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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
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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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