SENS: EPE CAPITAL PARTNERS – Voluntary Update on Partial Sale of an Underlying Investment

VOLUNTARY UPDATE ON PARTIAL SALE OF AN UNDERLYING INVESTMENT

Ethos Capital is an investment holding company, registered, and incorporated in Mauritius. It is listed on the Johannesburg Stock Exchange 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”).
Partial sale of underlying investment in Portfolio Company

Ethos Capital owns in aggregate, through its different investments in Ethos Funds, 10.29% of Channel VAS Investments Limited (“Channel VAS”), a leading provider of Airtime Credit Services and Mobile Financial Solutions across 28 countries in Africa. At 30 June 2020, the stake was valued at US$31.6 million and constituted 29% of Ethos Capital’s Total Assets.

In line with the Board’s stated strategy of optimising capital allocation and enhancing shareholder value, Ethos Capital has sold a 1.4% stake in Channel VAS at a consideration of US$5 million (R76.6 million). The sale consideration has valued Ethos Capital’s stake in Channel VAS at US$36.7 million (a 16% premium to the valuation as at 30 June 2020). Over the two-year hold period, this partial realisation delivered in ZAR a money back multiple of 1.6x and an IRR of 27%.

Post the transaction, Ethos Capital will retain an aggregate stake of 8.89% in Channel VAS with a valuation (based on the transaction value) of US$31.7 million. The proceeds of the sale will be used to repay existing borrowings in Ethos Capital which will provide additional flexibility to execute on its strategies to enhance shareholder value.