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EPE CAPITAL PARTNERS LIMITED - Declaration announcement and terms of the fully committed and underwritten Ethos Capital renounceable rights offer

Release Date: 14/01/2020 15:31
Code(s): EPE     PDF:  
 
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Declaration announcement and terms of the fully committed and underwritten Ethos Capital renounceable rights offer

EPE CAPITAL PARTNERS LTD
(Incorporated in the Republic of Mauritius)
(Registration number: C138883 C1/GBL)
ISIN: MU0522S00005
Share Code: EPE
(“Ethos Capital” or “the Company”)
_________________________________________________________________________________

DECLARATION ANNOUNCEMENT AND TERMS OF THE FULLY COMMITTED AND
UNDERWRITTEN ETHOS CAPITAL RENOUNCEABLE RIGHTS OFFER
_________________________________________________________________________________

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN AND ANY OTHER
TERRITORY WHERE THE EXTENSION OR MAKING OF THE RIGHTS OFFER WOULD BE
UNLAWFUL OR IN CONTRAVENTION OF CERTAIN LAWS OR REGULATIONS. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE
UNITED STATES OR ANY OTHER JURISDICATION.

1. Introduction

   Shareholders are referred to the announcements released on the Stock Exchange News Service
   (“SENS”) of the JSE Limited (“JSE”) on Wednesday 27 November 2019 wherein Ethos Capital
   announced its intention to undertake a renounceable rights offer of up to ZAR750 million (“Ethos
   Capital Rights Offer”). Shareholders are further referred to the Brait SE (“Brait”) SENS
   announcement released on the same day setting out details of, inter alia, a proposed equity capital
   raise by Brait (“Brait Equity Raise”) and to the announcement released by Brait on SENS today,
   Tuesday 14 January 2020, advising that Brait shareholders had approved all of the resolutions
   required for the implementation of the Brait Equity Raise at a general meeting of Brait shareholders.
   The passing of these resolutions was a condition precedent to the Ethos Capital Rights Offer.
   Accordingly, the board of directors of Ethos Capital (“Board”) have approved Ethos Capital's
   participation in the Brait Equity Raise as set out in the announcement of Wednesday, 27 November
   2019.

2. Rationale for the Ethos Capital Rights Offer

   The Board believes that participating in the Brait Equity Raise presents a unique investment
   opportunity for Ethos Capital, alongside Ethos Fund VII (collectively “Ethos”), which is in line with
   Ethos Capital's investment strategy.

   Brait has a portfolio of high-quality assets and the Brait board has resolved to revise its strategy
   from that of an investment holding company to focusing on maximising value through the realisation
   of its existing assets over the next five years and returning capital to Brait shareholders. The Brait
   Equity Raise will provide Brait with sufficient funding headroom to implement the new strategy and
   provides Brait with sufficient flexibility to manage its portfolio of investments and to execute on the
   new strategy in an optimal manner. Ethos Private Equity will assume the role as the advisor to the
   Brait Board on the overall portfolio value optimisation and maximisation strategy pursuant to an
   advisory agreement with Brait.

   Participating in the Brait Equity Raise will provide Ethos Capital shareholders with access to a high-
   quality asset base that complements the Company's existing investments, adding sector and
   geographic diversification. The potential unlock of value through the Brait value realisation strategy
   could provide strong capital flows to Ethos Capital over the medium term, which will have a positive
   impact on returns and liquidity.

   In order for Ethos Capital to fully fund its portion of the commitments in terms of Ethos’ ZAR1,350
   million investment in Brait, the Company proposes to raise up to ZAR750 million, through the Ethos
   Capital Rights Offer.

