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BRAINWORKS LIMITED - Declaration and finalisation announcement in respect of the rights offer and posting of a circular

Release Date: 27/08/2019 11:06
Code(s): BWZ     PDF:  
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Declaration and finalisation announcement in respect of the rights offer and posting of a circular

Brainworks Limited
(Incorporated in the Republic of Mauritius)
(Registration number: 115883 C1/GBL)
Share Code: BWZ ISIN: MU0548S00000
(“Brainworks” or “the Company”)

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN AND ANY OTHER JURISDICTION WHERE
EXTENSION OR MAKING THE RIGHTS OFFER WOULD BE UNLAWFUL OR IN CONTRAVENTION OF
APPLICABLE LAW. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES
IN THE UNITED STATES OR ANY OTHER JURISDICTION.

DECLARATION AND FINALISATION ANNOUNCEMENT IN RESPECT OF THE RIGHTS OFFER AND
POSTING OF A CIRCULAR

Shareholders are hereby advised that Brainworks intends to raise up to ZAR85 799 980.50 by way of a
renounceable rights offer (“the Rights Offer”).

1.   SALIENT TERMS OF THE RIGHTS OFFER

1.1. In terms of the Rights Offer, 13 199 997 new ordinary Brainworks shares (“Rights Offer Shares”) will be
     offered to Brainworks shareholders recorded in the share register at the close of business on Friday,
     06 September 2019 (“Record Date”), at a Rights Offer Issue Price of R6.50 per Rights Offer Share, in the ratio
     of 1 Rights Offer Share for every 6.70691 Brainworks ordinary shares (“Brainworks Shares”) held on the
     Record Date.

1.2. The Rights Offer Issue Price represents a discount of approximately 19% to the closing price of Brainworks
     Shares on the JSE on Monday, 26 August 2019, the day prior to the release of this Rights Offer declaration
     and finalisation announcement on SENS.

1.3. Excess applications for Rights Offer Shares will not be allowed. The Rights Offer is not conditional upon any
     minimum subscription being obtained.

1.4. The Rights Offer Shares to be issued will rank pari passu with the existing issued Brainworks Shares.

1.5. Only whole numbers of Rights Offer Shares will be issued and accordingly fractional entitlements of 0.5 or
     greater will be rounded up and less than 0.5 will be rounded down.

2.   RATIONALE FOR THE RIGHTS OFFER

2.1. The Rights Offer forms part of a broader capital restructuring of the Company to extinguish materially all third-
     party debt. The capital restructure will involve the conversion of certain loans with existing Shareholders into
     new Shares at a conversion price of R6.50. The conversion of such loans into new Shares requires the prior
     approval of Shareholders and, accordingly, a general meeting of Shareholders will be convened, the details of
     which will be contained in a circular to Shareholders to be distributed prior to the close of the Rights Offer.
     Subject to the passing of the resolutions by the requisite majority of Shareholders, the conversion of the loans
     will take place after the Rights Offer has closed.

2.2. The proceeds from the Rights Offer will be used by Brainworks to settle an expensive loan held by the
     Company. The loan matures on 17 October 2019.

2.3. The settling of the loan will assist the Company to reduce its level and cost of debt which the board of directors
     believes will have positive impact on earnings and will position the Company to attract new equity investors.
3.   SALIENT DATES AND TIMES

