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Small Related Party Transaction
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”)
SMALL RELATED PARTY TRANSACTION
1. INTRODUCTION
Shareholders are advised that on 31 May 2019, the Company and its wholly-owned
subsidiary African Dawn Property Transfer 1 Proprietary Limited (“PTF 1”), entered into
an agreement (“Agreement”) with Graham Brian Hope (“G Hope”), a director of and a
related party to the Company, in terms of which G Hope grants PTF 1 an irrevocable put
option (“Put Option”) to sell certain claims and/or rights of action of whatsoever nature,
owned by PTF 1 against certain creditors including PTF 1’s entitlement to any securities
furnished in connection with such claims (“Option Claims”) for an option claims
consideration equal to the aggregate carry value of the Option Claims as at 28 February
2019, being R1 237 396 (“Option Claims Consideration”).
The Put Option may be exercised at the discretion of PTF 1 within a period of 90 calendar
days from the date of signature of the Agreement. As at the date of this announcement,
PTF 1 has not exercised the Put Option.
2. RATIONALE FOR THE EXERCISE OF THE PUT OPTION
The exercise of the Put Option will further reduce uncertainties arising from collecting the
Option Claims for the Afdawn group of companies (“Group”), reduce the exposure of the
Company to the loan owed by the Company to G Hope and further clean up the Statement
of Financial Position of the Group. This should enhance the Group’s ability to attract
further future funding for new revenue opportunities.
OPTION CLAIMS CONSIDERATION
Should PTF 1 receive any payments in respect of the Option Claims before PTF 1
exercises the Put Option (“Interim Payments”), the Option Claims Consideration shall
reduce by an amount equal to such Interim Payments.
The Option Claims Consideration will be set off against the outstanding balance of the
loan owed by the Company to G Hope.
3. CONDITIONS PRECEDENT
The Put Option is not subject to any conditions precedent.
4. OPTION EXERCISE DATE
The Put Option may be exercised within a period of 90 calendar days from the date of
signature of the Agreement, failing which the Put Option shall automatically lapse.
5. FINANCIAL INFORMATION
The value of the Option Claims as at 28 February 2019, being the date of the last
consolidated audited annual financial statements, was R1 237 396.
No income was generated from the Option Claims for the period ended 28 February 2019,
based on the consolidated audited annual financial statements of Afdawn for the year
ending 28 February 2019, which were prepared in terms of IFRS.
6. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains warranties by the Company and PTF 1 in favour of G Hope which
are standard for a transaction of this nature.
7. CLASSIFICATION OF THE PUT OPTION
In terms of the JSE Limited Listings Requirements, G Hope is a “related party” of the
Company by virtue of the fact that he is a director of the Company.
The Put Option will be classified on the date on which the Put Option is exercised by PTF
1.
3 June 2019
Designated Adviser
PSG Capital
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