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ECSPONENT LIMITED - MyBucks' 2nd phase of its financial restructuring, disposal of MHMK Capital & B-BBEE Annual Compliance Report

Release Date: 25/06/2020 17:50
 
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MyBucks' 2nd phase of its financial restructuring, disposal of MHMK Capital & B-BBEE Annual Compliance Report

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

VOLUNTARY ANNOUNCEMENT REGARDING MYBUCKS COMPLETION OF SECOND PHASE OF FINANCIAL RESTRUCTURING AND BOARD APPOINTMENTS, THE DISPOSAL OF
MHMK CAPITAL AND B-BBEE ANNUAL COMPLIANCE REPORT

Ecsponent is pleased to announce an update to stakeholders of various initiatives which have been
implemented subsequent to the Company’s general meeting held on 27 May 2020.

ECSPONENT’S LARGEST INVESTMENT, MYBUCKS, COMPLETES SECOND PHASE OF FINANCIAL
RESTRUCTURING AND NEW BOARD APPOINTMENTS

The Company is pleased to advise that MyBucks S.A. (“MyBucks”) completed its second phase of financial
restructuring, consisting of:

   •   External debt reduced by c. EUR26.5m through the effective sale of operations in Botswana and the
       disposal of equity stakes in its operations in Mozambique and Zambia.
   •   Malawian balance sheet strengthened through the introduction of a local partner with parallel c.
       EUR6m liquidity unlocked for further debt reduction for MyBucks.
   •   Residual debt of EUR108m at the start of the restructuring process as of 31 March 2019, has now
       been reduced by EUR83m, to remaining net debt of EUR25m.
   •   Appointment of Patrick Matute as an Executive Board Member, appointment of Craig Lyons as
       Chairman of the board of MyBucks with a phase-out of Timothy Nuy as CEO of MyBucks following
       the successful completion of the restructuring of the Company’s board of directors (“Board”) (as
       announced on SENS by Ecsponent on 5 June 2020).

The       full    announcement        by     MyBucks      S.A.      can      be        viewed           at:
https://corporate.mybucks.com/articles/mybucks-sa-completes-second-phase-of-financial-
restructuring/6R7Qq3FvmQctOy0Zefqbpm.

DISPOSAL OF MHMK CAPITAL

The Board is pleased to announce that the group concluded a transaction on 22 June 2020 in terms of which
its wholly owned subsidiary, Ecsponent South Africa Proprietary Limited (“Ecs SA”) disposed of its 70%
interest in MHMK Capital Proprietary Limited (“MHMK Capital”) to a BEE consortium led by the black
founding members of Ngwedi Capital Holdings (“Ngwedi”).

The total cash consideration for the disposal by Ecs SA of its shares and claims in MHMK Capital will take
effect from 24 June 2020, with the purchase consideration payable on or before 31 December 2020.

Overview of MHMK Capital

MHMK Capital is a proprietary corporate venture capital firm, whose mandate is to invest in external start-
up companies which are deemed to have both long term strategic and financial benefits. MHMK Capital’s
mandate was, to date, to develop and strengthen Ecsponent investment banking capabilities by targeting
investments in specialised financial services firms such as asset management, advisory, stockbroking and
private equity. MHMK Capital’s first investment was in Ngwedi. The Disposal results in Ecsponent no longer
having a direct or indirect interest in Ngwedi.

Ngwedi is an emerging Black-controlled Asset Management Holding Company. The South African domiciled
holding company operates under two wholly owned subsidiaries, namely Ngwedi Investment Managers Pty
Ltd (“NIM”) and Ngwedi Alternative Investment Managers (“NAIM”). NIM is an FSCA licensed traditional
asset manager offering fixed income, multi-asset and equity investment solutions to both institutional and
retail clients. NIM’s product offering is complemented by NAIM, which offers a full suite of alternative
investment products covering private credit, private equity and hedge fund solutions.

Categorisation of the Disposal

The Disposal is less than 5% of the Company’s market capitalisation as at 22 June 2020 and therefore does
not constitute a categorised transaction in terms of the JSE Listings Requirements, and accordingly does not
require approval by shareholders.

Trigger event

The Disposal will constitute the Company’s first trigger event as described in the terms of the Class D and
G preference shares, and distributions to preference shareholders as a result of the trigger event shall be
considered by the Board and announced at the appropriate time, taking into consideration the provisions of
the Companies Act (No 71 of 2008), terms of the Company’s Memorandum of Incorporation, consideration
received and operational and cashflow requirements of the Company.

B-BBEE ANNUAL COMPLIANCE REPORT

In accordance with Appendix 1 to Section 11 of the JSE Listings Requirements, notice is hereby given that
the Company’s 2020 Annual Compliance Report, in terms of section 13G(2) of the Broad Based Black
Economic    Empowerment      Amendment       Act,   is    available   on   the    Company’s      website:
https://www.ecsponentlimited.com/wp-content/uploads/2020/06/BBEEEcert.pdf.

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

Pretoria
25 June 2020

Sponsor to Ecsponent
Questco Corporate Advisory (Pty) Ltd

Date: 25-06-2020 05:50:00
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