2019 is off to a promising start for the Ecsponent Group and we are pleased to share some of the recent developments with you.
1. New board committee appointments
We are fortunate to have the support of a balanced board, consisting of four independent non-executive directors and three executive directors, with such extraordinary skills and experience. These appointments will continue to be support the Group’s sustainability, underpin delivery against strategy and uphold the highest levels of governance.
- Keith Rayner is appointed as chairman of the company’s Audit and Risk committee and also serves as member of the Social and Ethics committee.
- Keith holds several board seats and is chairman of Sibanye Stillwater’s Audit Committee and has been an Ecsponent director since 2011. He is the former chairman of the Remuneration and Nomination committee and a doyen in the in the South African regulatory and trading environments.
- As independent non-executive director, Patrick Matute will chair the Nomination and Remuneration committee.
- Patrick was appointed as non-executive directors to Ecsponent’s board in 2016. His extensive experience in financial services, corporate finance and private equity, in sub-Saharan African markets makes an invaluable contribution to Ecsponent’s strategy.
- George Manyere will become executive vice chairman of the board.
- George’s experience at the International Finance Corporation (IFC) and success in growing and listing Brainworks have been invaluable in our institutional capital raising initiatives and steering our African growth agenda. With our eye on strategic African expansion, George has a critical role to play as an executive director.
- The remainder of the board comprises Richard Connellan as chairman, Terence Gregory as CEO, Dirk van der Merwe as the financial director and Willem Oberholzer as an independent non-executive director and chairman of the Social and Ethics committee.
- For more information about the board of directors, visit https://www.ecsponentlimited.com/leadership-team/
2. Our green energy investment supports local development
In 2018, we announced plans to invest in the development of renewable energy projects in sub-Saharan Africa.
One of these equity investments is support for Invest Solar Africa Limited, a Botswana-based renewable energy investor and independent power producer (IPP). This pan-African IPP is planning to list on the Venture Capital Board of the Botswana Stock Exchange through an initial public offering (IPO).
Invest Solar’s first project is the Havara solar plant, with the capacity to add 22 megawatts to Zimbabwe’s power grid, scheduled for commissioning in the second quarter of this year. In addition to the initial 22MW, an additional 20MW is planned as a second phase of this project.
Through its Supply Chain Solution, the Ecsponent group has been enabling regional vendors in the countries to supply major equipment, including batteries, solar panels, inverters, mountings and transformers to various renewable energy projects. Over the past two years Ecsponent has received orders of over US$17.4 million through its specialised procurement business.
While our support for this and other renewable energy projects continues, the management of Invest Solar took a strategic decision to delay the IPO to coincide with the commissioning of the Havara plant. Accordingly, Ecsponent today announced that it will not be issuing a circular to shareholders to approve the support for the IPO at this point in time. It will re-enter negotiations once the IPO has been rescheduled and engage with shareholders to pursue an investment in Invest Solar Africa once the Havara project has been commissioned.
3. Cementing our position in the African fintech environment
In another announcement today, we shared details of an agreement in respect of Ecsponent’s investment in Luxemburg-based and Frankfurt Stock Exchange listed fintech innovator MyBucks S.A (MyBucks).
In terms of the agreement with the Claymore Private Foundation (Claymore), a consortium of private investors, Claymore will have a call option until 31 December 2023 to purchase all MyBucks securities held by the Ecsponent group. The agreed strike price will be at €14 until 31 December 2019 and increases by one Euro each year until 2023 when the strike price will be €18.
Should Claymore choose not to exercise this call option before 31 December 2023, Ecsponent may exercise its put option, at a strike price of €18 to acquire all MyBucks securities held by Claymore, providing it with a controlling stake in the company.
This agreement mitigates the Group’s downside valuation risk, but without limiting an opportunistic upside realisation. It gives us the best of both worlds as opportunities in the next five years.
Fintech is already bridging significant infrastructure gaps hampering the ease of transacting in Africa, which also means that the industry is in the right phase for investment now. All our investments have specific exit parameters and the MyBucks investment is no different. This agreement gives us a defined exit strategy over the next five years.
The MyBucks group holds various banking licenses, the intellectual property rights on bespoke artificial intelligence (AI) developments and scalable credit scoring systems. Depending on market developments and consumer requirements, there would be value in developing these assets in future. The put option will give us the ability to acquire the majority shareholding in MyBucks, enabling the Ecsponent group to influence how these assets are commercialised in future. The timing of our option is such that the business would have reached maturity, resulting in a positive impact on the Group’s balance sheet.