| Wed 15 Dec 2010, 15:00 | | ADW - African Dawn Capital Limited - Increase in authorised share capital |
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ADW
ADW
ADW - African Dawn Capital Limited - Increase in authorised share capital
AFRICAN DAWN CAPITAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/020520/06)
JSE code: ADW
ISIN: ZAE000060703
("Afdawn" or "the group" or "the company")
- Increase in authorised share capital
- Notice of posting of circular
- Renewal of cautionary announcement
1 Introduction
Shareholders are referred to various cautionary announcements released on
SENS wherein it has been announced that the company is in negotiations with
potential liquidity providers. Furthermore, on 17 November 2010, the
company announced that it had reached an agreement in principal with the
the National Housing Finance Corporation Limited ("NHFC") on the resolution
of the long standing issue regarding the R36 million facilities provided to
Afdawn and Nexus Personnel Finance (Pty) Limited and for which Afdawn had
stood as surety and which is in default. In terms of the agreement, NHFC is
prepared to accept a R10 million preference share issued by Elite Group
(Pty) Limited, Afdawn`s microfinance subsidiary, and which has other
performing facilities with NHFC, and a cash settlement of R20 million in
full and final settlement of the R36 million facility. Additionally, the
security issued by Afdawn in respect of the facilities will be cancelled
("the agreement").
The agreement allows the directors to proceed with the raising of
additional capital without material uncertainty facing the company.
Shareholders are cautioned that legal agreements outlining the definitive
terms of the agreement are yet to be finalised.
In order to facilitate the additional financing and future growth of the
company, shareholders are required to:
- authorise the increase in the company`s authorised share capital in
terms of section 75 of the Companies Act; and
- place the company`s authorised but unissued shares under the control
of the board of directors in accordance with section 221 of the
Companies Act for the purpose of raising additional capital.
The purpose of the circular is to furnish Afdawn shareholders with the
relevant information to enable them to make an informed decision as to
whether or not they should vote in favour of the special and ordinary
resolutions set out in the notice of general meeting which forms part of
the circular to shareholders to be posted on Wednesday, 15 December 2010.
2 Rationale for the increase in authorised share capital
Afdawn`s published results for the 6 months ended 31 August 2010 showed a
substantial improvement in profitability. This improvement was partly due
to the steps taken by the board to consolidate and rationalise the business
operations of the group, and due to implementation of proper governance.
The funding requirements of the group are primarily to settle the cash
portion of the agreement and to provide existing operating subsidiaries
within the group funding for organic growth. The board has also identified
various other transactions which, in due course would require funding.
3 Circular to shareholders
In order to facilitate the additional financing and future growth of the
company, a circular is to be posted to shareholders on Wednesday, 15
December 2010, wherein shareholders are required to:
- authorise the increase in the company`s authorised share capital in
terms of section 75 of the Companies Act; and
- place the company`s authorised but unissued shares under the control
of the board of directors in accordance with section 221 of the
Companies Act for the purpose of raising additional capital.
The purpose of the circular is to furnish Afdawn shareholders with the
relevant information to enable them to make an informed decision as to
whether or not they should vote in favour of the special and ordinary
resolutions set out in the notice of general meeting which forms part of
the circular.
4 Notice of general meeting
Notice is hereby given that a general meeting of Afdawn shareholders will
be held at Sasfin, 29 Scott Street, Waverley, Johannesburg at 10:00 on
Friday, 14 January 2011 for the purpose of considering the business as set
out in the notice of general meeting of shareholders.
5 Renewal of cautionary announcement
Shareholders are referred to the cautionary announcements,the last of which
was dated 17 November 2010, and are advised that discussions are ongoing
with potential liquidity providers.
Shareholders are therefore advised to continue exercising caution when
dealing in the company`s securities until a further announcement is made in
regard to this matter.
Johannesburg
15 December 2010
Designated Advisor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 15/12/2010 15:00:01 Produced by the JSE SENS Department.
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