AFRICAN DAWN CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/020520/06)
Share code: ADW
ISIN Code: ZAE000223194
("Afdawn" or "the Company")
CATEGORY 1 DISPOSAL ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Shareholders are advised that on 30 September 2024 ("Signature Date"), the Company,
through its wholly-owned subsidiary Elite Group (Pty) Limited ("Elite"), entered into an
agreement ("Agreement") with EXG Partners (Pty) Limited (of which the beneficial owners
are Vantage Investment Group) ("EXG" or "Investor"), in terms of which EXG will invest
R5 million ("Initial Investment Amount") through the subscription for ordinary shares in
Elite, comprising 50% of Elite's total issued capital ("Disposal") and further provide a long-
term commercial loan of R15 million to Elite ("Long-Term Loan").
2. DESCRIPTION OF ELITE
Elite is a pioneer and leading Credit Provider, previously Micro Lending, company in South
Africa. The company is operating nationwide, with offices in Gauteng, North-West
Province, Free State and Kwa-Zulu Natal.
The company was instrumental in the establishment of the MFSA (Micro Finance South
Africa) and a driving force in the formation of the National Credit Regulator.
The prime objective of the company is to revolutionize the credit industry, providing a range
of loans to the historically un-banked masses, utilizing state of the art information
technology.
3. CONSIDERATION OF THE DISPOSAL
EXG will invest the Initial Investment Amount of R5 million through the subscription for
ordinary shares in Elite.
4. RATIONALE FOR THE DISPOSAL AND APLICATION OF DISPOSAL
CONSIDERATION
The investment by EXG directly into Elite will provide Elite with the appropriate capital for
the growth and value enhancement of its business, including balance sheet optimization
and various other activities. Furthermore, the Initial Investment and Long-Term Loan will
support Elite in optimising its capital structure through enhanced access to capital as well
as strategic support in growing the business.
5. CONDITIONS PRECEDENT
The Disposal is subject to the fulfilment of the following outstanding conditions precedent
("Conditions Precedent"):
5.1. the Investor shall be entitled to cancel the Agreement at any time prior to the Effective
Date on written notice to Elite if a Material Adverse Change has occurred;
5.2. satisfactory due diligence of Elite and the relevant underlying projects in existence at
date of signature of the Agreement;
5.3. the conclusion of a shareholder's agreement with existing shareholders;
5.4. approval by the Investment Committee of the Investor subject to the above conditions
and documentation requirements; and
5.5. the appropriate Regulatory and Governance approvals as required by the Company
and its shareholders have been received. Including the shareholders of Afdawn
approving the Disposal as a category 1 transaction in terms of the JSE Listings
Requirements and, by no later than 60 days following the signature date, a circular
complying with the JSE Listings Requirements and incorporating a notice of general
meeting being posted to shareholders of Afdawn.
The Conditions Precedent must be fulfilled by not later than 1 February 2025, which date
may be extended by the parties in writing.
6. EFFECTIVE DATE OF THE DISPOSAL
EXG will have 20 consecutive business days (post all regulatory approvals and other
governance requirements) in which to transfer the Initial Investment Amount to the
Company, therefore the effective date is anticipated as being 28 February 2025 ("Effective
Date").
7. FINANCIAL INFORMATION
The value of the net assets of Elite as at 29 February 2024, being the date of the last
audited annual financial statements of Afdawn ("Latest AFS"), was negative R72,667,563.
The audited loss attributable to Elite as at 29 February 2024, was R11,944,819 based on
the Latest AFS, which were prepared in terms of IFRS.
8. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains representations and warranties by the Company in favour of EXG
which are standard for a transaction of this nature.
9. CLASSIFICATION OF THE DISPOSAL
As the Disposal involves the issue of shares by a subsidiary of the Company, and based
on the value of the Initial Investment Amount, it is deemed to be a category 1 disposal in
terms of the JSE Listings Requirements.
As a result, the Disposal is required to be approved by an ordinary resolution of the
shareholders of the Company and accordingly a general meeting of the shareholders of
the Company will be convened.
10. CIRCULAR
A circular containing the full details of the Disposal, incorporating a notice convening the
required general meeting of the shareholders of the Company, will be distributed to
shareholders in due course, at which time the salient dates and times of the Disposal,
including the date of the general meeting, will be announced on SENS.
11. WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the Company's cautionary announcement released on SENS
on 26 September 2024.
Shareholders are hereby advised that as the particulars of the Disposal have now been
announced, caution is no longer required to be exercised by shareholders when dealing
in the Company's securities.
Johannesburg
1 October 2024
Designated Advisor
PSG Capital
Date: 01-10-2024 05:48:00
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