Ecsponent secures R142m funding facility from the UK

JSE-LISTED financial services group Ecsponent said yesterday it had secured a R142 million funding facility from an unnamed UK-based corporate financier which the company said would fund the expansion of its operations in various African countries.

The move is consistent with the company’s previously stated objective to focus on African opportunities.

However, Ecsponent said the recently secured funding was not earmarked for acquisitions. “Our offset in Africa is through established channels and the demand is such that we can profitably deploy the funding in the territories where we already operate. In Africa, just like South Africa, we deploy the capital though our Business Credit business unit, which offers Secured SME Credit and Enterprise Development Funding. This credit facility will be deployed specifically towards Secured SME Credit,” the company said.

Ecsponent said its Investment Services business unit had so far raised more than R1 billion capital through its listed preference share programme, which has subsequently been deployed through the group’s various business units.

Ecsponent said it was constantly reviewing its funding options. “In addition to this funding, we are in discussions with other financiers to provide hard currency and local funding options to reduce our overall cost of capital further,” the company said.

Ecsponent said it could not name the financier because it was bound by confidentiality agreements.

The company said its ex- pertise in raising and profitably deploying capital had been a key driver behind its growth since 2010. It said the growth momentum allowed the group to continue broadening its funding base and thereby reducing the cost of capital, with the net result of ongoing and improved profitability. In the 15 months ended March 31 this year, Ecsponent’s revenue soared 122 percent to R321m, while earnings per share increased by 223.5 percent to 8.38 cents a share.

Ecsponent chief executive Terence Gregory yesterday said that the demand for funding in the various African countries was significant “and the offset is therefore secured”.

Gregory said the deployment of dollar-based funds would result in an increase of hard currency assets on the group’s balance sheet. He said the company’s business credit unit addressed the demand for funding and other problems facing small and medium enterprises in South Africa and certain markets in the rest of Africa.

“The banking sectors of many sub-Saharan African countries have significant growth potential but require funding to unlock it.”