AFRICAN EQUITY EMPOWERMENT INVESTMENTS LIMITED - Dilution of AEEI Shareholding in Bowwood and Main No 180 via Subscription of Shares by Ayo

Dilution of AEEI Shareholding in Bowwood and Main No 180 via Subscription of Shares by Ayo

AFRICAN EQUITY EMPOWERMENT
INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share code: AEE
ISIN: ZAE000195731
("AEEI" or “the Company”)

DILUTION OF AEEI SHAREHOLDING IN BOWWOOD AND MAIN NO 180 PROPRIETARY
LIMITED VIA SUBSCRIPTION OF SHARES BY AYO TECHNOLOGY SOLUTIONS

1. Introduction

AEEI Shareholders (“Shareholders”) are advised that SGT Solutions (Pty) Ltd (“SGT”), a subsidiary
of AYO Technology Solutions Limited (“AYO”), intends to subscribe for 45% of the shares in
Bowwood and Main No 180 Proprietary Limited (“Bowwood”) (“the Transaction”)

Bowwood is currently owned 40% by Sekunjalo Investments Holding (Pty) Ltd (“SIH”) and 60% by
African Equity Empowerment Investments Limited (“AEEI”), which is a 49% shareholder of AYO.

Upon implementation of the Transaction, the shareholding in Bowwood held by AEEI and SIH shall
be diluted to 33% and 22% respectively. The balance of 45% shall be held by SGT.


2. Nature of business

Bowwood was incorporated in South Africa as an investment holding entity whose sole investment
is a 25% plus 1 share shareholding in the ordinary shares in SAAB Grintek Defence (Pty) Ltd
(“SGD”). SGD is a leading South African defence and security company, bringing capabilities
including electronic warfare systems, sensor, technology, command and control, training systems,
avionics, security and support solutions to the African and international markets.

3. The rationale

The Transaction allows AEEI to realise cash and utilise the proceeds from the Transaction to reduce
its current external debt levels.

4. Subscription consideration

SGT will subscribe for 45% of the ordinary equity in Bowwood for a subscription consideration of
R48 million (“the Subscription Consideration”). The Subscription Consideration shall be settled in
cash by SGT. The Transaction results in all existing shareholders in Bowwood being diluted
proportionately.

5. Suspensive Conditions

The Subscription Agreements are subject to the following suspensive conditions:

•   SGT shall have conducted a due diligence investigation to its sole and absolute discretion,
    satisfied with the outcome thereof.
•   SGT agrees to adopt and adhere to the existing constitutional documents.
•   The existing shareholders waive in writing any rights they have or may have in respect to the
    shares, including any option rights and rights of pre-emption and whether such rights arise out of
    the Company’s MOI or any other agreement.
•   To the extent required by the MOI, the existing shareholders or any other party required to
    approve the transaction, pass all of the resolutions necessary to implement the transaction.
•   By the date on which the last of the suspensive condition is fulfilled or waived, as the case may
    be, no material adverse change shall have occurred.

6. Effective Date of the Transaction

The effective date of the Transaction shall be the date upon which all suspensive conditions have
either been fulfilled or waived.

7. Financial information

The value of the net assets that are the subject of the Transaction as at 31 August 2019, being the
last financial year end of Bowwood, was R81 304 210. The profit after tax attributable to such net
assets for the year ended 31 August 2019 was R6 442 789.

The financial information has been extracted from Bowwood’s unaudited financial results for the
year ended 31 August 2019. The above financial information has been prepared in accordance with
International Financial Reporting Standards.

8. CLASSIFICATION OF THE TRANSACTION

The Transaction is classified as a Category 2 transaction in terms of the JSE Listings Requirements
and is, accordingly, not subject to the approval of AEEI shareholders.

Cape Town
1 June 2020

Sponsor
Vunani Sponsors

Date: 01-06-2020 11:40:00
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