Ethos Capital Advances Holistic Capital Return After Optasia Listing

Ethos Capital Partners Ltd (Ethos Capital) is entering a new phase in its journey to return value to shareholders and prepare for an orderly wind-down over the short to medium term. 

The Board received an offer which, together with the Optasia listing and the planned unbundling of the Brait Exchangeable Bonds, forms part of a broader plan to return capital to shareholders - reflecting Ethos Capital’s focus on unlocking value from its portfolio while ensuring that shareholders benefit from each milestone in the company’s transition.

Optasia’s Successful Listing Strengthens Ethos Capital’s Position

Optasia’s recent listing on the Johannesburg Stock Exchange has been a major milestone for Ethos Capital, which holds an indirect stake through the Ethos Optasia Consortium SPV. As part of the listing, Ethos Capital sold 26.4% of its Optasia shares at R19.00 per share, realising approximately R370 million in gross proceeds. 

This reduced its indirect holding in Optasia from 6.5% to 4.5%, while the listing price represented a premium to Optasia’s previously reported valuation. As a result, Ethos Capital’s Net Asset Value per Share (NAVPS) increased from R8.57 to R9.39. This outcome highlights the positive financial impact of the listing and strengthens the company’s ability to deliver enhanced value to shareholders.

Unbundling of Exchangeable Bonds to Return Direct Value

In addition to the Optasia listing, Ethos Capital plans to unbundle its Brait Exchangeable Bonds to shareholders as part of its strategy to distribute value more directly. At the moment, Brait Exchangeable Bonds are illiquid debt instruments from Brait Investment Holdings (BIH) that can be exchanged for ordinary Brait PLC shares upon their expiry in 2027.

As part of the unbundling, every shareholder will receive approximately 0.08680 Exchangeable Bonds for every 100 Ethos Capital shares held, representing an implied value of about R0.74 per share.

Investors looking to sell before maturity should be mindful that the bond may at times have a wide bid-ask spread due to lack of liquidity.

The company is awaiting approval from the South African Reserve Bank to proceed, after which it will announce the implementation timeline. This initiative will simplify Ethos Capital’s structure and provide shareholders with a tangible return, aligning with the company’s broader goal of efficiently winding down its portfolio.

Proposed Disposal of Residual Assets

Further supporting its capital return strategy, the Board is considering an offer from a large South African financial institution to acquire Ethos Capital’s residual assets: all holdings excluding its stake in Optasia and the Exchangeable Bonds. 

The offer values these assets at R626 million, representing a 29% discount to their net asset value, but still better than the average discounts seen in private equity secondary markets. The proposed sale is expected to also cut operating costs by around R10 million per year and remove ongoing management and performance fees. Once these cost savings are considered, the effective discount narrows to about 19%, making this option a more efficient and value-enhancing route compared to a slower run-down of the portfolio.

Shareholder Impact and Path Ahead

If these steps are completed, Ethos Capital’s remaining asset would be its Optasia stake, which the company plans to monetise after the six-month post-listing lock-up period. 

Taken together, the Optasia sale, the unbundling of the Exchangeable Bonds, and the disposal of residual assets are expected to deliver an estimated R4.33 in value per Ethos Capital share.

This includes:

• R2.45 in cash from the asset sale,
• R0.74 from the unbundled bonds,
• and a distribution of R1.14 per share from the Optasia transaction. 

In addition, shareholders will retain their indirect exposure to Optasia, valued at approximately R4.11 per Ethos Capital share based on the listing price.

This implies a total value of R8.44 per share – a 10% discount to its NAV as indicated in the announcement and a 5% premium to the share price at the time of writing.

• A discount to NAV means the company’s shares trade below the value of its underlying assets.
• A premium to the share price means the estimated value is higher than what the market is currently pricing the shares at.

Salient date:

• Finalisation date: 25 November 2025 
• Last date to trade to participate in the Brait Unbundling 02 December 2025
• Brait Unbundling to be implemented: 08 December 2025

Collectively, these actions reflect Ethos Capital’s clear and structured approach to maximising shareholder returns while concluding its investment journey in a controlled and rewarding way. 

Sources – EasyEquities.

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