Brainworks seeks debt-equity swap deal approval



JOHANNESBURG Stock Exchange (JSE)-listed firm Brainworks is seeking to clear a US$5 million debt in exchange for ordinary shares.

In a statement, the company said the settlement of the accrued loans through the issue of shares will reduce the company’s debt levels and lower its financial risk profile, allowing the company to save on interest costs.

“Shareholders are advised that the company entered into debt settlement agreements on September 2, 2019, with certain related parties in terms of which it will settle loans advanced to Brainworks during 2017 and 2018 (the 2017 and 2018 loans) through the issue of 7 985 581 Brainworks ordinary shares.” Brainworks said.

“Shareholder are further advised that Brainworks concluded loan agreements in March 2019 with certain related parties (2019 loans) which provided the related parties and or Brainworks with an option to convert the 2019 loans into shares any time prior to November 30, 2019, at a price of R6,50 per share and at a USD/ZAR exchange rate to be determined on the date of receipt of the requisite shareholder approval for the issue of shares.”

Brainworks said the 2017 and 2018 loans would have an aggregate amount of US$3 444 871 outstanding and the 2019 loans amount to US$1 561 771 outstanding on the anticipated settlement date of November 1, 2019.

The issue of shares is subject to approval by the majority of shareholders. Up to 12 500 shares will be issued for the purpose, the company added.

Brainworks is the controlling shareholder in Zimbabwe Stock Exchange-listed firms Dawn Properties and African Sun Limited.

It also wholly owns FML Oil Company of Zimbabwe, a provider of integrated bulk fuel haulage solutions within Zimbabwe and the region.