3. Salient terms of the Ethos Capital Rights Offer

   Ethos Capital proposes to raise up to ZAR750 million through an offer of 100 000 000 Ethos Capital
   A ordinary shares (“Rights Offer Shares”) at a price of ZAR7.50 per Rights Offer Share (“Rights
   Offer Price”) in the ratio of 58.47953 Rights Offer Shares for every 100 existing Ethos Capital A
   ordinary shares held on the record date for the Ethos Capital Rights Offer, being Friday, 24 January
   2020. The Rights Offer Price represents a 0.4% discount to the 10 day volume weighted average
   price of Ethos Capital’s A ordinary shares as at Monday, 13 January 2020.

   Application will be made to the JSE for the listing on the securities exchange operated by the JSE
   of:
   -  the letters of allocation in respect of the Ethos Capital Rights Offer which will be listed on the
      JSE from the commencement of business on Wednesday, 22 January 2020 until the close of
      business on Tuesday, 4 February 2020, both days inclusive, under the JSE code EPEN and
      ISIN MU0522H00016; and
   -  the Rights Offer Shares which will be listed with effect from the commencement of business on
      Wednesday, 5 February 2020.

   The Rights Offer Shares will, upon issue and allotment, rank pari passu with all other A ordinary
   shares in Ethos Capital.

   Ethos Capital shareholders will be entitled to apply for additional Rights Offer Shares over and
   above their entitlement.

4. Commitments and underwriting

   The Ethos Capital Rights Offer is fully committed and underwritten. Ethos Capital has obtained
   irrevocable subscription commitments from certain shareholders representing c. 44% of the
   issued A ordinary shares, in terms of which each such shareholder has irrevocably undertaken to
   follow all or a portion of the rights allocated to them in the Ethos Capital Rights Offer and to
   subscribe and make payment of the aggregate price for the resultant number of Rights Offer
   Shares issued to them in the Ethos Capital Rights Offer in accordance with the terms of the Ethos
   Capital Rights Offer circular as follows:

   -   Kagiso Asset Management in respect of all of the A ordinary shares held by it at the relevant
       time, being 15 700 000 A ordinary shares;
   -   The family trusts of Derek Prout-Jones and Michael Pfaff, which they manage and invest
       through 4 Decades Capital, to follow rights up to a fixed rand value of R20 million; 1
   -   Abax Investments in respect of all of the A ordinary shares held by it at the relevant time, being
       17 090 118 A ordinary shares;
   -   ClucasGray in respect of 4 000 000 A ordinary shares held by it;
   -   Coronation Asset Management in respect of all of the A ordinary shares held by it at the relevant
       time, being 10 185 994 A ordinary shares;
   -   Ethos Private Equity in respect of all of A ordinary shares held by it at the relevant time, being
       5 250 000 A ordinary shares;
   -   Jean-Pierre van Onselen in respect of all the A ordinary shares held by him at the relevant time,
       being 200 000 A ordinary shares;
   -   Mergence Group in respect of all of the A ordinary shares held by it at the relevant time, being
       13 967 102 A ordinary shares;
   -   Peter Hayward-Butt, in respect of all of the A ordinary shares held by him at the relevant time,
       being 914 000 A ordinary shares; and
   -   Yvonne Stillhart, in respect of all of the A ordinary shares held by her at the relevant time, being
       610 000 A ordinary shares.

1
  This includes rights renounced and/or transferred to 4 Decades Capital by Black Hawk Private Equity Proprietary Limited
  which is a vehicle indirectly owned by non-executive director Michael Pfaff and Derek Prout-Jones, through their respective
  family trusts.
  
  The value of such irrevocable subscription commitments represent c. R330 million.

  In addition, the following shareholders and investors have irrevocably undertaken to underwrite a
  portion of the Ethos Capital Rights Offer for approximately ZAR420 million in aggregate, as set
  out below:

                                             Value of Ethos Capital A ordinary shares
  Name of underwriters                                                   underwritten

  Consolidated Retirement Fund                                            200 000 000
  Coronation Asset Management                                             130 000 000
  Laurium Capital                                                          38 000 000
  Mergence Group                                                           30 000 000
  Ethos Private Equity                                                     22 000 000
  Total                                                                   420 000 000

Entitlement

   The allocation of Rights Offer Shares will be such that shareholders will not be allocated a fraction
   of a Rights Offer Share, and any entitlement to receive a fraction of a Rights Offer Share will be:
   - rounded down to the nearest whole number if less than half a Rights Offer Share; and
   - rounded up to the nearest whole number if more than or equal to half of a Rights Offer Share.

