Wrap Text
Terms announcement for related party transactions and withdrawal of cautionary announcement
ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
("the Company" or "Ecsponent")
TERMS ANNOUNCEMENT REGARDING A RELATED PARTY ACQUISITION AND DISPOSALS
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
The Company and its subsidiaries (“the Group”) is predominantly a financial services group which
creates wealth by investing in companies that offer a range of niche financial services in South Africa
and Africa. These services range from jurisdiction of operation and include enterprise development
funding and lending to small and medium enterprises (“SMEs”).
While the Group focuses primarily on the financial services industry, it diversifies its investments across
multiple industries and geographies by identifying private equity transactions that will contribute to the
Group’s profitability and growth. Currently, the Group’s private equity investments are diversified across
industries such as biotechnology, media intelligence, and mining and engineering supplies.
The business strategy has produced triple digit growth in significant indicators each year for the past
six years.
In order to further capitalise on these successes, the board of Ecsponent (“the Board”) has undertaken
a process of rationalising the Group’s operations and investments. The Board is pleased to announce
a series of financial transactions designed to streamline operations and re-align the Group for increased
strategic growth. These transactions ensure uncompromising focus on its core business of SME and
enterprise finance and private equity, with the Group disposing of all other assets not aligned to these
activities.
In addition to aligning the focus of the Group’s divisions to its core business, the proposed transactions
are expected to result in:
- increased focus on profit generating assets;
- improved cash deployment in core assets;
- improved performance ratios;
- lowered overhead costs; and
- reduced infrastructure requirements.
The disposals of non-core operations as a result of the above rationalisation, and a consequential loan
consolidation and related party acquisition is discussed in more detail below.
2. The Disposals
2.1. Overview
With reference to the above-mentioned rationalisation, and further to the cautionary announcements
released on 10 October 2016 and 21 November 2016, the Board is pleased to announce that the Group
has agreed terms for:
1. the disposal of the Company’s 51% interest in, and loan accounts against, Clade Investment
Management Proprietary Limited (“Clade”) to Ecsponent Capital (RF) Limited (“Capital”) for a
total consideration of R15 500 000 (“the Clade Disposal”);
2. the disposal of the Company’s 70% interest in, and loan accounts against Ecsponent Holdings
Proprietary Limited, incorporated in Botswana (“ECS Holdings”), to Ecsponent Projects
Proprietary Limited (“Projects”), for a consideration of P34 000 000 (“the ECS Holdings
Disposal”);
3. the disposal of a portion of the business of Ecsponent Development Fund Proprietary Limited
(“EDF”), as a going concern, to Ecsponent Investment Holdings Proprietary Limited (“EIH”), for
a consideration of R120 150 000 (“the EDF Disposal”);
4. the issue of 1 500 000 new shares by Ecsponent Financial Services Limited (“EFS Zambia”),
equating to 75% of the total issued share capital in EFS Zambia after the issue, to GetBucks
Limited (“GetBucks MU”), for a subscription price equal to ZMW 7 500 000, payable in cash
(“the EFS Zambia Subscription”), resulting in a dilution of Ecsponent’s interest from 100% to
25%; and
5. the disposal of the Company’s 50% interest in Sure Choice Proprietary Limited (“Sure Choice”)
to GetBucks Limited (“GetBucks BW”), for a consideration of P10 000 000 (“the Sure Choice
Disposal”).
(collectively, “the Disposals”).
2.2. Rationale for the Disposals
2.2.1. The EDF Disposal
Enterprise finance is an exciting opportunity for Ecsponent and the growth of the business has been
very positive. EDF’s client base includes retail clients, local government/municipal business as well as
large corporate businesses. In order to penetrate this market effectively the Board has decided to focus
on the corporate sector. As a result, EDF will dispose of its primarily municipal clients to EIH and will
retain the corporate enterprise finance business.
2.2.2. The ECS Holdings Disposal and the Clade Disposal
The operations of both ECS Holdings and Clade require a more diversified business portfolio, requiring
extended management infrastructure and further capitalisation. The Board is of the opinion that a more
focused operational structure and the deployment of funds into core assets would be more beneficial
to the Group’s profitability. The decision to dispose of these non-core assets is therefore beneficial to
the Group.
