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Specific issue of shares to and provision of loan by related party
STRATCORP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/031842/06)
(JSE code: STA ISIN: ZAE000034294)
(“StratCorp” or “the Company”)
Specific issue of shares to and provision of loan by related party
1. Introduction and rationale
1.1. Over the past few months the Company has investigated various alternatives to raise
capital to improve its liquidity position and working capital. A number of these initiatives
failed to materialise.
1.2. An agreement (“the Agreement”) was entered into on 15 July 2015 with Kose-Kose
Investments Limited (“KKI”), in terms of which KKI will subscribe for 408 824 944 shares
at 0,5 cents each in the share capital of StratCorp for an aggregate amount of
R2 044 124.72 on certain terms and conditions (“the Specific Issue”) summarised below.
1.3. In addition, KKI will be providing StratCorp with an interim R1 million secured loan facility
until the suspensive conditions for the Specific Issue had been fulfilled.
1.4. KKI is a Broad Based Black Economic Empowerment investment company with more than
31 000 shareholders. KKI was established in 2009 and its initial investment was its
shareholding in StratCorp. In order to diversify, other investments by KKI include minority
shareholdings in MTN Zakhele and Selective Empowerment Investments 2 Limited.
1.5. KKI currently holds 30.59% of the issued share capital of the Company and has two
representatives on its board. This transaction is therefore a related party transaction.
2. Suspensive conditions
2.1. The Agreement is subject to the fulfilment of two sets of suspensive conditions being
fulfilled.
2.2. The initial suspensive conditions have been fulfilled.
2.3. The subscription by KKI shall only take place if the following additional suspensive
conditions (“the Subsequent Suspensive Conditions”) are fulfilled by 30 September 2015,
or such later date as may be agreed between the parties in writing, that:
2.3.1. KKI confirms in writing, on or before 31 July 2015, that it is satisfied with a financial
and legal due diligence on the Company;
2.3.2. StratCorp’s shareholders approve the necessary resolutions, and the Company
files the amended Memorandum of Incorporation (“MOI”) increasing the authorised
share capital of the Company to 1 500 000 000 shares, and that the CIPC issues
a certificate of confirmation in respect of that amended MOI;
2.3.3. the JSE approves the circular to shareholders relating to the Specific Issue and the
listing of the 408 824 944 subscription shares on the JSE; 2
2.3.4. the Takeover Regulation Panel approves the circular to shareholders relating to
the Specific Issue and grants exemption to KKI from the obligation to make a
mandatory offer.
3. Issue of shares to KKI
3.1. It is proposed that Stratcorp issues 408 824 944 shares to KKI at 0,5 cents per share on
the terms set out in the Agreement.
3.2. The issue price was determined by the board on 15 July 2015 with reference to the
Company’s negative net asset value of -1.82 cents per share as at 28 February 2015 and
is at a discount of 94.44% to the 30 day volume weighted average price (“VWAP”) of
StratCorp for the 30 days preceding 15 July 2015 of 9 cents per share.
3.3. The shares to be issued will represent 71.9% of StratCorp’s issued shares after the
Specific Issue and will also be an affected transaction as defined in the Companies Act,
2008, but is subject to a waiver of the mandatory offer referred to in 2.3.4 above.
3.4. The new shares will be issued in terms of the current MOI of StratCorp. On listing, all the
issued shares, including the new shares, will be of the same class and will rank pari passu
in all respects.
3.5. After the Specific issue, KKI will hold 471 897 784 (76,89%) of the increased issued
share capital of the Company.
4. Loan
4.1. KKI advanced an amount of R300 000 to StratCorp on 15 July 2015. A further amount of
R700 000 will be advanced at the time that KKI confirms that it is satisfied with the due
diligence.
4.2. The terms and conditions of the loan are set out in the Agreement.
4.3. The loan will be set off against the subscription price of the Specific Issue.
5. Undertakings to vote
Irrevocable undertakings to vote have been obtained from shareholders holding 70 677 272
shares, representing 34.3% of the currently issued shares and 38.37% of the votable shares
(net of the treasury shares). KKI will not be able to vote on the resolution pertaining to the
Specific Issue and the irrevocable undertakings are therefore in respect of 49.4% of the
remaining issued shares (58.35% of the votable shares).
6. Circular and general meeting
A circular containing inter alia full details of the Specific Issue and other matters referred to
above will be posted to shareholders in due course. The circular will contain a notice of
general meeting of shareholders to vote on the various matters referred to above.
Centurion
17 July 2015
Designated Adviser
Exchange Sponsors
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