ECSPONENT LIMITED - R700 million loan financing from Afreximbank

Release Date: 18/02/2019 09:23
 
Wrap Text
R700 million loan financing from Afreximbank

ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
Debt Issuer Codes: ECSP and ECSD
(“Ecsponent” or “the Company”)


R700 MILLION LOAN FINANCING FROM AFREXIMBANK

HIGHLIGHTS

   -   Substantial move towards diversification of Ecsponent’s capital raising efforts; reducing reliance on
       retail funding.
   -   Proceeds to bolster SME lending business.
   -   Significant reduction in the Ecsponent’s weighted average cost of capital.
   -   Four-year, rand denominated facility.

The board of directors of the Company (“the Board”) is pleased to announce that the Company has
concluded a term sheet with the African Export-Import Bank (“Afreximbank”) for a R700 million dual-
tranche medium-term loan facility.

The provision of the facility is subject to standard conditions precedent, including a due diligence and
investor committee approval.

The facility will support Ecsponent’s lending activities to its growing SME portfolio, reduce funding costs
and improve profitability.

The transaction is in line with the Company’s ongoing efforts to diversify and grow its funding sources and
to strengthen its ability to service its growing credit operations, focused towards SMEs in South Africa and
neighbouring countries.

Ecsponent’s Credit operations provide the Company with short- and medium-term profitability. To date
these operations have been funded through a combination of its preference share and domestic medium-
term notes programmes, and more recently by institutional funding. The Afreximbank facility is expected
to bolster the Company’s results as the reduction in funding costs will translate directly into improved
profitability, while also improving tax efficiency.

For more information about this announcement or the Ecsponent group, email
investor.relations@ecsponent.com or visit www.ecsponentlimited.com/investor-relations

18 February 2019
Pretoria

Sponsor to Ecsponent

Questco Corporate Advisory (Pty) Ltd

About Ecsponent Limited

Ecsponent Limited (JSE: ECS) is listed on the JSE’s main board under the Financial Services - Specialty
Finance sector. It has a growing footprint across South Africa, Botswana, Swaziland, Zambia and
Zimbabwe. The Group creates wealth by investing in credit and equity opportunities in companies active in
attractive and high-growth sectors in select African markets. The Group’s credit activities are tailored
towards enterprise development initiatives that improve financial inclusion for SMEs operating in its select
markets in Africa. Its equity investment activities are sector agnostic and focused towards investing in
influential holdings in companies with substantial potential to achieve above average equity returns over a
medium to long term holding period.

About Afreximbank

The African Export-Import Bank (Afreximbank) is the foremost pan-African multilateral financial institution
devoted to financing and promoting intra- and extra-African trade. The Bank was established in October
1993 by African governments, African private and institutional investors, and non-African investors. Its
two basic constitutive documents are the Establishment Agreement, which gives it the status of an
international organization, and the Charter, which governs its corporate structure and operations. Since
1994, it has approved more than $67 billion in credit facilities for African businesses, including $7.2 billion
in 2018. Afreximbank had total assets of $11.9 billion as at 31 December 2017 and is rated BBB+ (GCR),
Baa1 (Moody’s), and BBB- (Fitch). The Bank is headquartered in Cairo. For more information, visit:
www.afreximbank.com.

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