2.2.3. The EFS Zambia Subscription and the Sure Choice Disposal
As a consequence of the decision to exit retail credit provision in the South African market, the Board
has entered into agreements with GetBucks in Botswana to dispose of Ecsponent’s 50% share in Sure
Choice, a provider of retail credit. In addition, Ecsponent has reached agreement to dilute its interest in
EFS Zambia from 100% to 25% through an issue of shares by EFS Zambia to GetBucks MU. Ecsponent
will remain a funder to these operations through the provision of SME credit. Once again, this reduces
the cost base of credit provision for Ecsponent and improves the securitisation of the credit facilities.
The retail operations are viewed as non-core to Ecsponent’s strategy.
3. The Loan Consolidation
In addition to the above Disposals, the various parties to the Disposals, and/or their group companies,
have agreed to undertake a process to consolidate various loan accounts due to and from the various
parties and/or their group companies, resulting in one single loan account (“the Loan Account”) between
Ecsponent Treasury Services Limited (“ECS Treasury”) and Capital (“the Loan Consolidation”).
The balance remaining on the Loan Account will attract interest at a rate of 28% per annum, nominal
annual compound monthly (“nacm”), and be repayable by Capital over 48 months.
4. The MyBucks Acquisition
4.1. Overview
The Board has proposed the acquisition by Ecsponent Limited, incorporated in Botswana (“ECS
Botswana”), of 10.002% of the issued share capital of MyBucks SA (“MyBucks”) from Projects for a
purchase consideration of R262 570 000 (“the MyBucks Acquisition”) as part settlement on the Loan
Account reducing the balance on the Loan Account following the Disposals and the Loan Consolidation.
4.2. Rationale for the MyBucks Acquisition
MyBucks is a financial technology company listed on the Frankfurt Stock Exchange (market
capitalisation of €192 million as at the date of this announcement) providing products and services to
customers in Africa and Europe.
The acquisition of 10.002% of the issued share capital in MyBucks provides Ecsponent with a non-
controlling equity stake in a dynamic and fast growing financial technology business which is at the
cutting edge of its industry. This acquisition fits Ecsponent’s target profile as MyBucks has significant
intellectual property and provides high profit margins. At the current share price of MyBucks, the
10.002% interest has a market value of R292.5 million.
5. Solvency and liquidity of the Group
The Disposals and the MyBucks Acquisition will result in the Group reducing its interest-bearing loan
assets, which are cash generative on a monthly basis, and increasing its investment base of assets
focused on capital growth. The Board has reviewed the cash flow and solvency position of the Group
and is comfortable that the Group remains liquid and solvent following the Disposals and the MyBucks
Acquisition.
6. Related parties
Capital is the former holding company of Ecsponent and remains a material shareholder in Ecsponent.
Accordingly, Capital and its associates are related parties of the Company.
7. Terms and conditions of the Disposals and the MyBucks Acquisition
7.1. The Clade Disposal
The Company and Capital have agreed that the Company will dispose of its 51% interest in, and
loan accounts against Clade to Capital for a total consideration of R15 500 000.
a) Description of the business of Clade
Clade was founded in 2004 as an asset manager operating out of South Africa. Clade offers a
range of alternative, traditional long-only and hybrid investment solutions for investors in South
Africa and Africa.
Clade focuses on providing high-quality, low-cost solutions, with high service levels to
knowledgeable professional investors in both South Africa and internationally. It will also provide
retail versions of its more popular products. Clade, which has category 2 and 2A investment
licences with the Financial Services Board, is the holder of all the issued share capital of Exchange
Trade Fund Limited.
The Company originally acquired its interest in Clade on 30 June 2016 for a purchase consideration
of R11 000 000. The Company’s intention was to strengthen its financial services offering and gain
alternative means of raising funding for the Group. However, as the Group intends to focus on its
core strategy of providing niche financial services, the Board believes that asset management is
not aligned with its activities of SME/enterprise financing and private equity.
b) Sale consideration
The sale consideration of R15 500 000 will be set-off against the Loan Account pursuant to the
Loan Consolidation. The proposed transaction would yield a profit before taxation for the Group of
R4.5 million based on the 30 June 2016 results (calculated as the sale consideration less the
carrying value of the investment on 30 June 2016). The Group will continue to fund Clade until the
effective date, which may have an impact on the profit to be realised by the Group.