                                                                                                                 2019
 Circular published on the Brainworks website on                                                  Monday, 2 September
 Last day to trade in Shares in order to participate in the Rights Offer                         Tuesday, 3 September
 (cum rights)
 Listing of and trading in the letters of allocation under the JSE Code BWZN                   Wednesday, 4 September
 and ISIN MU0548S00018 on the JSE commences at 09:00 on
 Shares commence trading ex-rights on the JSE at 09:00 on                                      Wednesday, 4 September
 Circular distributed to certificated shareholders together with a Form of                      Thursday, 5 September
 Instruction on
 Record Date for the Rights Offer                                                                 Friday, 6 September
 Rights Offer opens at 09:00 on                                                                   Monday, 9 September
 Dematerialised Shareholders accounts at their CSDP or Broker credited with                       Monday, 9 September
 their entitlement of letter of allocation on
 Certificated Shareholders’ letters of allocation credited to an electronic                       Monday, 9 September
 account held at the transfer secretaries on
 Circular distributed to dematerialised shareholders                                              Monday, 9 September
 Last day to trade in letters of allocation on the JSE                                          Tuesday, 17 September
 Certificated shareholders wishing to sell all or part of their Entitlement must                Tuesday, 17 September
 lodge their form of instruction with the transfer secretaries by 12:00
 Listing of, and trading in, the Rights Offer Shares on the JSE commences at                  Wednesday, 18 September
 09:00 on
 Certificated shareholders wishing to renounce or subscribe for all or part of                   Friday, 20 September
 their entitlement must lodge their form of instruction together with their
 payment with the transfer secretaries by 12:00
 Record Date for the letters of allocation                                                       Friday, 20 September
 Rights Offer closes at 12:00 on                                                                 Friday, 20 September
 Rights Offer Shares issued and posted to shareholders in certificated form                      Monday, 23 September
 (where applicable) on or about
 Dematerialised shareholders’ CSDP or Broker accounts updated and                                Monday, 23 September
 credited with Rights Offer Shares on
 Results of Rights Offer announced on SENS                                                       Monday, 23 September

Notes:
1.   Shareholders may not dematerialise or rematerialise their Shares between Wednesday, 4 September 2019, and Friday, 6
     September 2019, both dates inclusive.
2.   All references to dates and times are to local dates and times in South Africa.
3.   The above dates and times are subject to amendment. Any such amendment will be released on SENS.

4.   CSDPs effect payment in respect of dematerialised Shareholders on a delivery-versus-payment method.
4.   FOREIGN SHAREHOLDERS

Any qualifying shareholder resident outside the common monetary area who receive this Circular and form of
instruction should obtain advice as to whether any governmental and/or other legal consent is required and/or any
other formality must be observed to enable a subscription to be made in terms of such Form of Instruction.

The Rights Offer does not constitute an offer in any jurisdiction in which it is illegal to make such an offer and this
Circular and Form of Instruction should not be forwarded or transmitted by you to any person in any territory other
than where it is lawful to make such an offer.

The Rights Offer Shares have not been and will not be registered under the Securities Act of the United States of
America. Accordingly, the Rights Offer Shares may not be offered, sold, resold, delivered or transferred, directly or
indirectly, in or into the United States or to, or for the account or benefit of, United States persons, except pursuant
to exemptions from the Securities Act. This Circular and the accompanying documents are not being, and must not
be, mailed or otherwise distributed or sent in, into or from the United States. This Circular does not constitute an
offer of any securities for sale in the United States or to United States persons.

The Rights Offer contained in this Circular does not constitute an offer in the District of Columbia, the United States,
the Dominion of Canada, the Commonwealth of Australia, Japan or in any other jurisdiction in which, or to any
person to whom, it would not be lawful to make such an offer (“Non-qualifying Shareholder”). Non-qualifying
Shareholders should consult their professional advisors to determine whether any governmental or other consents
are required, or other formalities need to be observed to allow them to take up the Rights Offer Shares or trade their
entitlement.

Shareholders holding Brainworks Shares on behalf of persons who are Non-Qualifying Shareholders, are
responsible for ensuring that taking up the Rights Offer, or trading in their entitlements under that offer, do not
breach regulations in the relevant overseas jurisdictions.

To the extent that Non-qualifying Shareholders are not entitled to participate in the Rights Offer as a result of the
aforementioned restrictions, such Non-qualifying Shareholders should not take up their Rights Offer entitlement or
trade-in their Rights Offer entitlement and should allow their Rights in terms of the Rights Offer to lapse.

5.   RIGHTS OFFER CIRCULAR

A Circular, containing full details of the Rights Offer and a form of instruction in respect of a letter of allocation, will
be posted to Certificated Shareholders on Thursday, 5 September 2019.

The Circular will be distributed to dematerialised shareholders on Monday, 9 September 2019.

The      Circular  will   be     available    in     electronic   form     from    the    Company’s    website
(http://www.brainworkscapital.com/investor-relations/shareholder-circulars) on Monday, 2 September 2019.


Grand Baie, Mauritius
27 August 2019

Transaction sponsor                                          Legal advisor
Questco (Pty) Ltd                                            Bowmans

Date: 27/08/2019 11:06:00
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