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CONDUIT CAPITAL LIMITED - Small Related Party Disposal

Release Date: 01/10/2019 17:48
Code(s): CND     PDF:  
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Small Related Party Disposal

CONDUIT CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/017351/06)
Share code: CND ISIN: ZAE000073128
(“Conduit Capital” or “the Company”)


SMALL RELATED PARTY DISPOSAL


1. INTRODUCTION

   The board of directors of Conduit Capital (“the Board”) wishes to advise shareholders that the Board
   has signed a resolution to approve the disposal of a portion of each of the following listed investments,
   being Calgro M3 Holdings Limited, Finbond Group Limited and Trustco Group Holdings Limited (“the
   Listed Investments”) to the Riskowitz Value Fund LP, a partnership formed in the state of Delaware,
   USA (“the Riskowitz Value Fund”) (“the Purchaser”), which has delegated its investment management
   and decision-making to Protea Asset Management LLC, for a total purchase consideration of
   R34 323 007 (“the Disposal”).


2. THE DISPOSAL

   2.1. Nature of the Disposal
        The Disposal constitutes a portion of Conduit Capital’s listed investments portfolio.
  
   2.2. Rationale for the Disposal
        The disposal will provide additional cash that will be employed in Conduit Capital’s insurance
        subsidiaries in order to fund organic growth opportunities.

   2.3. Purchase Consideration
        The purchase consideration of R34 323 007 was negotiated using the 30-day volume weighted
        average prices and closing prices of the respective Listed Investments as at the date immediately
        preceding the date of sale of the Listed Investments. The sale will be settled in cash.

   2.4. Application of sale proceeds
        The proceeds from the Disposal are to be used to service Conduit Capital’s short-term funding
        requirements as mentioned in the rationale.


3. EFFECTIVE DATE OF THE DISPOSAL

   There are no outstanding conditions on the Disposal and the effective date of the Disposal was once the
   Listed Investments were transferred to the Purchaser, being 30 September 2019.


4. FINANCIAL INFORMATION

   The value of the net assets that are the subject of the Disposal as at 30 June 2019, being the last
   financial year end of Conduit Capital, was R43 095 718. The loss after tax attributable to such net assets
   for the year ended 30 June 2019 was R12 531 526.


5. CLASSIFICATION OF THE DISPOSAL

   The Riskowitz Value Fund is a material shareholder of Conduit Capital and thus the Riskowitz Value
   Fund is considered to be a related party to Conduit Capital in terms of paragraph 10.1(b)(i) of the
   Listings Requirements of the JSE Limited (“JSE Listings Requirements”).
   
   The Disposal is considered to be a small related party transaction in terms of paragraph 10.7 of the JSE
   Listings Requirements and consequently requires a fairness opinion (“Opinion”) from an independent
   professional expert acceptable to the JSE (“Independent Expert”), confirming that the terms of the
   Disposal are fair as far as shareholders of Conduit Capital are concerned.
  
   In terms of paragraph 10.7(b) of the JSE Listings Requirements, the Company has appointed
   Merchantec Capital as the Independent Expert and has provided the JSE with written confirmation from
   the Independent Expert that the terms of the Disposal are fair as far as the shareholders of Conduit
   Capital are concerned. The fairness opinion will be available for inspection at Conduit Capital’s
   registered office for a period of 28 days from the date of this announcement.


1 October 2019

Sponsor
Merchantec Capital

Date: 01/10/2019 05:48:00
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