African Dawn Capital (JSE:ADW) News - Category 2 Transaction Announcement AFRICAN DAWN CAPITAL LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1998/020520/06) Share code:ADW ISIN: ZAE000223194 (“Afdawn” or “the Company”) CATEGORY 2 TRANSACTION ANNOUNCEMENT 1. INTRODUCTION Shareholders are advised that on 26 January 2021, the Company and its wholly-owned subsidiary African Dawn Property Transfer 2 Proprietary Limited (“PTF 2”), entered into a subscription agreement (“Agreement”) with Charles Frank Meyerowitz and Manuel Jonathan Franck (“Subscribers”). The Agreement provides for the following – • the Subscribers will each subscribe for two hundred shares in PTF 2, which, in aggregate, constitute 80% of the issued share capital of PTF2 for an aggregate subscription amount of R400 (“Subscription Consideration”), resulting in the Company’s shareholding in PTF 2 being diluted to 20% of the issued share capital of PTF 2 (“Subscription”); • the Company has an existing loan claim of R18 181 940 against PTF 2 (“Loan Claim”), of which R15 281 940 will be disposed of to the Subscribers for a consideration of R25 000 (“Disposal Consideration”) with the remaining R2 900 000 of the Loan Claim being retained by Afdawn (“Outstanding Loan Claim”); and • the Subscriber has been granted an option to acquire the Company’s remaining 20% shareholding in PTF 2 (“Call Option”) for the par value of R100 (“Option Consideration”) once the Outstanding Loan Claim has been repaid in full, which Call Option will expire after 5 years from the date of signature of this Agreement, or as agreed to by the parties. (together, the “Transaction”) 2. DESCRIPTION OF PTF 2 PTF 2 was incorporated in South Africa with interests in the financial services industry. 3. RATIONALE FOR THE TRANSACTION Given that PTF 2 is not operating to full potential, there is no reasonable prospect of PTF 2 being able to settle the Loan Claim or to generate a return for the Company. The directors of the Company are of the opinion that there is an opportunity in the existing market to re- build the business and are aligning themselves with existing industry players who can offer funding and skills to implement the strategy. 4. CONSIDERATION The Subscription Consideration, the Disposal Consideration and the Option Consideration (“Consideration”) will be paid in cash to the relevant party. 5. APPLICATION OF THE CONSIDERATION The utilisation of the Consideration shall be determined in due course. 6. CONDITIONS PRECEDENT All conditions precedent have been fulfilled. 7. EFFECTIVE DATE OF THE SUBSCRIPTION The effective date of the Subscription shall be the closing date of the Agreement, which was on 26 January 2021. 8. FINANCIAL INFORMATION The value of the net liabilities of PTF 2 as at 29 February 2020, being the date of the last audited annual financial statements, was R18 442 611 The audited profits after tax attributable to PTF 2 for the year ended 29 February 2020, was R203 633, based on the audited annual financial statements of PTF 2 for the year ended 29 February 2020, which were prepared in terms of IFRS. 9. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT The Agreement contains warranties and indemnities by each party to the other parties and by the Company and PTF 2 in favour of the Subscribers which are standard for a transaction of this nature. 10. CLASSIFICATION OF THE DISPOSAL The Transaction constitutes a category 2 transaction in terms of the JSE Limited Listings Requirements. Johannesburg 27 January 2021 Designated Adviser PSG Capital Date: 27-01-2021 01:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.