The 8% Unsecured Notes issued by Mercantile Investment Company Limited are due to be redeemed on 10 July 2021. Summary: In order to accommodate Noteholders wanting to redeem their Notes on 10 July 2021 as well as those Noteholders wanting to continue with a fixed income investment paying 4.8% per annum, MVT Directors have determined that seeking approval of the Noteholders to amend the terms of the Notes (the Restructure Proposal) is the most appropriate course of action. MVT has also undertaken a conditional placement to raise $15 million from the issue of new MVT notes to wholesale and sophisticated investors, conditional on approval of the Restructure Proposal (Conditional Placement). The bookbuild for the Conditional Placement was oversubscribed. Importantly, the Restructure Proposal does not prevent Noteholders from requesting redemption of their investment on the original maturity date. It simply adds the choice of extending the investment in the Notes, on amended terms. Alternatives considered by MVT: There were a number of ways MVT could fund the redemption. These included using cash resources supplemented by the sale of listed securities, new loans and/or the issue of new debt securities by SNC. The Directors also considered other factors including, but not limited to: the primary obligation to redeem the Notes on 10 July 2021 for cash; requests from existing Noteholders for a priority allocation in any new note issue under consideration by MVT or its parent; and the risks associated with each option considered by the Directors. After having considered the various options and having regard to the investor interest in a new fixed income security, the Directors of MVT have determined that seeking Noteholder approval to amend the terms of the Notes is the most appropriate course of action. The Restructure Proposal: MVT will seek Noteholders' approval for the Restructure Proposal. If approved, the Restructure Proposal will: Allow for the cash redemption of Notes for those Noteholders seeking to redeem their investment on 10 July 2021; Provide an opportunity for those Noteholders seeking to continue their investment on the amended terms. The Directors believe this is more efficient than undertaking an entirely new issue of securities as it builds on existing service provider relationships and effectively provides a "priority" for existing Noteholders; and Allow participants in the Conditional Placement to subscribe for $15 million of new Notes (under the amended terms). The Restructure Proposal will: extend the maturity date of the Notes from 10 July 2021 to 10 July 2026; change the interest rate payable to 4.8% for interest periods following 10 July 2021; introduce a guarantee from SNC, for the benefit of all Noteholders, in relation to MVT's financial obligations under the Note Terms; introduce an issuer right to redeem some or all Notes early (at face value plus accrued interest) at any time after 10 January 2026; and introduce a new investor protection that would see an increase in the interest rate payable by 2% per annum for periods during which the loan to asset ratio has exceeded 33.3% for the previous six months. Noteholders who wish to redeem their investment will still be able to do so if the Restructure Proposal is passed. If the Restructure Proposal is not approved, all Notes will be redeemed for cash on 10 July 2021 and the Conditional Placement will not proceed. Noteholders will not have any opportunity to continue their investment. Further details about the Restructure Proposal will be set out in a notice of meeting and explanatory memorandum to be despatched to Noteholders (Notice of Meeting). This is expected to be released to ASX on or around 28 May 2021.