The parties have agreed a budget for the operating funding of Clade in the normal course of
business between the signature date of the Clade Disposal agreement and the expected effective
date. Any deviation from the budget will result in an adjustment to the sale consideration, provided
that the deviations are agreed by the parties in advance.
c) Financial information pertaining to Clade
As at 30 June 2016, being the Company’s last reporting date, Clade had a total net asset value of
R3 421 113.
For the six-month period ended 30 June 2016, Clade had a total net loss after tax of R441 330.
d) Suspensive conditions
The Clade Disposal agreement is subject to the fulfilment of the following suspensive conditions
on or before the end of the Company’s financial year, being 31 March 2017:
? providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the Clade Disposal are fair insofar as the shareholders
of the Company, excluding Capital and its associates, are concerned;
? approval by shareholders of the Company in general meeting, excluding Capital and its
associates;
? waiver, or exemption, of the provisions of section 123 of the Companies Act as far as it relates
to the requirement for Projects to make a mandatory offer to minority shareholders; and
? approval by the JSE and the Takeover Regulation Panel, to the extent necessary.
e) Effective Date
The effective date will be 11:59 PM on the last day of the month in which the conditions precedent
to the Clade Disposal have been fulfilled, or waived as the case may be.
f) Other significant terms
Further terms, conditions and warranties that are usual for a transaction of this nature are
contained in the Clade Disposal agreement.
g) Categorisation in terms of the JSE Listings Requirements
This transaction is classified as a related party Category 1 transaction in terms of the JSE Listings
Requirements and accordingly will require approval from shareholders, excluding Capital and its
associates. Shareholders are referred to paragraph 8 below.
7.2. ECS Holdings Disposal
In terms of the ECS Holdings Disposal agreement, the Company will dispose of its 70% interest in, and
loan accounts against ECS Holdings to Projects for a sale consideration of P34 000 000.
a) Description of the business of ECS Holdings
ECS Holdings provides financial services including investment products and enterprise finance to
SME’s in Botswana. ECS Holdings also owns 70% of the issued share capital of Ecsponent Asset
Management Limited (incorporated in Botswana), which has a Collective Investment Undertaking
license and is incorporated and licensed as an Investment Company with Variable Capital (ICVC),
regulated by the Non-Banking Financial Institutions Regulatory Authority (NBFIRA).
b) Sale consideration
The sale consideration of P34 000 000 (equal to R42 938 600 at an exchange rate at the date of
this announcement of P1:ZAR1.26) will be set-off against the Loan Account pursuant to the Loan
Consolidation. The ECS Holdings Disposal would yield a profit before taxation for the Group of
P25.3 million based on the 30 June 2016 results (equal to R31.95 million at the abovementioned
exchange rate). The Group will continue to fund ECS Holdings until the effective date, which may
have an impact on profit to be realised by the Group.
The parties have agreed a budget for the operational funding of ECS Holdings and Ecsponent
Asset Management Limited in the normal course of business between the signature date of the
ECS Holdings Disposal agreement and the expected effective date. Any deviation from the budget
will result in an adjustment to the sale consideration, provided the deviation is agreed by the parties
in advance.
c) Financial information pertaining to ECS Holdings
As at 30 June 2016, being the Company’s last reporting date, ECS Holdings had a total negative
net asset value of P2 104 (equal to R2 657 at the abovementioned exchange rate). Ecsponent
Asset Management Limited had a total negative net asset value of P1 106 406 (equal to
R1 397 280 at the abovementioned exchange rate).
