| Thu 8 Dec 2011, 9:00 | | BK1P - BK ONE LIMITED - Development capital-focused private equity company BK |
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JSE
BKONE
BK1P - BK ONE LIMITED - Development capital-focused private equity company, BK
One, lists on The JSE Limited
BK ONE LIMITED
(Formerly Sains Trading (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2011/008103/06)
Share code: BK1P ISIN: ZAE000161352
("BK One" or "the Company")
DEVELOPMENT CAPITAL-FOCUSED PRIVATE EQUITY COMPANY, BK ONE, LISTS ON THE JSE
Limited (the "JSE")
The directors of BK One are pleased to announce that the Company has raised over
R200 million (two hundred million Rand) by way of the listing of over 20,000,000
non-cumulative full participation redeemable preference shares (the "preference
share(s)") at an issue price of R10.00 (ten South Rand) per preference share.
The JSE approved the listing of the entire issued preference share capital of BK
One in the `Preference Share` sector on the Main Board of the JSE under the
abbreviated name `BK One Pref`, JSE preference share code "BK1P", with effect
from the commencement of business on Thursday, 8 December 2011.
BK One was created by Basileus Capital Proprietary Limited ("Basileus"), an
established investment company, and Kwanda Capital Investments Proprietary
Limited ("Kwanda Capital"), a private equity fund manager.
BK One executive director, Dean Richards, commented, "BK One offers a unique
long-term investment opportunity providing one of the few available vehicles for
those wishing to invest in a portfolio of underlying developmental capital, or
private equity, projects and businesses".
These projects and businesses are selected from Basileus` extensive project
pipeline comprising in excess of 45 opportunities across eight sectors. The
Basileus approach is to firstly assess very early stage opportunities using its
own resources, which includes one of South Africa`s largest in-house, private
equity, research and development teams that comprise some 47 people. Thereafter
Basileus advances the project and/or business using its own operational capacity
and capability, deploys additional funding off its own balance sheet, and then
seeks co-investment from a variety of other funds and investors, such as BK One.
At this stage, the projects and businesses would have been comprehensively de-
risked.
BK One was established to meet the growing demand locally and globally for
developmental capital, or private equity opportunities, as part of a diversified
investment portfolio. The compelling investment case for this type of
investment has appeal for a broad spectrum of investors ranging from private
individuals to financial institutions.
Dean Richards added, "Contrary to the norm in South Africa, the preference
shares offer investors an opportunity to access investments in the early to mid-
stages of development, and our focus is on providing growth and development
finance for investments that have passed their initial high-risk phase. This
unique structure with Basileus, together with fund management expertise,
knowledge and advice from Kwanda Capital, will ensure that we have access to an
optimal combination of process, quality projects and a very experienced team of
people that have a proven track record based on a comprehensive process-driven
framework. This includes three independent levels of decision-making".
Basileus` chief executive officer ("CEO"), Julian Williams, said, "Developmental
capital is viewed as development and growth funding for projects and businesses
that have passed their initial high-risk start-up phase, and this strategy
affords optimum potential to identify and capitalise on the `sweet spot` on the
value curve. The developmental capital subset of the private equity industry in
South Africa is currently under-represented. Globally, it has proven to deliver
attractive returns, and BK One is one of the first initiatives to make
developmental capital available to the mainstream investment community and
thereby attract more capital into building businesses and creating much needed
jobs in South Africa."
Other advantages to BK One investors include a very high level of transparency
and due diligence as a result of the robust processes undertaken by Basileus and
Kwanda Capital. Transparency as well as regular communication, site visits and
updates on the projects and business will be a key feature of BK One`s
relationship with its market.
Another unique aspect of the preference share is that a designated broker,
Sanlam Private Investments, has been mandated to facilitate the buying and
selling of the share to the investment community.
The capital raised in the private placement will afford BK One the opportunity
to optimise on long term investments in quality projects, which will generate
the desired long term returns for investors. BK One`s immediate task is to
secure the most suitable projects and businesses for the new investors. The
list of investments includes:
* Pure Ocean Aquaculture: Food shortages driven by a growing population,
changing lifestyles towards healthier eating and dwindling wild marine
stock are among the reasons for this choice of investment. There is clearly
a demand for farmed fish and the challenges in long-term supply points to
aquaculture as the solution. Pure Ocean is a vertically integrated
aquaculture company in the development phase of setting up various sites in
Southern Africa. A land-based re-circulating plant on the east coast of
South Africa is under development and a cage-based project in the Lesotho
Highlands already has fish in the water.
* Avalloy: Avalloy is a South African company operating in a niche market
segment, which is experiencing substantial growth. The Avalloy facility has
world class technology and processes producing super-alloys (high-
performance alloys) for the aerospace, power generation, petroleum and
automobile industries. Avalloy, which is partnered with Rolls-Royce, has
developed to the stage that it has obtained its necessary accreditations
and customer approvals and is now entering its next phase of development.
* TOR Holdings: Tor Construction is a road construction company based in the
Southern Cape, which has recently increased its order book to more than
twice the contract value in the previous year and the highest ever
achieved. Tor Oil Infrastructure is an oil storage and related
infrastructure construction company focused on developing projects
throughout Southern Africa.
Julian Williams added, "Significantly, as the first principal investor, we
invest our own capital into our portfolio; this strategy, together with our
robust investment processes ensures that we select only the best opportunities
we review for inclusion. Basileus` business philosophy is firmly focused on
developmental capital projects that have the potential to become significant
businesses in their own right. Our business model focuses on reducing business
risk through rigorous research and hands-on operational management. We believe
this active management focus on ensuring that the underlying business is
successful will translate into meaningful returns".
Terry Brunton, the CEO of Kwanda Capital, stated that "Our mandate is to
represent the interests of those third party investors participating in various
projects and businesses through investment into BK One. Our working knowledge
and experience of the Basileus investment processes, people and deal pipeline is
a key advantage to ensuring that, when combined with our own independent
investment process, an additional level of investment decision making is
created, which provides investors with a greater level of comfort and optimism".
For further information please contact:
Dean Richards, BK One, 082 809 9996
Julian Williams, Basileus Capital, 083 708 2642
Terry Brunton, Kwanda Capital, 082 905 2822
Johannesburg
8 December 2011
Investment bank and debt sponsor
Nedbank Capital
Communication advisor
Aprio Strategic Communications
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