ANNOUNCEMENT OF RIGHTS ISSUE, NEW COMMITMENT, INVESTMENT IN BRAIT, ETHOS CAPITAL DEBT FACILITY AND RELATED DIRECTOR DISCLOSURES

ANNOUNCEMENT OF RIGHTS ISSUE, NEW COMMITMENT, INVESTMENT IN BRAIT, ETHOS CAPITAL DEBT FACILITY AND RELATED DIRECTOR DISCLOSURES

Ethos Capital is an investment company, registered and incorporated in Mauritius as a public company. It is listed on the Johannesburg Stock Exchange and offers shareholders long-term capital appreciation by making commitments and investments into Funds or Co-Investments that are 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”).

RIGHTS ISSUE

The Company successfully raised R750 million through a fully committed and underwritten Rights Issue that completed on Wednesday 12 February 2020, which increased the Company’s total assets to R2.7 billion.

Brait Societas Europaea (“Brait”) announced on 17 February 2020 the completion of its Equity Raise of R5.25 billion, which was significantly oversubscribed. As part of the transaction agreements, because Ethos Capital and Ethos Fund VII (“the Ethos Consortium”) did not receive its full allocation of Brait shares as part of the underwriting agreement, the Ethos Consortium subscribed for a further R0.35 billion shares issued by Brait, bringing the total Brait Equity Raise to R5.6 billion.

NEW COMMITMENT and INVESTMENT IN BRAIT

In order to facilitate the investment into Brait, the Company made a new commitment of R600 million to Ethos Direct Investment Partnership (“EDI”) in accordance with its investment strategy. EDI then co-invested alongside Ethos Fund VII (“EF VII”) into Brait, by participating in the Brait Equity Raise. Through its commitment to EDI and its prior commitment to EF VII, Ethos Capital’s investment participation in Brait is R1.04 billion, which has increased Ethos Capital’s invested capital to R2.7 billion.

ETHOS CAPITAL DEBT FACILITY AND RELATED DIRECTOR DISCLOSURES

The Company entered into a five-year revolving credit facility with FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (“RMB”) on 13 February 2020 which will expire in February 2025. The credit facility is secured against the Company’s assets and this security is capped at a maximum of 4.5x the Company’s Net Asset Value (subject to agreed value adjustments).

To facilitate entering into the revolving credit facility, the Company was required to extend the term of the existing five-year non-recourse loan facility (“the Existing Facility”) to correspond with the expiry date of the revolving credit facility in February 2025.

As previously noted in the Pre-Listing Statement and the Company’s Annual Financial Statements, the R105 million Existing Facility was originally concluded at the time of the listing, to facilitate the acquisition of 13.5 million A Ordinary shares by Black Hawk Private Equity Proprietary Limited (“Black Hawk”) in conjunction with R30 million of funding provided by the Black Hawk shareholders in relation to the acquisition. Black Hawk is an entity indirectly owned by trusts of which two non-executive Directors of the Company and members of the Investment Committee, Messrs Michael Pfaff and Derek Prout-Jones, are trustees and discretionary beneficiaries alongside their associates.

At the time of listing, Ethos Capital provided a guarantee to the funders of the Existing Facility which currently amounts to c. R140 million. The duration of this guarantee has been extended to match the extended duration of the Existing Facility. At the time of the Company’s listing, Black Hawk pledged 13.5 million of the Company’s A Ordinary shares held by it as security in favour of the Company; the current market value of which is c. R95 million (based on the closing price of the Company’s A Ordinary shares on 18 February 2020 of R7.04). This security arrangement in favour of the Company will continue for the revised duration of the Existing Facility.