require, inter alia, shareholder approval and an
      application to, and approval by, the JSE.

      As a consequence of the Proposed Acquisition and the Restructure, the Company intends
      increasing its staff complement to bring in additional, relevant skills and capacity.

6     Renewal of cautionary announcement

      As the pro forma financial effects of the Proposed Acquisition and the details of the
      Restructure have not yet been published, shareholders are advised to continue to exercise
      caution when dealing in the Company’s securities until a further announcement is made.




Cape Town

28 August 2012




             Sponsor to BK One                                     Attorneys

    Nedbank Capital, a division of Nedbank                           CDH
                  Limited

Date: 28/08/2012 09:25:00 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.