BRAINWORKS LIMITED - Disposal by the Company of Remaining Interest in Getbucks Microfinance Bank Limited

Release Date: 20/07/2018 16:55
Code(s): BWZ
 
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Disposal by the Company of Remaining Interest in Getbucks Microfinance Bank Limited

BRAINWORKS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: 115883 C1/GBL)
Share Code: BWZ ISIN: MU0548S00000
(“the Company”)


DISPOSAL BY THE COMPANY OF REMAINING INTEREST IN GETBUCKS MICROFINANCE BANK LIMITED


1. INTRODUCTION AND CLASSIFICATION OF THE TRANSACTION

The board of directors of Brainworks (“the Board”) hereby advises shareholders that it has, together
with Brainworks Capital Management Private Limited (“Brainworks Capital”), a wholly owned
subsidiary of Brainworks (with the Company and Brainworks Capital Management being collectively
referred to as “Brainworks”), entered into the following transactions for the disposal of its shares in
GetBucks Microfinance Bank Limited (a company listed on the Zimbabwe Stock Exchange)
(“GetBucks”):

     -    the disposal of 16 343 731 ordinary shares in GetBucks at a price of USD 0.030 per GetBucks
          share to Stodaflo Proprietary Limited (“Stodaflo”) in exchange for which Stodaflo has assumed
          certain liabilities and obligations of Brainworks owing to GetBucks Limited (Mauritius) under
          a promissory note, amounting to USD 490 311.92 (R6 613 464.46 at the date of this
          announcement) (“Promissory Note Debt”) (“the Stodaflo Disposal”); and

     -    the disposal of 2 253 179 ordinary shares in GetBucks to Fodnort Proprietary Limited, a
          company incorporated in Botswana with registration number CO 2018/3083, a related party
          to Brainworks, at a price of USD 0.033299 per share (“the Fodnort Disposal”),

 (collectively the “Transactions”).


2. RATIONALE FOR THE TRANSACTION

It is the Company’s strategy, as communicated in previous announcements, is to focus on and expand
its core business in Zimbabwe being hospitality, real estate and related investments, and therefore to
exit its investments in the financial services industry, which are considered by the Board to be non-
core investment areas.

Following the above Transactions, Brainworks has exited its investment in GetBucks.


3. CONSIDERATION AND CATEGORISATION

In terms of the Stodaflo Disposal, 16 343 731 shares in GetBucks were disposed of at a price of
USD 0.030 cents per share, resulting in a total consideration of USD 490 311.92 (R6 613 464.46 at the
date of this announcement), settled by Stodaflo assuming the Promissory Note Debt.

In terms of the Fodnort Disposal, 2 253 179 shares in GetBucks were disposed of at a price of
USD 0.033299 cents per share, for which Brainworks and/or Brainworks Capital has received a total
cash consideration of USD 75 030.86 (R1 012 037.25 at the exchange rate at the date of this
announcement).
The Transactions, when aggregated with previous disposals of Brainworks’ shares in GetBucks over
the 12 months preceding this announcement, are classified as category 2 transactions in terms of
section 9 of the Listings Requirements of the JSE Limited (“Listings Requirements”). The Stodaflo
disposal is not a related-party transaction in terms of the Listings Requirements, as Stodaflo is not a
related party as defined by the Listings Requirements.

Although Fodnort is classified as a related party in terms of the Listings Requirements, the
categorisation percentage ratio is less than 0.25% of the Company’s market capitalisation, and as such,
the related party transaction provisions set out in the Listings Requirements do not apply in terms of
paragraph 10.6 of the Listings Requirements. Brainworks has not entered into any other transactions
with Fodnort or its associates in the preceding 12 months.


4. APPLICATION OF CONSIDERATION RECEIVED

The funds raised pursuant to the Transactions will or have been applied towards reducing short term
debt in the Company. The Transactions are aimed at improving the Company’s balance sheet and
positioning it for growth going forward.


5. OVERVIEW OF GETBUCKS

GetBucks (previously GetBucks Financial Services Limited) is a public company registered in Zimbabwe
which listed on the Zimbabwe Stock Exchange in January 2016. GetBucks is tecnhology driven, and is
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 Transactions, the Company together with Brainworks Capital held 1.7% of the issued share
capital of GetBucks. Post the Transaction, the Company and Brainworks Capital will have completely
disposed of their interest and shall hold 0.00% of the issued share capital in GetBucks.


6. FINANCIAL INFORMATION OF GETBUCKS

GetBucks reported net profit after tax of US$2.58 million for the six months ending December 2017
(being R34.7 million at the date of this annoumcement), and total net assets of US$15.5 million as at
31 December 2017 (being R208.5 million at the date of this announcement), being the last financial
reporting period of GetBucks.

The above financial information is based on the unaudited interim 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.


7. EFFECTIVE DATE

The effective date of the Stodaflo Disposal was 13 July 2018.

The effective date for the Fodnort Disposal was 16 July 2018.


8. CONDITIONS PRECEDENT

The Transactions are no longer subject to the approval and/or waiver of any suspensive conditions.


9. OTHER SIGNIFICANT TERMS

Warranties and other terms that are standard for transactions of this nature were agreed amongst
the parties to the Transactions.



Ebène, Mauritius
20 July 2018

Sponsor
Questco Corporate Advisory Proprietary Limited

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