SANTACO takes a stake in SA Taxi. Over the past decade, Transaction Capital's SA Taxi has extended loans of

close to 22 rand billion to taxi operators.

Transaction Capital has sold a 25% stake in SA Taxi to the SA National Taxi

Council (SANTACO) in a move that will bolster its balance sheet and give taxi

operators an interest in the business that sells them vehicles and provides

finance and insurance. Announcing the deal ahead of its year-end results

yesterday, Transaction Capital said the deal would help support the viability

of taxi operators' businesses and their ability to repay loans and afford

insurance premiums.

Over the past decade, SA Taxi has extended loans of close to 22 rand billion to

taxi operators.

Under the terms, SANTACO will subscribe for new shares worth 1.7 rand billion,

with proportional ownership allocated to the Council as well as a trust

representing its provincial structures. Standard Bank and Futuregrowth Asset

Management will fund 1.2 rand billion of the subscription price, with SA Taxi

facilitating the balance in the form of vendor funding. SA Taxi will use about

R1 billion of the net proceeds of 1.2 rand billion to settle interest bearing

external and shareholder debt, with the remainder being used to fund growth.

Although Transaction Capital's proportionate share of SA Taxi's earnings will

be smaller, earnings are expected to increase due to the settlement of debt,"

Transaction Capital said. "Seen together with the operational benefits

expected from greater alignment with the minibus taxi industry, this ground-

breaking deal is expected to be earnings accretive to the group over the

medium term."

The company said its SA Taxi and Transaction Capital Risk Services (TCRS)

businesses remained resilient over the past year despite the weak economy,

rising fuel prices and the hike in the VAT rate. Gross loans and advances rose

13% over the year, while non-interest revenue from insurance products

increased by 26%. Group core headline earnings increased by 18% to 682 rand

million, with SA Taxi growing headline earnings by 21% to 368 rand million and

TCRS up 17% to 273 rand million. Core headline earnings per share increased by 16%

to 111.7c and it's lifted its total dividend by a quarter to 50c per share.

Its shares closed 4% higher at 18.95 rand yesterday.

> Around 69% of all South African households use minibus taxis, equating to

more than 15 million commuter trips a day. - Transaction Capital, 2018

>

> -- Brillant el Matador aka Dividend Papi (@briteless) November 20, 2018

> SANTACO is proud to announce that it has bought 25% shares in SA Taxi

Finance, a subsidiary of Transaction Capital. This acquisition makes

provincial structures of the taxi industry direct shareholders and

beneficiaries in the transaction.

>

> -- SANTACO (@SA_Taxis) November 19, 2018