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SABVEST LIMITED - Increased investment by Sabvest in DNI-4PL Contracts (Pty) Limited (DNI) through JAA Holdings (Pty) Limited(JAA")

Release Date: 02/04/2019 07:05
Code(s): SBV SVN     PDF:  
 
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Increased investment by Sabvest in DNI-4PL Contracts (Pty) Limited (“DNI”) through JAA Holdings (Pty) Limited(“JAA")

SABVEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/003753/06)
Share code: SBV – ordinary shares / SVN – ‘N’ ordinary shares
ISIN: ZAE000006417 – ordinary shares / ISIN: ZAE000012043 – 'N' ordinary shares
("Sabvest" or "the Company")


INCREASED INVESTMENT BY SABVEST IN DNI-4PL CONTRACTS (PTY) LIMITED ("DNI")
THROUGH JAA HOLDINGS (PTY) LIMITED ("JAA")

 1.   Introduction

      Shareholders are advised that a number of transactions have been concluded as follows:

      -        JAA has increased its investment in DNI from 34,9% to 46%.

      -        Sabvest, which currently owns 28,4% of JAA, will increase its investment in JAA
               to 34,78% in two tranches totaling R118,5m by 29 April and by 29 June 2019.

      -        This will have the effect of increasing Sabvest’s indirect interest in DNI to 16%.

      -        The balance of 65,22% in JAA will be held by AJD Holdings (Pty) Limited, an
               entity owned and controlled by the family of Mr Andrew Dunn, the CEO of DNI.

 2.   Categorisation of the investment

      Sabvest announced its first investment in JAA on 31 October 2018 in an amount of
      R159,7m. This subsequent investment is required to be aggregated with the first
      investment in considering the categorisation of the transactions and has accordingly
      been determined to be a category 2 transaction requiring an announcement in terms of
      section 9.5(a) of the JSE Listings Requirements and Sabvest’s approved investment
      policy.

 3.   Nature of the business of JAA

      JAA is a SPV formed for the sole purpose of owning shares in DNI.

 4.   Nature of the business of DNI

      The primary business of DNI is the provision of technology, logistics and distribution
      services to the telecommunications industry through a network of sales agents and
      special purpose vehicles in urban and rural communities. DNI is a leading distributor of
      pre-paid airtime, mobile subscriber starter packs and sim cards. It is also a distributor of
      cellphones to LSM 1-3 consumers in South Africa. Its other operations include
      Money4Jam, a micro jobbing platform, and International Tower Corporation which
      provides financing for telecommunication tower networks in South Africa.

 5.   Rationale for the increased investment
      Sabvest was previously invested in DNI through JAA in accordance with the
      announcement of 31 October 2018. Sabvest is very satisfied with the performance and
      growth prospects of DNI and accordingly decided to increase its investment when the
      opportunity arose.

 6.   Investment consideration

       6.1     The additional investment in JAA by Sabvest will be R118,5m by way of a
               subscription for additional ordinary shares in JAA.

       6.2     The investment amount will be funded from Sabvest’s cash resources.

 7.    Conditions precedent

       The investment is subject to certain conditions precedent which may be met or can be
       waived by Sabvest at its discretion on or before 29 April 2019.

 8.    Financial effects on Sabvest

       8.1     There will be no effect on the NAV per share as the investment amount and the
               fair value of the investment are expected to be the same on the date of the
               investment.

       8.2     There will be no effect on HEPS and EPS as the projected increase in valuation
               for the first accounting period for fair value purposes is expected to be
               approximately equal to the interest foregone on the cash balances from which
               the investments will be funded.

 9.    Financial profile of DNI

       The following information relates to the audited PAT and NAV of DNI, prepared in terms
       of International Financial Reporting Standards, that would have been attributable to a
       16% look-through equity interest in DNI if it had been held by JAA for the financial year
       ended 30 June 2018:

       9.1 PAT R42,3m

       9.2 NAV R70,1m


Sandton
2 April 2019


Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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