5. Conditions precedent

   The implementation of the Ethos Capital Rights Offer is subject to the JSE granting a listing of the
   letters of allocation and the Rights Offer Shares on the securities exchange operated by the JSE in
   respect of the Ethos Capital Rights Offer.

   Additionally, the Board reserves the right, in its discretion, to decide not to proceed with the
   Ethos Capital Rights Offer until 11:00 on the last day to trade in the A ordinary shares in
   Ethos Capital in order to participate in the Ethos Capital Rights Offer, being Tuesday,
   21 January 2020, on the basis that the finalisation announcement in respect of the Brait
   Rights Offer has not been issued by Brait by such time or if Brait has announced that it is
   no longer proceeding with the Brait Rights Offer and/or the Brait Equity Raise. This
   discretion will include, but not be limited to, the right to amend the timetable for the Ethos
   Capital Rights Offer.

6. Foreign shareholders

   Foreign shareholders may be affected by the Ethos Capital Rights Offer, having regard to prevailing
   laws in their relevant jurisdictions. Such foreign shareholders should inform themselves with regard
   to and observe any applicable legal requirements of such jurisdiction in relation to all aspects of
   this announcement that may affect them, including the Ethos Capital Rights Offer. It is the
   responsibility of each foreign shareholder to satisfy himself/herself as to the full observation of the
   laws and regulatory requirements of the relevant foreign jurisdiction in connection with the Ethos
   Capital Rights Offer, including obtaining any governmental, exchange or other consents or the
   making of any filing which may be required, the compliance with any other necessary formalities
   and the payment of any issue, transfer or other taxes or other requisite payments due in such
   jurisdictions. Further, to the fullest extent permitted by applicable laws, Ethos Capital disclaims any
   and all responsibility or liability for the violation of such requirements by any persons in any
   jurisdiction. The Ethos Capital Rights Offer is governed by the laws of South Africa and is subject
   to applicable laws and regulations, including exchange control regulations. Nothing in this
   declaration announcement or the Ethos Capital Rights Offer circular referred to herein constitutes
   an offer to sell the letters of allocation or the Rights Offer Shares to any person in any jurisdiction
   where it is unlawful to do so, or a solicitation of an offer to buy the letters of allocation or the Rights
   Offer Shares from a person in a jurisdiction in which it is unlawful to make such solicitation.

7. Salient dates and times

                                                                                                  2020
   Declaration announcement released on SENS on                                    Tuesday, 14 January
   Finalisation announcement released by 11:00 (SAST) on SENS on                  Thursday, 16 January
   Circular made available on Ethos Capital’s website,                             Tuesday, 21 January
   www.ethoscapital.mu at 12:00 (SAST) on
   Last day to trade in ordinary shares in order to qualify to participate in      Tuesday, 21 January
   the Ethos Capital Rights Offer (cum rights)
   Ethos Capital A ordinary shares commence trading ex-rights at 09:00           Wednesday, 22 January
   (SAST) on                                                                                   
   Listing of and trading in the letters of allocation commences under JSE       Wednesday, 22 January
   code EPEN and ISIN MU0522H00016 at 09:00 (SAST) on                                           
   Circular posted to qualifying shareholders on (to the extent applicable)       Thursday, 23 January
   Record date for the Ethos Capital Rights Offer, at the close of business         Friday, 24 January
   on
   Ethos Capital Rights Offer opens at 09:00 (SAST) on                              Monday, 27 January
   CSDP or broker accounts of qualifying shareholders credited with                 Monday, 27 January
   letters of allocation at 09:00 (SAST) on
   Last day to trade in letters of allocation in order to participate in the       Tuesday, 4 February
   Ethos Capital Rights Offer on
   Listing of Rights Offer Shares on the JSE commences at 09:00 (SAST)           Wednesday, 5 February
   on                                                                                          
   Ethos Capital Rights Offer closes at 12:00 (SAST) on                             Friday, 7 February
   Record date for letters of allocation on                                         Friday, 7 February
   Rights Offer Shares issued on                                                   Monday, 10 February
   In respect of qualifying shareholders (or their renounces or purchasers         Monday, 10 February
   of their letters of allocation), CSDP or broker accounts debited with the
   aggregate Rights Offer Price and updated with Rights Offer Shares at
   09:00 (SAST) on
   Results of the Ethos Capital Rights Offer released on SENS on                   Monday, 10 February
   In respect of successful excess applications (if applicable), Rights Offer   Wednesday, 12 February
   Shares issued to qualifying shareholders on or about                                       

