METTLE INVESTMENTS LIMITED - Detailed Cautionary Announcement Proposed dilution by MLE of its interest in Mettle Solar Investments Proprietary

Detailed Cautionary Announcement – Proposed dilution by MLE of its interest in Mettle Solar Investments Proprietary

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


     Detailed Cautionary Announcement – Proposed dilution by MLE of its interest in Mettle Solar Investments
                       Proprietary Limited (“MSI”) and Mettle Solar Africa Limited (“MSA”)


Overview of the Transaction

Shareholders are advised that the Company is in early negotiations with an established private equity
investor (“the Investor”) regarding the subscription by the Investor for shares (“Subscription Shares”) in MSI
and MSA (“the Companies”), which will result in the Investor holding 40% of the issued shares of each of the
Companies, for a total subscription amount of R106.7 million (the “Transaction”). For purposes of the
subscription the Companies have been valued at an aggregate of R160 million, after the capitalisation by the
existing shareholders of the Companies of shareholders’ loans of R112 831 029 (excluding capitalised
interest), of which R58 190 387 is a loan due to MLE.

MLE currently holds 55% of the issued share capital of the Companies, with Green Create Holdings Limited
and the Trigen Group Proprietary Limited (collectively, “the Norval Entities”), holding 35% and management
of the Companies (“Management”) holding, collectively, 10%. After the Transaction, MLE, the Norval
Entities and Management will hold 33%, 21% and 6% of the issued shares of the Companies, respectively.

The Transaction is still subject to a detailed due diligence process by the Investor, the signing of legally
binding documentation and a number of corporate, legal, regulatory and other conditions precedent.

Overview of the Companies and rationale for the Transaction

The Companies focus on the design, installation, financing and maintenance of commercial and industrial
solar photovoltaic (“PV”) systems. These solutions range from 80kWp to 10MWp systems for private
consumption to 5MWp systems for public consumption. The solutions are either grid-connected, hybrid
(solar and fuel powered generator) or off-grid (storage) solar PV solutions located across Sub-Saharan Africa
and the adjacent Indian Ocean islands. The terms on which these systems are provided range from turn-key
engineer, procure and construct (“EPC”) solutions with full performance warranties, to fully funded solar PV
systems with no capital outlay required by the client.

The Investor is focused on development finance and is an experienced investor on the African continent with
a number of African investments and a considerable network across the continent.

The board of directors of MLE believes that the Transaction will help to strengthen the balance sheets of the
Companies, enabling them to develop their businesses at a faster pace, and align the Companies with an
experienced strategic partner with considerable networks and experience in investing on the African
continent.

Cautionary statement

These negotiations, if successfully concluded, may have a material effect on the Company’s share price.

Accordingly, MLE shareholders are advised to exercise caution when dealing in their shares in the Company
until a further announcement is made.


Cape Town
1 March 2019

Corporate Advisor to MLE and the Companies
Mettle Corporate Finance (Pty) Ltd

Designated Advisor to MLE
Questco Corporate Advisory (Pty) Ltd

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