METTLE INVESTMENTS LIMITED - Announcement regarding an Acquisition by a Subsidiary of the Company

Announcement regarding an Acquisition by a Subsidiary of the Company

METTLE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2008/002061/06)
JSE share code: MLE
ISIN: ZAE000257622
("Mettle” or "the Company")

ANNOUNCEMENT REGARDING AN ACQUISITION BY A SUBSIDIARY OF THE COMPANY

 1. Introduction

 Shareholders are hereby advised that Reward Investments (No. 2) Limited (“Reward”), a subsidiary of
 the Company, has concluded an agreement with Truly Alternative Limited (“TAL”) in terms of which
 Reward shall acquire from TAL 100 Reward Finance Group Limited (“RFG”) “B” shares, equating to an
 effective 10% of the issued share capital of RFG, for an aggregate cash consideration of GBP 2 000 000
 (“the Transaction”). After the implementation of the Transaction, Reward will have an effective 82.5%
 interest in the issued share capital of RFG.

 2. Overview of Reward and TAL

 RFG provides asset-secured short- and medium-term loans and invoice discounting to the United
 Kingdom’s small to medium sized enterprise (“SME”) market. RFG’s strategy is to target SME’s that are
 not adequately serviced by traditional banks.

 TAL is the vehicle through which two of the executive directors of RFG, Thomas Flannery and David
 Jones (“the Executive Directors”), hold their interest in RFG.

 3. Rationale for the Transaction

 The transaction is part of an executive succession plan that commenced in 2017. In terms of this plan
 the Executive Directors would facilitate the recruitment and development of a new senior management
 team that will lead RFG during the next phase of its development. Once this had been achieved, their
 shares in RFG would be acquired and they would allow the new management team to take charge of
 RFG.

 The Executive Directors have ensured that a new management team is now in place. With effect from
 the purchase by Reward of TAL’s shares in RFG the Executive Directors have resigned as the joint
 chief executive officers of RFG. Nick Smith, who has 27 years’ experience in the United Kingdom’s
 SME finance sector and has been with the RFG since 2016, has been appointed as the chief executive
 officer of RFG with effect from 1 April. Both David Jones and Thomas Flannery will remain involved as
 founding directors. David Jones will assist in the continued development of the RFG business, while
 Thomas Flannery has been appointed as executive chairman of Reward.

 Accordingly, given the Executive Directors’ new roles, the successful implementation of RFG’s
 succession plan and the good value that the Transaction represents for the Company, the board of
 directors of Mettle is of the view that it is now the appropriate time to conclude the Transaction.

 4. Purchase Consideration

 The aggregate purchase consideration of GBP 2 000 000 shall be settled in cash.

 5. Categorisation and Related Party Transaction

 TAL is an associate of Thomas Flannery, a director of Mettle. Accordingly, in terms of the Listings
 Requirements of the JSE Limited, the Transaction is classified as a Category 2, small related party
 transaction

 The independent directors of Mettle are in the process of appointing an independent professional expert
 (“the IPE”) to opine of the fairness of the Transaction. The opinion of the IPE will be announced on
 SENS as soon as it has been finalised.

 6. Conditions precedent and effective date

 No conditions precedent to the Transaction remain outstanding and the Transaction became effective
 on 2 April 2020. To the extent that the IPE opines that the terms of the Transaction are not fair, the
 Transaction will be referred to Mettle Shareholders in general meeting for approval.

 7. Financial Information

 The net asset value of RFG as at 31 August 2019, the date of Mettle’s interim results for the six months
 then ended, was GBP 5 459 000. RFG generated a profit after tax for the same period of
 GBP 1 719 000.

 The above figures are unaudited and have not been reviewed by Mettle’s auditors.


Cape Town
08 April 2020

Designated Advisor
Questco Corporate Advisory (Pty) Ltd

Date: 08-04-2020 09:28:00
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