For the six-month period ended 30 June 2016 ECS Holdings had a total net loss after tax of P3 104
(equal to R3 920 at the abovementioned exchange rate), and Ecsponent Asset Management
Limited had a total net loss after tax amounting to P1 106 506 (equal to R1 397 280 at the
abovementioned exchange rate).
d) Suspensive conditions
The ECS Holdings Disposal is subject to the fulfilment, or waiver if applicable, of the following
suspensive conditions on or before the financial year end of the Company, being 31 March 2017:
- providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the ECS Holdings Disposal are fair insofar as the
shareholders of Ecsponent are concerned, excluding Capital and its associates;
- approval by the shareholders of the Company in general meeting, excluding Projects and its
associates;
- approval by the South African Reserve Bank, to the extent necessary; and
- approval by the JSE, to the extent necessary.
e) Effective Date
The effective date will be 11:59 PM on the last day of the month in which the conditions precedent
to the ECS Holdings Disposal agreement have been fulfilled, or waived as the case may be.
f) Other significant terms
Projects has undertaken to procure an amendment to its name, as well as the names of ECS
Holdings and Ecsponent Asset Management Limited to other appropriate names that are not in
conflict, or reasonably similar to, the name of the entities within the Ecsponent Group of companies.
Further terms, conditions and warranties that are usual for a transaction of this nature are
contained in the ECS Holdings Disposal agreement.
g) Categorisation in terms of the JSE Listings Requirements
This transaction is classified as a Category 1 related party transaction in terms of the JSE Listings
Requirements and will accordingly require approval from shareholders, excluding Projects and its
associates. Shareholders are referred to paragraph 8 below.
7.3. The EDF Disposal
In terms of the EDF Disposal agreement, EIH (a subsidiary of Capital) will acquire a portion of the
business of EDF, as a going concern, for a sale consideration of R120 150 000. EDF is a wholly owned
subsidiary of the Company following the acquisition by the Company of the remaining 26% of EDF
during the 2016 financial period. EDF will continue to provide funding to corporate clients.
a) Description of the business of EDF
EDF operates as a financial services entity. The core business of EDF is the provision of financing
to SMEs.
EDF currently provides financing to entities and individuals requiring short term bridging finance in
order to fund the supply of products or services to both municipal entities and private sector
corporate entities.
EIH is an innovative business-to-business lender that focuses on high impact transactions. It
focuses on the SME market where the ultimate payment risk is from state-owned enterprises or
credible national, provincial or local government departments.
The business conducted by EDF was initially established by EIH in October 2014, after which EDF
acquired the business of EIH on 30 June 2016 for a purchase consideration of R118 957 242. The
business has demonstrated significant growth and two specific target markets have developed,
namely the municipal/local government market and the corporate market. These two markets have
distinctly differing requirements specifically in respect of securitisation, margins, infrastructure, etc.
The Board has resolved to focus on the corporate market and to dispose of the other sectors to
EIH.
b) Consideration
A total amount of R120 150 000 will be payable by EIH to EDF pursuant to the EDF Disposal,
provided the value of the loan book disposed of is equal to R45 000 000 on the effective date. For
the period as from the signature date up and until the effective date, EDF shall be entitled to
conduct the business for its sole benefit and the value of the loan book shall be finally determined
and resolved two business days prior to the effective date. Should the value of the loan book be
different to the agreed R45 000 000, it will necessitate a corresponding pro-rata adjustment of the
sale consideration.
The sale consideration for the EDF Disposal will be set-off against the Loan Account on the
effective date pursuant to the Loan Consolidation. The proposed transaction would yield a profit
before taxation for the Company of R74.4 million based on the 30 June 2016 results (calculated
as the sale consideration less the net carrying value of the business as at 30 June 2016). EDF will
continue to conduct the business as described through managing collections and funding new
transactions until the effective date, which may have an impact on the profit to be realised by the
Company.
c) Financial information pertaining to EDF
As at 30 June 2016, being the Company’s last reporting date, EDF had a total negative net asset
value of R73 889 650, of which R70.7 million relates to the portion of the business that is subject
to the EDF Disposal, and R3.1 million relates to the business being retained.
