Wrap Text
Voluntary performance update, Brait announcement and new commitment
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")
VOLUNTARY PERFORMANCE UPDATE, BRAIT ANNOUNCEMENT AND NEW COMMITMENT
Ethos Capital is an investment holding company, registered, and incorporated in Mauritius. It is listed on the
Johannesburg Stock Exchange (“JSE”) and offers shareholders potential long-term capital appreciation by
making commitments and investments into Funds or co-investments that are actively managed by Ethos
Private Equity (Pty) Limited (“Ethos”), providing the Company with exposure to a diversified portfolio of
unlisted private equity type investments (“Portfolio Companies”).
Below is a voluntary update of the Company since the annual results announcement published in September
2021.
Net Asset Value (“NAV”) and NAV per share (“NAVPS”)
The NAVPS of Ethos Capital, including the Brait PLC (“Brait”) investment at its NAVPS, increased by 4% in the
quarter to 30 September 2021, from R9.19 to R9.57. Based on the Brait share price of R4.18 as at 30
September 2021, the Ethos Capital NAVPS increased by c.14% from R6.67 to R7.58.
The Ethos Capital unlisted portfolio continued its strong recovery in profitability which resulted in asset
valuations increasing by c.4% in the quarter to 30 September 2021. This increase was driven by a broad base of
valuation increases across most of the Portfolio Companies. Brait announced a 3% increase in its NAVPS to
R8.14 as at 30 September 2021 (31 March 2021: R7.90). This increase was largely attributable to Premier
Foods which grew EBITDA by 20% over the six-month period.
The Ethos Capital listed portfolio benefited from a 55% increase in the share price of MTN Zakhele Futhi and a
46% increase in the Brait share price over the quarter.
The table below sets out the portfolio valuation and Company’s NAVPS as at 3 0 September 2021:
Ethos Capital portfolio
(excl. Brait) Brait portfolio Combined portfolio
June 21 Sept 21 Sept 21 Sept 21
At R8.14 At R4.18 At R8.14 At R4.18
NAV ('million) 1,458 1,547 1,051 540 2,598 2,087
NAVPS – Rand
Invested capital 10.10 8.11
Net liabilities (0.53) (0.53)
Total 9.57 7.58
Brait results update
Brait announced its interim results for the six months ended 30 September 2021 today, and the launch of a
rights offer to its shareholders to subscribe for up to R3.0 billion in 2024 Exchangeable Bonds to be listed on
the JSE. The 2024 Exchangeable Bonds will be issued by Brait’s wholly-owned subsidiary, Brait Investment
Holdings Limited, and are exchangeable (at the holder’s election) into Brait ordinary shares.
Brait’s NAVPS of R8.14 at 30 September 2021 represents a 3.0% increase on 30 June 2021 NAVPS of R7.90
driven by:
• Premier’s continued strong operational and financial performance with 1H22 EBITDA up 20% year -on-year
driven by volume increases and price inflation;
• Virgin Active’s continued recovery from the effects of Coronavirus-induced lockdowns with all clubs now
open and operational; and
• New Look’s strategy starting to take hold with a strong turnaround in profitability in the business.
The Coronavirus related underperformance of Virgin Active has required significant shareholder capital
contributions as a result of the restructuring of the business. This has necessitated a comprehensive funding
solution for Brait to optimise its exit programme, whilst maximising optionality for shareholders. The Brait
board has decided to raise up to R3.0 billion by way of a renounceable rights offer to Brait shareholders of the
2024 Exchangeable Bonds as mentioned above. Brait has secured irrevocable undertakings and underwriting
commitments of R2.7 billion to subscribe for the 2024 Exchangeable Bonds. The net proceeds raised from the
rights offer will be used to settle a material portion of the drawn balance outstanding on the Brait Mauritius
Limited revolving credit facility (“BML RCF”), thereby providing the Brait group with a cost-effective refinancing
which will result in estimated interest savings of c.R200 million for calendar year 2022 and a significantly
improved liquidity position.
The salient terms of the 2024 Exchangeable Bonds are as follows:
• To be listed on the JSE;
• Fixed 5% coupon payable in cash semi-annually in arrears;
• Exchangeable into a fixed number of Brait ordinary shares at the holder’s election ;
• Maturity date of 3 December 2024;
• Initial exchange price of R4.37 (representing a 5% discount to the 5-business day VWAP of a Brait ordinary
share price prior to the announcement of the rights offer); and
• Structurally senior to Brait’s existing GBP150 million Convertible Bonds due December 2024 but
subordinated versus the existing BML RCF.
Participation in Brait rights offer
The Ethos Capital Board believes that the 2024 Exchangeable Bond, which provides full equity upside in the
Brait share price (which currently trades at a 44% discount to the Brait NAV) while securing significant
downside protection given the front-ranking bond nature of the instrument, is an attractive investment
opportunity.
In support of the Brait rights offer, Ethos Capital made an additional commitment of R171 million to Ethos
Direct Investment Partnership (“EDI”) in the ordinary course of business pursuant to its investment strategy.
This enabled the Ethos group (as the general partner of the relevant Ethos Funds) to provide Brait with an
irrevocable undertaking, on behalf of Ethos Fund VII and EDI, to vote in favour of the requisite Brait
shareholder resolutions required to implement the rights offer, and to follow their respective rights under the
rights offer.
The total implied participation by Ethos Capital in the proposed Brait rights offer, through EDI (R171 million)
and Ethos Fund VII (R123 million), is c.R294 million. The EDI participation will be funded by Ethos Capital’s
existing debt facilities and the Ethos Fund VII participation will be funded through a new debt facility raised by
the Fund (with no recourse to Ethos Capital).
For further information on the Brait results, the rights offer, including the expected timing of implementation,
please refer to the Brait interim results for the six months ended 30 September 2021 announcement that was
published on the Stock Exchange News Service today and is available at
http://brait.investoreports.com/investor-relations/results-and-reports/
Disclaimer
The financial information on which this announcement is based has not been audited, reviewed, and reported on by the Company’s external
auditors.
Ebene, Mauritius (with simultaneous circulation in Johannesburg)
23 November 2021
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 23-11-2021 09:13:00
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.
Sharenet Sites 
