AFRICAN DAWN CAPITAL LIMITED - Specific Issue of Shares for Cash and Withdrawal of Cautionary Announcement

Specific Issue of Shares for Cash and Withdrawal of Cautionary Announcement

AFRICAN DAWN CAPITAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/020520/06)
Share code: ADW
ISIN: ZAE000223194
(“Afdawn” or “the Company”)


SPECIFIC ISSUE OF SHARES FOR CASH AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT


Shareholders are hereby advised that the Company has entered into a subscription agreement
with Arvesco Proprietary Limited (“Arvesco”), in terms of which Arvesco has agreed to
subscribe for up to a maximum of Afdawn shares, which will constitute 55% of the entire issued
share capital of Afdawn after their issue (“Issue Shares”), for cash at an issue price of 35 cents
per share and for a total consideration of R9,38 million (“Specific Issue”). In part settlement
of the subscription price, Arvesco will provide interim funding to Afdawn by way of a deposit
in the amount of R400 000, which will be refundable should the Specific Issue not proceed.

Arvesco is an investment holding company that seeks complimentary financial businesses
that could create value over and above the individual parts.

The Specific Issue will enable Afdawn and Arvesco to utilise the combination of skills and
experience within Arvesco and Afdawn that could lead to diversified, efficient and sustainable
growth to the benefit of all stakeholders of Afdawn.

It is intended that the subscription consideration will be used -

   (i)    to fund Elite Group Proprietary Limited, a wholly-owned subsidiary of Afdawn
          (“Elite”), being a credit provider in South Africa consisting of micro and personnel
          finance, through 11 front-offices and pay-roll loans, its call-centre, and collections
          in support of its loan book. In addition, Elite runs a collection department which
          deals with recoveries, tracing, collections and all related legal work; and/or

   (ii)   to settle Afdawn and its subsidiaries’ outstanding tax debts with the South African
          Revenue Service or any other outstanding liabilities.

In terms of paragraph 5.51(g) of the Listings Requirements of the JSE Limited, the Specific
Issue requires the approval by way of an ordinary resolution (requiring at least a 75% majority
of the votes cast in favour of such resolution) by all Afdawn shareholders present or
represented by proxy at a general meeting. In addition, in terms of section 41(3) of the
Companies Act, No. 71 of 2008 (“Companies Act”), the Specific Issue requires the approval
by way of a special resolution (requiring at least a 75% majority of the votes cast in favour of
such resolution) by all Afdawn shareholders present or represented by proxy at a general
meeting (referred to collectively as the “Shareholder Approval”).

Arvesco currently does not hold any of the issued shares of Afdawn and is accordingly not
able to exercise any voting rights in respect of Afdawn. Should, however, the Specific Issue
be implemented, the issue of the Issue Shares to Arvesco will result in Arvesco holding an
effective shareholding in Afdawn of approximately 55% of Afdawn’s issued ordinary share
capital, triggering the need for a mandatory offer by Arvesco to the remaining Afdawn
shareholders (“Mandatory Offer”) in terms of section 123 of the Companies Act, unless same
is waived by Afdawn shareholders by way of an ordinary resolution in accordance with the
Companies Regulations, 2011, issued under the Companies Act (“Waiver of the Mandatory
Offer”).

The Specific Issue will be subject to the fulfilment of various conditions precedent, including
inter alia the Shareholder Approval being obtained and the requisite majority of Afdawn
shareholders approving the Waiver of the Mandatory Offer.

A circular containing the full details of the Specific Issue and a notice convening a general
meeting for approval of the Specific Issue and the Waiver of the Mandatory Offer will be
distributed to shareholders in due course.

Shareholders are referred to the Company’s cautionary announcement released on SENS on
25 June 2018. Whereas the particulars of the Specific Issue have now been announced,
caution is no longer required to be exercised by shareholders when dealing in the Company’s
securities.

Johannesburg
6 August 2018

Corporate Advisor and Designated Advisor
PSG Capital

Date: 06/08/2018 03:15:00 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.