For the six-month period ended 30 June 2016, the business being conducted by EDF yielded a
profit after tax of approximately R1.5 million, of which R1.2 million relates to the portion of the
business that is subject to the EDF Disposal, and R277k relates to the business being retained. It
should be noted that the financial performance of the business of EDF is not included in the Group
results for the interim period ended 30 June 2016 as the effective date of acquisition was 30 June
2016.
d) Suspensive conditions
The EDF Disposal is subject to the fulfilment, or waiver if applicable, of the following suspensive
conditions on or before the financial year end of the Company, being 31 March 2017:
- approval in the form of a special resolution by the shareholders of EDF in general meeting
(in accordance with section 112 of the Companies Act);
- providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the EDF Disposal are fair insofar as the
shareholders of the Company (excluding Capital and its associates) are concerned;
- approval by the shareholders of EDF (excluding Capital and its associates) in general
meeting;
- approval by the JSE and Takeover Regulation Panel to the extent necessary; and
- approval by the Competition Commission to the extent necessary.
e) Effective Date
The effective date of the EDF Disposal will be 11:59 PM on the last day of the month in which the
conditions precedent of the EDF Disposal agreement, have been fulfilled, or waived as the case
may be.
f) Other significant terms
The ownership of all intellectual property and marks (“Usage Assets”) will remain with EDF. EDF
will grant EIH the right to use the Usage Assets indefinitely from the effective date of the EDF
Disposal.
Further terms, conditions and warranties that are usual for a transaction of this nature are
contained in the EDF Disposal agreement.
g) Categorisation in terms of the JSE Listings Requirements
The EDF Disposal is classified as a reverse take-over and related party transaction in terms of the
JSE Listings Requirements. Accordingly, the EDF Disposal will require approval from shareholders
(other than Capital and its associates). Shareholders are referred to paragraph 8 below.
7.4. EFS Zambia Subscription
In terms of the EFS Zambia Subscription agreement, EFS Zambia will issue 1 500 000 ordinary
shares to GetBucks MU, for a subscription price of ZMW 7 500 000.
Following the EFS Zambia Subscription, the shares in EFS Zambia will be held as follows:
Shareholder Number of shares %shareholding
Ecsponent 499 999 24.9995%
Getbucks Zambia 1 500 000 75%
TP Gregory 1 0.00005%
Total 2 000 000 100%
a) Description of the business of EFS Zambia
EFS Zambia was awarded a deposit-taking micro finance banking licence and its investment
products are deployed under the authority of the Bank of Zambia. These include a range of options
from entry-level savings based products on payroll deduction, to high-end retail investments.
b) Subscription price
The subscription price of ZMW 7 500 000 (equal to R10 656 750 at an exchange rate at the date
of this announcement of ZMW1:ZAR1.42) will be paid in cash on the effective date of the EFS
Zambia Subscription agreement.
c) Financial information pertaining to EFS Zambia
As at 30 June 2016, being the Company’s last reporting date, EFS Zambia had a total net asset
value of ZMW 450 506 (R640 124 at the abovementioned exchange rate).
For the six-month period ended 30 June 2016 EFS Zambia had a total net loss after tax of
ZMW 1 238 462 (R1 759 731 at the abovementioned exchange rate).
d) Suspensive conditions
The EFS Zambia Subscription is subject to the fulfilment, or waiver if applicable, of the following
suspensive conditions on or before the financial year end of the Company, being 31 March 2017:
- increase of EFS Zambia’s authorised ordinary share capital to no less than 2 000 000
authorised ordinary shares of ZMW1.00 each;
- providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the EFS Zambia Subscription are fair insofar as the
shareholders of Ecsponent are concerned, excluding GetBucks MU and its associates;
- approval by the shareholders of the Company (excluding GetBucks MU and its associates) in
general meeting;
- approval by the South African Reserve Bank, to the extent necessary; and
- approval by the JSE and Bank of Zambia, to the extent necessary.
e) Effective Date
The effective date will be 11:59 PM on the last day of the month in which the conditions precedent
to the EFS Zambia Subscription agreement have been fulfilled, or waived as the case may be.
f) Other significant terms
Further terms, conditions and warranties that are usual for a transaction of this nature are
contained in the EFS Zambia Subscription agreement.
g) Categorisation in terms of the JSE Listings Requirements
This transaction is classified as a Category 1 related party transaction in terms of the JSE Listings
Requirements and will accordingly require approval from shareholders, excluding GetBucks MU
and its associates. Shareholders are referred to paragraph 8 below in this regard.
