Johannesburg – June 29, 2018 – Ecsponent Limited announced a series of transactions today, which will see the Group expand its African investment portfolio, with a particular focus on renewable energy and financial services that promote financial inclusion. Since the end of March 2018, the Group has announced its intention to conclude transactions in excess of R1 billion as a continuation of its strategy to enhance the Ecsponent Group’ Equity Holdings portfolio, by investing in assets that will provide the Group with medium to long-term capital growth.
In the transactions announced today, Ecsponent Treasury Services will acquire 100% equity in Pink Orchid, pending relevant shareholder and board approval, in a transaction worth R280-million. It involves the acquisition of various assets with profitable opportunities to extend its African and foreign currency investment portfolio.
In addition to the acquisition, Ecsponent has entered into an investment management agreement, which if approved, sees Ecsponent Limited, MHMK Capital and Ecsponent Botswana cooperate for 10 years, with the agreement renewable thereafter.
MHMK Capital is currently controlled by Zimbabwean businessman George Manyere. Manyere was the founder and CEO of Brainworks Limited, a diversified investment holding company and the first Zimbabwean company with a primary listing on the JSE’s main board. He is also the vice chairman of Ecsponent’s board and the company’s majority shareholder. MHMK Capital has a significant portfolio and pipeline of deals in several sectors and countries, which will assist in the Group achieving its objectives.
In another agreement, Ecsponent will subscribe for a maximum of 40 000 000 shares in Invest Solar Africa at a subscription price of one Botswana Pula per share.
The Group will also underwrite and subscribe for all the shares in Invest Solar Africa (up to a maximum of BWP30 000 000), which are not taken up during the initial public offering when Invest Solar lists its ordinary shares on the Venture Capital Board of the Botswana Stock Exchange.
Ecsponent CEO Terence Gregory said that these transactions will reinforce the group’s strategy to develop and expand its operations in the rest of Africa. “These important developments enable us to invest in entrepreneurs and companies with proven track records for building diversified and well-managed, high-growth opportunities,” said Gregory.
In May, Ecsponent outlined its strategy to bolster medium- and long-term growth by positioning the Group for investment opportunities, increasing equity holding in high-potential assets and continuing to create an efficient and professional management structure for its equity investments.
Gregory said that the acquisitions and agreements will present Ecsponent with opportunities to reduce foreign currency risk while providing exposure to investments on the continent outside of South Africa. In line with the Group’s objectives to promote financial inclusion in the territories where it operates, it will further enable Ecsponent to target high-potential small and medium-sized enterprises in the region, further develop commercial relationships with large corporates and provide access to management licenses in Botswana thereby improving its investment services offering.
“Ecsponent is on a path towards strengthening our core business while increasing our exposure to value-enhancing investments and continuing the balance sheet growth. As part of this drive to unlock increased value, our mission to expand and develop operations in the rest of Africa is an important and vital step,” said Gregory.
“These transactions offer the Group immense growth potential and Ecsponent is excited for the next chapter of investments as a result of these developments.”
About Pink Orchid
Pink Orchid will be incorporated as an investment holding company, holding material investments, either directly, or indirectly through its Botswana based, wholly-owned subsidiary, Fodnort (Pty) Ltd.
Founded by George Manyere in 2013, MHMK Capital is a privately held Africa-focused private equity investment and advisory firm that manages and provides advice on investments across multiple sectors. MHMK Capital aims to be the leading and preferred investment firm and partner of choice for companies and entrepreneurs seeking value-adding investors or advisers in its chosen markets in Sub-Saharan Africa. To date, MHMK Capital has invested in excess of US$700 million in sub-Saharan Africa and manages a portfolio of investments in excess of US$300 million.
Irogolo (Pty) Ltd, trading as Invest Solar Africa, is a renewable energy company focused on developing and financing income-generating renewable energy projects in selected markets within Africa. The company is targeting to fully design, finance and install Solar Photovoltaic plants with a generation capacity of 200MW+ over the next 36 months.