Real People raises R400 million through equity capital raise

Real People Investment Holdings Ltd is pleased to announce the successful
conclusion of an equity capital raise, aimed at restoring the capital base of
the Group to levels where it can access further funding lines for the growth of
its continuing businesses, being the provision of Responsible Finance through
its Housing and SME lending businesses in South Africa and East Africa, and the
purchase and collection of non-performing debt portfolios, through its DMC brand
in South Africa.

The conclusion of the capital raise marks the end of a period of significant
change for the Group over the last 18 months during which the Group implemented:

  · a comprehensive shift in strategy which entailed closing its general purpose
unsecured lending and cellular retail businesses in South Africa, and adopting a
lending strategy focussed on exclusively providing economically productive
“responsible finance” in the form of Housing and SME finance;
  · a significant cost reduction and rationalisation programme which resulted in
the Group headcount reducing by almost 25%; and
  · significant changes in its accounting estimates relating to financial assets
as a consequence of both deteriorated collections and changes in market
practice.

The recently completed capital raise resulted in an improvement of approximately
R385 million in the Group’s capital base.

Subsequent to the capital raise, which was largely supported by existing
shareholders together with the Soros Economic Development Fund, the Group’s
capital adequacy levels are above the  minimum  levels required by its various
funding covenants and with the ongoing operations delivering profits on a
monthly basis together with collections and portfolio quality largely stable and
improving, the Group is now in a position to access funding lines that have been
made available to it by various developmental finance institutions, with the
objective of resuming an acceptable rate of balance sheet growth.

Commenting on the success of the capital raise, Group CEO Neil Grobbelaar
expressed his sincere gratitude to its participants for the faith placed in the
strategic direction of the Group and in the Board and management team.