7.5. Sure Choice Disposal
In terms of the Sure Choice Disposal agreement, ECS Botswana will dispose of its 50% interest in
Sure Choice to GetBucks BW, for a sale consideration of P10 000 000.
a) Description of the business of Sure Choice
Sure Choice provides retail credit to government employees in Botswana and is a registered micro
financier with and regulated by NBFIRA.
b) Consideration
The sale consideration of P10 000 000 (equal to R12 629 000 at an exchange rate at the date of
this announcement of P1:ZAR1.2629) shall be payable in cash in 12 equal monthly instalments on
or before the last day of each successive calendar month, with the first instalment falling due on
the last day of the calendar month following the effective date. The outstanding balance of the sale
consideration shall accrue interest at a rate of 12.5% per annum, nacm, as from the effective date
and shall be payable monthly together with each consideration instalment. The proposed
transaction would yield a profit before taxation for the Company of P6.6 million (equal to
R8 646 000 at the abovementioned exchange rate) based on the 30 June 2016 results (calculated
as the sale consideration less the carrying value of the investment as at 30 June 2016), after taking
into account the loan capitalisation requirement, as detailed in paragraph (f) below.
c) Financial information pertaining to Sure Choice
As at 30 June 2016, being the Company’s last reporting date, Sure Choice had a total negative
net asset value of P3 409 839 (R4 306 286 at the abovementioned exchange rate).
For the six-month period ended 30 June 2016 Sure Choice had a total net loss after tax of
P418 835 (R528 947 at the abovementioned exchange rate).
d) Conditions precedent
The Sure Choice Disposal is subject to the fulfilment, or waiver if applicable, of the following
suspensive conditions on or before the financial year end of ECS Botswana, being March 2017:
- ECS Botswana obtaining a written waiver of the pre-emptive rights by the existing and
remaining shareholders of Sure Choice as contained in clause 13 of the shareholders’
agreement in respect of Sure Choice;
- providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the Sure Choice Disposal are fair insofar as the
shareholders of Ecsponent are concerned, excluding GetBucks BW and its associates;
- approval by the shareholders of the Company in general meeting, excluding GetBucks BW
and its associates;
- approval by the JSE, to the extent necessary; and
- approval by the board of directors of GetBucks BW.
e) Effective Date
The effective date will be 11:59 PM on the last day of the month in which the conditions precedent
to the Sure Choice Disposal have been fulfilled, or waived as the case may be.
f) Other significant terms
ECS Botswana undertakes, on the effective date, to capitalise such required amount of its existing
shareholder loan facility to Sure Choice in order to ensure a positive net asset value position of
Sure Choice. The balance of the shareholder loan will be repayable in 36 equal monthly
instalments, with any outstanding balance accruing interest at a rate of 28% per annum, nacm.
Further terms, conditions and warranties that are usual for a transaction of this nature are
contained in the Sure Choice Disposal agreement.
g) Categorisation in terms of the JSE Listings Requirements
This transaction is classified as a Category 1 related party transaction in terms of the JSE Listings
Requirements and will accordingly require approval from shareholders, excluding GetBucks BW
and its associates. Shareholders are referred to paragraph 8 below in this regard.
7.6. The MyBucks Acquisition
ECS Botswana, a wholly owned subsidiary of the Company, will acquire 10.002% of the issued share
capital of MyBucks from Projects, a wholly owned subsidiary of Capital, for a consideration of
R262 570 000. The consideration will be off-set against the Loan Account in order to reduce the Loan
Account.
a) Description of the business of MyBucks
MyBucks is a listed financial technology company providing financial products and services to
customers in Africa and Europe. MyBucks listed on the Frankfurt Stock Exchange in June 2016,
under share code MBC:GR and ISIN LU1404975507, and has a market capitalisation of €192
million as at the date of this announcement.
