African Dawn Capital Limited (the “Company”, “Afdawn” or “Group” ) was founded in 1998 as a micro finance business. Following its listing on the AltX in 2004, it grew into a niche finance provider specialising in micro finance, debtor discounting and structured property finance.
Since 2014 the Company has undergone significant changes to position itself for a new future. The Group had an asset base of R 96million, which comprised mostly distressed assets and liabilities of R63million. The key focus was to sell all the non-core assets, settle the outstanding liabilities and transform into a listed venture capital vehicle. The Knife Capital transaction in March 2014 was a very key aspect of the execution of the strategy. Two other key aspects of the strategy were the sale of Elite and the settling of the long outstanding SARS liability. The failure of the Elite transaction in 2014 together with the discovery by the new management of an under provided debtors book, had a very negative effect on net asset value and the ability to execute the strategy.
Drastic actions were taken in Elite to enable it to repay certain liabilities and to position it for an exit. A transaction with Dzothe Investments (“Dzothe transaction “) to purchase Elite, PTF1 and PTF2 for R20million was done to revitalize the strategy. The Dzothe transaction was cancelled after Dzothe failed to remedy a breach and a decision was made to abandon the previous strategy.
Knife Capital was restructured and sold in September 2017. We sold the remaining 50% shareholding of Grindstone in January 2018. We also concluded a settlement agreement with SARS in December 2017.
All non-core assets and businesses have been sold, restructured or closed. Settlement agreements have been concluded and implemented with creditors.
Where are we now:
Afdawn is finally in a position to move forward. The Group has two operational entities ie Elite Group, the lending platform, and YueDiligence. The latter can help entrepreneurs identify growth gaps in their business which should be remedied to ensure a stable platform from which to launch growth.
Both these assets have huge potential but need funding.
Our key objective for the near term
• To repay most of the SARS liability as per settlement agreement without raising capital from shareholders
• To recapitalise the Group to provide funding for Elite to leverage its lending platform
• To roll out the YueDiligence platform to entrepreneurs, funders, consultants and other stakeholders to ensure a growing and sustainable SME market.