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Terms announcement regarding related party transactions
Brainworks Limited
(Incorporated in the Republic of Mauritius)
(Registration number: 115883 C1/GBL)
Share Code: BWZ ISIN: MU0548S00000
(“Brainworks” or “the Company”)
TERMS ANNOUNCEMENT REGARDING RELATED PARTY TRANSACTIONS BETWEEN WHOLLY-OWNED
SUBSIDIARIES AND ASSOCIATES OF DIRECTORS
1. INTRODUCTION AND CLASSIFICATION OF THE TRANSACTIONS
The board of directors of Brainworks (“the Board”) hereby advises shareholders that Brainworks
Capital Management Private Limited (“Brainworks Capital”) and GetSure Life Assurance Private
Limited (“GetSure”), both being wholly owned subsidiaries of the Company (“the Subsidiaries”), have
entered into transactions with certain associates of directors of the Company (“the Associates”), for
the disposal of 163 769 298 shares held by the Subsidiaries in GetBucks MicroFinance Bank Limited
(“GetBucks”) to the Associates, constituting 14.98% of the total issued share capital of GetBucks (“the
Transaction”).
As the various transacting parties are associates of certain of the non-executive directors of the
Company, the Transaction is classified as a related party transaction in terms of paragraph 10.1(b)(vii)
the Listings Requirements of the JSE Limited (“Listings Requirements”) and will, accordingly, require
approval by shareholders of the Company, excluding the related parties and their associates.
2. RATIONALE FOR THE TRANSACTION
Brainworks has placed 9 088 677 of its treasury shares with various institutional investors in
Zimbabwe, as referred to in the SENS announcement dated 26 October 2017, subject to receipt of
approval by the Reserve Bank of Zimbabwe.
The necessary Reserve Bank and other approvals have not yet been obtained and accordingly
Brainworks has, to date, not been able to deliver the shares subscribed for to the institutional
investors.
In order to be in a position to deliver to the said institutional investors’ shares in Brainworks, certain
directors of the Company have agreed to dispose of their Brainworks shares to the institutional
investors. Shareholders are referred to the directors’ dealing announcement released on SENS, dated
8 December 2017, detailing information relating to the directors’ dealings.
The directors have further agreed to acquire the Company’s investment in GetBucks from the
Company using the consideration arising from the above directors’ dealings.
The Company’s strategy is to focus on its core asset base, being hospitality, real estate and related
investments. Accordingly, it is reorganising its investments in financial services and part of its strategy
is to exit its investment in GetBucks.
The funds raised pursuant to the Transaction will be applied towards the restructuring of the
Company’s balance sheet in order to position it for growth going forward.
3. OVERVIEW OF THE TRANSACTION AGREEMENTS
The following agreements, dated 30 November 2017, and addendums thereto, dated 12
December 2017, have been entered into:
3.1. GetSure agreement with Ecsponent Zimbabwe (Private) Limited (“Ecsponent Zimbabwe”), a
company wholly owned by a family trust of George Manyere, a non-executive director of the
Company, in terms of which:
2.1.1 GetSure will dispose of 3 826 784 ordinary shares in GetBucks to Ecsponent
Zimbabwe, for a total purchase consideration, payable in cash, of USD127 432 (R1 735
624 at an USD/ZAR exchange rate of USD1/R13.62 at the date of this announcement)
(“the Ecsponent Zimbabwe First Agreement);
2.1.2 GetSure will dispose of 2 702 703 ordinary shares in GetBucks to Ecsponent Zimbabwe
for a total purchase consideration, payable in cash, of USD90 000 (R1 225 800 at an
USD/ZAR exchange rate of USD1/R13.62 at the date of this announcement) (“the
Ecsponent Zimbabwe Second Agreement);
2.1.3 GetSure will dispose of 54 083 027 ordinary shares in GetBucks to Ecsponent
Zimbabwe for a total purchase consideration, payable in cash, of USD1 800 965
(R24 529 143 at an USD/ZAR exchange rate of USD1/R13.62 at the date of this
announcement)) (“the Ecsponent Zimbabwe Third Agreement); and
3.2. GetSure agreement with TDC Investment Trust, a discretionary family trust of Walter
Kambwanji, a non-executive director of the Company (“TDC Trust”), in terms of which GetSure
will dispose of 35 589 216 ordinary shares in GetBucks to TDC Trust for a total purchase
consideration, payable in cash, of USD1 185 121 (R16 141 348 at an USD/ZAR exchange rate of
USD1/R13.62 at the date of this announcement) (“the TDC Trust Agreement”); and
3.3. Brainworks Capital agreement with the Mathew Daniels Trust, a discretionary family trust of
Walter Kambwanji, (“the MD Trust”), in terms of which Brainworks Capital will dispose of
67 567 568 ordinary shares in GetBucks to the MD Trust for a total purchase consideration,
payable in cash, of USD2 250 000 (R30 645 000 at an USD/ZAR exchange rate of USD1/R13.62
at the date of this announcement) (“the MD Trust Agreement”),
(collectively “the Transaction Agreements”).
4. OVERVIEW OF GETBUCKS
GetBucks (previously GetBucks Financial Services Limited) is a public company registered in Zimbabwe
which listed on the Zimbwe Stock Exchange in January 2016. GetBucks is tecnhology driven, a deposit-
taking and money lending microfinance institution.
As a FinTech financial services company, GetBucks embraces technology as a means to provide
financial products and services to customers.
The GetBucks vision is to achieve financial inclusion in all its markets by breaking the paradigm of
clients having to visit a bank branch to access services. The ultimate goal is to deliver a basket of
financial products that meet most of the financial needs of customers across geographies.
Current services offered range from micro-finance loans, a mortgage product, SME banking products
and saving and money market accounts.
GetBucks operates in 14 locations across Zimbabwe and employs 65 employees, with a further 173
agents stationed across Zimbabwe.
Prior to the Transaction, the Subsidiaries held 31.14% of the issued share capital of GetBucks. Post
the Transaction, the Subsidiaries will hold 16.16% of the issued share capital.
5. FINANCIAL INFORMATION OF GETBUCKS
GetBucks reported net profit after tax of US$3.6 million for the financial year ended 30 June 2017, and
net assets of US$13.5 million as at 30 June 2017, being the last financial year-end of GetBucks.
The above financial information is based on the audited historic financial information of GetBucks,
calculated in accordance with International Financial Reporting Standards, the Companies Act
(Chapter 24:03) of Zimbabwe and the Microfinance Act of Zimbabwe.
6. EFFECTIVE DATE
The effective date of the Transaction will be the date on which the last condition precedent, details of
which are set out below, is met.
7. CONDITIONS PRECENDENT
The Transaction is subject to the approval of shareholders of the Company in line with the JSE Listings
Requirements.
8. OTHER TERMS
Warranties that are standard for agreements of this nature are contained in the Transaction
Agreements.
9. CIRCULAR TO SHAREHOLDERS AND FAIRNESS OPINION
A circular, prepared in terms of the Listings Requirements, and containing a notice of a general
meeting of shareholders and the requisite fairness opinion from an independent expert, will be
dispatched to shareholders in due course in order for shareholders to consider and, if deemed fit,
approve the Transaction.
Ebène, Mauritius
13 December 2017
Sponsor
Questco Corporate Advisory Proprietary Limited
Date: 13/12/2017 05:36:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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