Financial products supplied by MyBucks include banking, lending (short- and long term),
insurance, credit management and budgeting tools. MyBucks operates under three different
brands, namely GetBucks, GetSure and GetBanked.
MyBucks is represented in 14 countries in total, including South Africa, Botswana, Kenya, Malawi,
Namibia, Poland, Spain, Swaziland, Uganda, Zambia and Zimbabwe.
The MyBucks strategy consists of providing higher volume credit and financial services to
customers with positive credit ratings, at reduced rates and on attractive terms.
b) Consideration
A total consideration equal to R262 570 000 will be payable by ECS Botswana to Projects, which
will be set-off against the Loan Account on the effective date pursuant to the Loan Consolidation.
c) Financial information pertaining to MyBucks
As at 31 December 2015, being the last reporting date for MyBucks, MyBucks had a total net asset
value of €9 879 714 (equal to R145 923 376 at the exchange rate at the date of this announcement
of €1:ZAR14.77).
For the 6 months ended 31 December 2015, MyBucks had a net profit after tax of €2 453 867
(equal to R36 243 616 at the exchange rate as detailed above).
d) Suspensive conditions
The MyBucks Acquisition is subject to the fulfilment, or waiver if applicable, of the following
suspensive conditions on or before the end of the Company’s financial year end, being 31 March
2017:
- Ecsponent providing the JSE with written confirmation from an independent professional expert
acceptable to the JSE that the terms of the MyBucks Acquisition are fair insofar as the
shareholders of the Company are concerned, excluding Projects and its associates;
- approval by the shareholders of the Company of the MyBucks Acquisition in a general meeting,
excluding Projects and its associates;
- approval by Hauck & Aufhäuser Privatbankiers KGaA in respect of an agreement between
Projects and Hauck & Aufhäuser Privatbankiers KGaA (“the Lock-Up Agreement”); and
- approval by the JSE and the South African Reserve Bank, to the extent necessary.
e) Effective Date
The effective date will be 11:59 PM on the last day of the month in which the suspensive conditions
to the MyBucks Acquisition have been fulfilled, or waived as the case may be.
f) Other significant terms
In terms of the Lock-Up Agreement, Projects may not dispose of, or enter into an agreement to
dispose of, the shares in MyBucks without the prior written consent of Hauck & Aufhäuser
Privatbankiers KGaA, up to 30 June 2017. Following the MyBucks Acquisition, ECS Botswana will
also become party to the Lock-Up Agreement and therefore ECS Botswana will be subject to the
same restrictions on the transfer or disposal of the shares in MyBucks.
Terms, warranties and representations that are usual for a transaction of this nature have been
provided by the parties to the MyBucks Acquisition agreement.
g) Categorisation in terms of the JSE Listings Requirements and continuation of the Company’s listing
The MyBucks Acquisition constitutes a reverse take-over and related party transaction in terms of
the JSE Listings Requirements and will accordingly require approval from shareholders, excluding
Projects and its associates. Shareholders are referred to paragraph 8 below in this regard.
8. Circular to shareholders
A circular setting out further details of the Disposals and the MyBucks Acquisition, including the requisite
fairness opinions and containing a notice of general meeting for the purpose of securing shareholders’
approval for the Disposals and the MyBucks Acquisition, will be distributed to shareholders of the
Company in due course.
The Disposals and the MyBucks Acquisition, in aggregate, constitute a reverse take-over in terms of
the JSE Listings Requirements and will accordingly require confirmation from the JSE that it is satisfied
that the Company continues to qualify for listing on the Main Board of the JSE as if it is a new listing.
Shareholders are advised that the JSE has provided a preliminary ruling confirming that Ecsponent will
continue to qualify for a Main Board listing on the JSE based on the information provided to the JSE.
Shareholders are however made aware of the uncertainty of whether or not the JSE will allow the listing
to continue following the Disposals and the MyBucks Acquisition on submission and approval of the
circular to be distributed to shareholders in due course.
9. Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement released on 10 October 2016 and are
advised that the cautionary announcement is hereby withdrawn.
Pretoria
20 December 2016
Sponsor and Corporate Advisor
Questco (Pty) Ltd
Date: 20/12/2016 10:52:00 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
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