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TRADEHOLD LIMITED - Voluntary joint announcement pertaining to the restructure of Tradehold Limiteds non-property business

Release Date: 23/08/2017 08:00
Code(s): TDH VIN     PDF:  
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Voluntary joint announcement pertaining to the restructure of Tradehold Limited’s non-property business

Tradehold Limited                                                    VestIN Holdings Limited
(Registration number: 1970/009054/06)                                (Registration number: 47305)
Incorporated in the Republic of South Africa                         Incorporated in Bermuda
JSE Share code: TDH       ISIN: ZAE000152658                         ‘A’ Ordinary Share Code: VIN
("Tradehold" or "the Group")                                         ISIN: BMG934031060
                                                                     (“VestIN”)


VOLUNTARY JOINT ANNOUNCEMENT PERTAINING TO THE RESTRUCTURE OF TRADEHOLD
LIMITED’S NON-PROPERTY BUSINESSES


1. Introduction

   Shareholders are advised that Tradehold has taken the first step in what will be a series of transactions
   which will give effect to the reorganisation of the Group through the separation of its non-property
   interests into a separately listed investment holding vehicle (the “Restructure”).

   The Restructure will result in Tradehold streamlining its existing business between property and non-
   property assets, with the property assets remaining listed on the securities exchange operated by JSE
   Limited (“JSE”) as Tradehold and the non-property assets being separately housed within VestIN (a
   dormant company which has no subsidiaries), which is listed on the Bermudian Stock Exchange
   (“BSX”) and secondary listed on the Alternative Exchange of the JSE (“AltX”).

   Tradehold shareholders will retain their shareholding in the Group and as a result of the Restructure
   will also receive a pro rata shareholding in VestIN in proportion to their Tradehold shareholding.

2. Details of the Restructure

   2.1. Acquisition of VestIN

        On 21 August 2017, Tradehold and Osiris Property Services Limited (“Osiris”), a British Virgin
        Islands resident company with no South African shareholders, and which is currently the sole
        shareholder of VestIN, entered into an agreement (“the Agreement”) in terms of which Tradehold
        agreed to acquire all the issued shares in VestIN, being Class A common shares, (“the VestIN
        Shares”) held by Osiris for USD500 000 (the “Acquisition”). Following the Acquisition, VestIN will
        accordingly become a wholly owned subsidiary of Tradehold.

        The Agreement is subject to the conditions set out in paragraph 5 below.

        VestIN was founded in 2013 and is incorporated in Bermuda. VestIN has a primary listing on the
        BSX with a secondary inward listing on the Alt X. VestIN’s listing on the AltX is currently suspended
        as a result of its dormant status. It is proposed that VestIN’s name will be changed prior to the
        distribution in specie referred to in paragraph 2.2 below.

2.2. Restructure mechanics

   Following the Acquisition, Tradehold will undertake an internal reorganisation pursuant to which
   VestIN will acquire substantially all of Tradehold’s non-property assets, being it’s 100%
   shareholding in Mettle Investments Proprietary Limited (“Mettle Investments”) (a company
   incorporated in South Africa) and a 90% shareholding in Reward Investments (No.2) Limited
   (“Reward Investments”) (a company incorporated in the United Kingdom), (collectively, “the
   Restructure Assets”), resulting in Tradehold holding an indirect shareholding in the Restructure
   Assets via VestIN.

   Subject to the BSX and the JSE approving the issue of revised listing particulars for VestIn (“the
   Revised Listing Particulars”), the JSE agreeing to lift the suspension of the listing of VestIN on the
   AltX, and the completion of the aforementioned internal reorganisation, Tradehold will distribute the
   VestIN Shares to Tradehold shareholders as a distribution in specie (“Distribution in Specie”).

   Tradehold shareholders will retain their shareholding in Tradehold and as a result of the Distribution
   in Specie will receive a pro rata shareholding in VestIN in proportion to their Tradehold shareholding
   immediately prior to the Distribution. Tradehold anticipates that the VestIN Shares at the time of
   the Distribution in Specie should reference the value of the Restructure Assets divested of by
   Tradehold.

2.3. Rationale

   The Restructure achieves the separation of Tradehold’s property interests from its non-property
   interests, namely interests in financial technology, solar power financing solutions, asset
   management, financial services and specialist lending, which are held through the Restructure
   Assets.

   The Restructure is anticipated to:

   2.3.1. create better visibility and understanding of Tradehold’s non-property assets in South Africa
          and the United Kingdom as Tradehold’s asset base has a strong bias (c.92%) towards
          property;

   2.3.2. enable Tradehold shareholders to actively manage their exposure to both the property and
          non-property assets;

   2.3.3. facilitate further investments by VestIN in financial services businesses using VestIN
          shares; and

   2.3.4. secure access to offshore debt and equity markets for what will be VestIN’s largest
          business, Reward Investments based in the United Kingdom, as a result of VestIN’s
          offshore listing.

