UNICORN CAPITAL PARTNERS LIMITED - Terms announcement regarding the acquisition by Unicorn of Thebe Turnstone Drilling Proprietary Limited

Terms announcement regarding the acquisition by Unicorn of Thebe Turnstone Drilling Proprietary Limited

Unicorn Capital Partners Limited
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: UCP : ISIN: ZAE000244745
(“Unicorn” or “the Company”)

TERMS ANNOUNCEMENT REGARDING THE ACQUISITION BY UNICORN OF THEBE TURNSTONE DRILLING PROPRIETARY LIMITED

1. INTRODUCTION

The board of directors of Unicorn (“the Board”) is pleased to advise shareholders that Buenti Drilling
Proprietary Limited (“Buenti Drilling”), a wholly owned subsidiary of the Company, has entered into an
agreement to acquire the entire issued share capital of, and shareholder loan claims owing by, Thebe
Turnstone Drilling Proprietary Limited (“Thebe Turnstone Drilling”) for an aggregate consideration of
R21.8 million settled in accordance with paragraph 5 below. (collectively “the Transaction”).

2. OVERVIEW OF THEBE TURNSTONE DRILLING

Thebe Turnstone Drilling provides surface and underground drilling solutions and has an operational
fleet of 17 surface exploration drill rigs, with various drilling range capacities and 8 underground drill
rigs. Of these drill rigs, 14 rigs are currently not deployed on contracts. Thebe Turnstone Drilling has
currently two drilling contracts. More than 500 000 meters were drilled throughout South Africa and
Namibia since the establishment of the company in 2007.

3. RATIONALE FOR THE TRANSACTION

Buenti Drilling forms part of the Geosearch group of companies. Geosearch performs exploration drilling
services in South Africa, Botswana and Mozambique to long-standing blue-chip clients. A gradual
increase in the number as well as the length of contract tenders being issued for exploration drilling was
reported in our June 2018 annual report. The trend continued during the past eight months resulting in
Geosearch’s entire drill rig fleet remaining fully contracted.

With the current upturn in the exploration industry continuing, we believe that it is the right time to
acquire an existing exploration drilling company in South Africa with surplus exploration drilling
equipment. This will provide the Geosearch group of companies with the required additional equipment
and infrastructure to be deployed on existing operations in Botswana and South Africa.

4. CONDITIONS PRECEDENT

The Transaction will be effective from the first business day following the fulfilment of the last condition
precedent, which is expected to be fulfilled by no later than 30 April 2019. The conditions precedent
include:

    •   Thebe Mineral Resources (“TMR”) being irrevocably and unconditionally released from the
        Absa Bank Limited suretyship agreement;

    •   Identified clients providing their consent in writing to the:
            i). change of control; and/or
            ii). resultant change of black shareholding of the Company,
        that will result following the implementation of the Transaction; and

    •   Buenti Drilling receiving sufficient evidence of the unconditional release of the sale shares from
        any security interest created in favour of Rand Merchant Bank for its obligations under the
        banking facility letter agreement.

5. PURCHASE CONSIDERATION

The total purchase consideration in respect of the Transaction is R21.8 million, which shall be
apportioned and allocated as follows:
   • R2.6 million shall be allocated to the shares in Thebe Turnstone Drilling acquired by Buenti
        Drilling pursuant to the Transaction; and
   • R19.2 million, which represents the book value of the loan claims on 28 February 2018, shall
        be allocated to the shareholder loan claims acquired by Buenti Drilling pursuant to the
        Transaction.

The purchase consideration shall be payable by Buenti Drilling to TMR in twenty-four monthly
instalments, the first of which shall be due and payable on the month end following the effective date.

The purchase consideration shall be adjusted upward or downward (as the case may be), in the event
that the difference in the Thebe Turnstone Drilling net working capital amount as at signature date and
the effective date is greater than R0.5 million, limited to a maximum upward adjustment of R1 million.

The outstanding purchase consideration shall earn interest at a rate of 15% per annum compounded
monthly in arrears.

6. FINANCIAL INFORMATION RELATING TO THE TRANSACTION

Thebe Turnstone Drilling reported a net loss before tax of R0.6 million, an after tax loss of R5.9 million
for the 12 months ended 31 March 2018, and net assets of R3.6 million as at 31 March 2018, being the
last financial period end of Thebe Turnstone Drilling.

The book value of loan claims as at 31 March 2018 amount to R15 million.

The above financial information is based on the audited Annual Financial Statements for the year ended
31 March 2018 of Thebe Turnstone Drilling.

These audited Annual Financial Statements have been prepared in accordance with International
Financial Reporting Standards.

7. MEMORANDUM OF INCORPORATION OF THEBE TURNSTONE DRILLING

In compliance with section 9.16 of the JSE Listings Requirements, Unicorn undertakes to ensure that
nothing contained in the memorandum of incorporation of Thebe Turnstone Drilling will frustrate Unicorn
in any way from compliance with its obligations in terms of the JSE Listings Requirements or relieve
Unicorn from compliance with the JSE Listings Requirements.

8. CATEGORISATION

The Transaction is classified as a Category 2 transaction in terms of the JSE Listings Requirements
and therefore not subject to approval by shareholders.

9. OTHER TERMS

The agreement contains warranties that are usual for a transaction of this nature


Johannesburg
15 March 2019
Sponsor and corporate advisor
Questco Corporate Advisory Proprietary Limited

Date: 15/03/2019 02:59:00 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.