Micro-finance company suspended from the JSE

A micro-finance company, African Dawn Capital, has been suspended from the JSE for failing to publish its financial results within the required deadline.

In a SENS announcement released on Thursday, 18 July, the JSE informed investors that African Dawn Capital has failed to comply with the JSE Listings Requirements.

This was because it did not publish its financial statements for the year ending 29 February 2024 within the prescribed period.

“Accordingly, the listing of the company’s securities has been suspended with immediate effect,” the bourse said.

This comes after a SENS announcement on 18 June 2024, in which the JSE said African Dawn Capital and several other companies had failed to submit their financial statements in time.

It said these companies face suspension from the bourse if they do not publish their results before or on 30 June 2024.

On 1 July 2024, the JSE confirmed via SENS that African Dawn Capital had, again, failed to publish its financial results within the given deadline.

This saw the company be suspended from the JSE effective immediately on 18 July 2024. African Dawn Capital has not made any statements on the late publication of its financial results.

The company was founded in 1998 as a micro-finance business. Following its listing on 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”, according to its website. 

The company had an asset base of R96 million, which comprised mostly distressed assets and liabilities of R63 million. 

“The key focus was to sell all the non-core assets, settle the outstanding liabilities and transform into a listed venture capital vehicle,” the company explained. 

“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.” 

African Dawn Capital said the failure of the “Elite transaction” in 2014 and the new management’s discovery 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 to purchase Elite, PTF1 and PTF2 for R2 0million was done to revitalize the strategy,” it said. 

“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.”

The company has two operational entities: Elite Group, the lending platform, and YueDiligence.

The latter entity helps entrepreneurs identify growth gaps in their business that should be remedied to ensure a stable platform from which to launch growth.

“Both these assets have huge potential but need funding,” the company said. It added that it was “finally in a position to move forward”. 

Daily Investor reached out to African Dawn Capital for comment but did not receive a response by the time of publication.