3. Overview of VestIN post the Restructure

   After the Restructure, and subject to the approvals of the BSX and the JSE referred to above, VestIN
   will be an investment holding company with a listing on the BSX and an inward listing on the AltX,
   holding the Restructure Assets. On implementation of the Restructure, VestIN’s shareholder base will
   be identical to that of Tradehold’s, however its shares will in no way be linked to those of Tradehold’s.

   3.1. Overview of Mettle Investments

        Mettle Investments has seven business units which span a range of financial services, including
        financial technology, solar power financing solutions, asset management, financial services and
        specialist lending. For the 12 months ending 28 February 2017, Mettle Investments and its
        subsidiaries generated a net after tax profit of R15 327 752 (FY16: R16 127 028).

   3.2. Overview of Reward Investments

        Reward Investments has a 70% interest in three operating units based in the United Kingdom,
        namely Reward Capital, which focuses on short-term, asset-backed loans to smaller businesses,
        Reward Invoice Finance, which offers bespoke invoice-discounting facilities to similar-sized
        businesses, and Reward Trade Finance, which provides trade finance facilities to smaller-sized
        businesses. For the 12 months ending 28 February 2017, Reward Investments and its subsidiary
        generated a net after tax profit of GBP2 788 000 (FY16: GBP2 340 000).

4. Overview of Tradehold post the Restructure

   Tradehold post the Restructure will be a property focused investment holding company and will retain
   its listing on the JSE.

5. Conditions precedent to the Restructure

   The Restructure is subject to the fulfilment and/or waiver (as may be applicable) of the following
   conditions precedent, which are customary for a transaction of this nature:

   5.1. Relating to the Acquisition:

       5.1.1.   the receipt of all the necessary approvals that may be required in connection with the
                Acquisition from the Financial Surveillance Department of the South African Reserve Bank;

       5.1.2.   Tradehold completing a due diligence investigation of VestIN to its satisfaction;
       
       5.1.3.   the temporary holding by Tradehold of the VestIN Shares, being unconditionally approved
                by the BSX and the JSE, or conditionally approved on terms and conditions acceptable to
                Tradehold and Osiris; and

       5.1.4.   Tradehold having entered into a written guarantee, warranty and indemnity agreement with
                a third party to its satisfaction, pursuant to which such third party, amongst other things,
                indemnifies Tradehold against any losses that may arise as a result of it acquiring and
                holding the VestIN Shares, including from claims made in respect of any matters warranted
                and/or indemnified by Osiris in terms of the Agreement, on terms and conditions acceptable
                to Tradehold, including in respect of the quantum and duration of such indemnities.

   5.2. Relating to the remainder of the Restructure:

       5.2.1.   The BSX and the JSE approving the Revised Listing Particulars for VestIN and the JSE
                lifting its suspension of VestIN’s listing on the AltX..

6. Purchase consideration

   The purchase consideration payable by Tradehold to Osiris in respect of the Acquisition is an amount
   of USD500 000.

7. Proposed effective date

   The Acquisition has an effective date of 1 July 2017. It is further anticipated that the Restructure,
   including the lifting of VestIN’s suspension on the Altx and the Distribution in Specie, will be effective
   on Wednesday, 22 November 2017.

8. Revised listing particulars

   As part of the Restructure, VestIN will be required to publish BSX and JSE compliant Revised Listings
   Particulars. The Revised Listings Particulars will be distributed to Tradehold shareholders to provide a
   broader understanding of VestIN and the nature of its business post the Restructure.

9. Further announcements and transaction timetable

   It is anticipated that the Revised Listings Particulars will be published on or about
   Wednesday, 15 November 2017. The Revised Listings Particulars will contain further salient
   information regarding the timetables for the Restructure and Distribution in Specie.

10. Categorisation

   The Acquisition is not a categorised transaction in terms of the Listings Requirements of the JSE
   (“Listings Requirements”) in respect of Tradehold and accordingly is disclosed on a voluntary basis by
   Tradehold and VestIN.

   The Distribution in Specie is not a transaction as defined in terms of section 9 of the Listings
   Requirements and accordingly no shareholder approval is required.

   Cape Town

   23 August 2017




   JSE Sponsor to Tradehold
   Bravura Capital Proprietary Limited

   Designated Advisor to VestIN in South Africa
   Questco Corporate Advisory Proprietary Limited

   Sponsor to VestIN in Bermuda
   Global Custody and Clearing Limited (LOM Financial Limited)

   Joint Corporate Advisors
   Rand Merchant Bank, a division of FirstRand Bank Limited
   Mettle Corporate Finance Proprietary Limited

   Attorneys
   Cliffe Dekker Hofmeyr Inc.

Date: 23/08/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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