BRAINWORKS LIMITED - Terms announcement regarding the sale of shares in GetSure Life Assurance (Private) Limited
10 May 2018 14:52
BWZ 201805100039A
Terms announcement regarding the sale of shares in GetSure Life Assurance (Private) Limited

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


TERMS ANNOUNCEMENT REGARDING THE SALE OF SHARES IN GETSURE LIFE ASSURANCE (PRIVATE)
LIMITED


1.    INTRODUCTION AND CLASSIFICATION OF THE TRANSACTION

      The board of directors of Brainworks (“the Board”) hereby advises shareholders that Brainworks
      Capital Management (Private) Limited (“Brainworks Capital Management”), being a wholly
      owned subsidiary of the Company, has entered into a Share Sale and Purchase Agreement (“the
      Agreement”) with Nhaka Life Assurance Company (Private) Limited (“Nhaka”) in terms of which
      Brainworks Capital Management will dispose of its 100% equity investment in GetSure Life
      Assurance (Private) Limited (“GetSure”), comprising 200 000 000 ordinary shares (“Sale
      Shares”) to Nhaka for a total purchase consideration of US$6 855 043 (“the Transaction”).

      The Transaction is classified as a category 2 transaction in terms of the Listings Requirements of
      the JSE Limited and accordingly does not require approval by the Company’s shareholders.

2.    RATIONALE FOR THE TRANSACTION

      It is the Company’s strategy going forward to focus on and expand its core business in Zimbabwe
      being hospitality, real estate and related investments, and therefore to exit its investments in
      the financial services industry, which are considered by the Board to be non-core investment
      areas.

      The funds raised pursuant to the Transaction and the liquidation of its other financial services
      assets will be applied towards reducing short term debt in the Company, thereby improving the
      Company’s balance sheet and positioning it for growth going forward.

3.    OVERVIEW OF GETSURE

      GetSure is a private company registered in Zimbabwe which is currently licensed as a life
      insurance company.

      GetSure was granted its operating licence in December 2014 by the Insurance and Pension
      Commission of Zimbabwe (“IPEC”) and commenced operations in August 2015.

      GetSure also holds 4.47% shares in GetBucks Microfinance Bank Limited (“GetBucks”), being 48
      908 810 shares in GetBucks. GetBucks (previously GetBucks Financial Services Limited) is a public
      company registered in Zimbabwe which listed on the Zimbabwe Stock Exchange in January 2016.
      GetBucks is a technology driven, deposit-taking microfinance bank.

4.    INFORMATION RELATING TO NHAKA
      Nhaka is a private company registered in Zimbabwe whose address is 9 Exhall Road, Greystone
      Park, Harare, Zimbabwe. The shareholders and directors of Nhaka are not related to Brainworks
      or its subsidiaries (“the Group”), or to any directors of the Group.

5.    CONDITIONS PRECEDENT

     The Transaction is subject, inter alia, to:
     • IPEC approval of the terms of the Agreement;
     • Nhaka shall have assumed a loan made by GetSure to Brainworks Capital Management to the
       value of US$ US$4 839 657 (“GetSure Liability”); and
     • GetSure shall have entered into an off-exchange transaction for the sale of 10 833 333 shares
       in GetBucks to GetSure (Proprietary) Limited (RSA) in full settlement of the debt due by
       GetSure to GetSure (Proprietary) Limited (RSA).

6.    PURCHASE CONSIDERATION

      The total purchase consideration for the Sale Shares is US$6 855 043, to be settled as follows:

     • US$200 000 payable on or before 30 June 2018;
     • the assumption by Nhaka of the GetSure Liability; and
     • a deferred purchase consideration of no more than US$1 815 386, to be settled through the
       proceeds of the Private Placement (as described below) (“the Deferred Purchase
       Consideration”).

      The Deferred Purchase Consideration will not attract any interest.

7.    OTHER ASPECTS TO THE AGREEMENT

      The Agreement contemplates, after the implementation of the Transaction, that a further
      48 908 810 shares in GetBucks, constituting 4.47 % of the issued share capital in GetBucks and
      the balance of GetBucks shares held by GetSure, will be sold by GetSure on terms and conditions
      that are satisfactory to Brainworks Capital Management (“GetBucks Placement Shares“). The
      net value of such sale will be used to settle the Deferred Purchase Consideration (“Private
      Placement”).
      GetSure has entered into a rolling 60-day contract with a third party IT service provider (“IT
      Service Provider”) to provide various services based on the contract for services entered
      between GetSure and IT Service Provider on 6 March 2018.Brainworks Capital Management
      will be liable for the costs of termination equalling ZAR 240,000.00 provided Brainworks Capital
      Management is given notice of such termination on the Effective Date. Such settlement will be
      made within 7 days of receipt of the Deferred Purchase Consideration provided that Nhaka may
      elect to set this amount off against the Deferred Purchase Consideration.

      GetSure Life is indebted to the IT Provider for an additional amount of ZAR525 000 and
      Brainworks Capital Management will reimburse GetSure this amount within 7 days of receipt of
      the Deferred Purchase Consideration provided that Nhaka may elect to set this amount off
      against the Deferred Purchase Consideration
      In terms of the Agreement Brainworks Capital Management shall settle certain other amounts
      owed to Getsure by Brainworks Capital Management and related parties totalling not more than
      $704 747.52 once the Deferred Purchase Consideration is received.

8.    FINANCIAL INFORMATION RELATING TO THE TRANSACTION

      GetSure reported an audited net loss after tax of US$433 725 for the financial year ended 31
      December 2017, and net assets of US$3 148 696 as at 31 December 2017, being the last
      financial year-end of GetSure.

      GetBucks reported an audited net profit after tax of US$3.6 million for the financial year ended
      30 June 2017, and net assets of US$13.5 million as at 30 June 2017, being the last financial year-
      end of GetBucks.

      The above financial information is based on the audited historical financial information of
      GetSure and GetBucks, calculated in accordance with International Financial Reporting
      Standards and the Companies Act (Chapter 24:03).

9.    EFFECTIVE DATE

      The Effective Date of the Transaction will be deemed to be the date when the conditions
      precedent set out in the Agreement been met or waived (as the case may be) or such later date
      as may be agreed in writing between the parties to the Transaction.

10.   OTHER TERMS

      Warranties that are standard for agreements of this nature are contained in the Agreement.


Ebène, Mauritius
10 May 2018

Sponsor
Questco Corporate Advisory Proprietary Limited

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