Shareholders are advised that the dates and times in respect of the Ethos Capital Rights Offer may
change and any changes to the dates and times will be announced on SENS.

8. Ethos Capital Rights Offer circular

   Further details of the Ethos Capital Rights Offer will be disclosed in the Ethos Capital Rights Offer
   circular, which circular will be available on the Company’s website, www.ethoscapital.mu, from
   12:00 on Tuesday, 21 January 2020, and will be posted to qualifying shareholders on Thursday, 23
   January 2020 (to the extent applicable).

Ebène, Mauritius (with simultaneous circulation in Johannesburg)
14 January 2020

Sponsor to EPE Capital Partners Ltd
Rand Merchant Bank (A division of FirstRand
Bank Limited)

Legal advisor to EPE Capital Partners Ltd and
Ethos Fund VII as to South African law
Webber Wentzel

Legal advisor to EPE Capital Partners Ltd as to
Mauritian law

Financial advisor to EPE Capital Partners Ltd
Rothschild and Co South Africa (Pty) Ltd

Important Notice

The information contained herein is not for release, publication or distribution, directly or indirectly, in or
into the United States, its territories or possessions, Canada, Australia, Japan, Hong Kong or any other
jurisdiction in which the distribution or release would be unlawful. These materials are not and do not
contain an offer of securities for sale or a solicitation of an offer to purchase or subscribe for securities
in any jurisdiction, including the United States, Australia, Canada, Japan, Hong Kong or any other state
or jurisdiction in which such release, publication or distribution would be unlawful. The securities to
which these materials relate (the “Securities”) have not been, and will not be, registered under the U.S.
Securities Act of 1933 (the “Securities Act”), and may not be offered, sold, taken up, exercised, resold,
renounced, transferred or delivered, directly or indirectly, within the United States unless registered
under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration
under the Securities Act. There will be no public offer of the Securities in the United States. Subject to
certain exceptions, the Securities may not be offered or sold in Australia, Canada, Japan, Hong Kong
or any other jurisdiction in which it would be unlawful to do so or to, or for the account or benefit of, any
national, resident or citizen of such countries.

This announcement is only being distributed to and is only directed at: (i) persons who are outside the
United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); or (iii) high net worth
entities falling within Article 49(2)(a) to (d) of the Order; or (iv) persons to whom it may otherwise lawfully
be communicated (all such persons together being referred to as “Relevant Persons”). The Ethos
Capital Rights Offer shares are only available to, and any invitation, offer or agreement to subscribe,
purchase or otherwise acquire such Ethos Capital Rights Offer shares will be engaged in only with,
Relevant Persons. Any person who is not a Relevant Person should not act or rely on this
announcement or any of its contents.

In any member state of the European Economic Area (other than the United Kingdom) that has
implemented Regulation (EU) 2017/1129 (the “Prospectus Regulation”), this announcement is only
addressed to and is only directed at qualified investors in that member state within the meaning of the
Prospectus Regulation.

Date: 14-01-2020 03:31:00
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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