| Thu 7 Jun 2007, 12:58 | | IWE - Interwaste Holdings Limited - Abridged Prosp |
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JSE
IWE
IWE - Interwaste Holdings Limited - Abridged Prospectus
Interwaste Holdings Limited
(formerly Mentor Trading And Investment 66 (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/037223/06)
(JSE code: IWE ISIN: ZAE000097903)
("Interwaste Holdings" or "the company")
ABRIDGED PROSPECTUS
This abridged prospectus is not an invitation to the public to
subscribe for shares in Interwaste Holdings Limited ("Interwaste
Holdings"), but is issued in compliance with the Listings Requirements
("Listings Requirements") of the JSE Limited ("JSE") for information
purposes only. The information in this abridged prospectus has been
extracted from a full prospectus issued by Interwaste Holdings on
5 June 2007 ("the detailed prospectus"), which is available as set out
in paragraph 8. At the date of listing the authorised share capital of
Interwaste Holdings comprises 500 million ordinary shares with a par
value of 0.01 cent each, of which, after a private placement of
Interwaste Holdings ordinary shares by way of an offer by the company
for the subscription of 80 000 000 ordinary shares at an issue price of
100 cents per ordinary share in the share capital of Interwaste
Holdings thereby raising R80 million before expenses and an offer for
sale of 40 000 000 ordinary shares by the existing shareholders at a
price of 100 cents per ordinary share (together, "the private
placement"), 336 979 551 ordinary shares will be in issue.
Listing of Interwaste Holdings ordinary shares ("shares") on the JSE.
1. INCORPORATION AND HISTORY
1.1. Inter-Waste (Pty) Limited ("Inter-Waste") was founded 18 years ago
on 26 June 1989, by Alan and Bronwyn Willcocks and has been driven by
them to become the preferred waste management solutions provider.
1.2. Enviro-Fill (Pty) Limited ("Enviro-Fill"), a specialist landfill
and waste facilities management company, was co-founded in 1997 by Leon
Grobbelaar and Sipho Dube after it became evident that market
conditions were favourable for another player to enter the landfill
management market.
1.3. On 29 June 2004, Inter-Waste acquired a 20 percent shareholding in
Enviro-Fill.
1.4. On 10 December 1999 Ex-Waste (Pty) Limited ("Ex-Waste") was
founded to provide re-utilisation services in the main, a 50% owned
company of Inter-Waste. Prior to the group restructuring, Inter-Waste
held a 50% interest in Ex-Waste. Inter-Waste acquired the business of
Ex-Waste from Ex-Waste as a going concern with effect from 1 January
2007 in terms of the Ex-Waste Sale of Business Agreement detailed in
paragraph 28.2 of the detailed prospectus.
1.5. Interwaste Cleaning (Pty) Limited ("Interwaste Cleaning") was
established on 1 November 2002 to perform outsourced cleaning services
to its clients as an additional service offering.
1.6. Inter-Waste was the first waste management company to obtain ISO
14001 accreditation in respect of all its operations. This occurred in
2003.
1.7. In 2005 Inter-Waste established Earth 2 Earth (Pty) Limited
("Earth 2 Earth"), which is today the largest organic compost producer
in South Africa. The minority interest of Earth 2 Earth was acquired
by Inter-Waste for R1 023 000 with effect from 1 January 2007.
1.8. Inter-Waste now has national operations in the Western Cape,
Gauteng, Mpumalanga, KwaZulu-Natal and the North West. Enviro-Fill has
offices in South Africa, Namibia and Swaziland and operates in excess
of thirty waste management facilities, landfilling approximately 2.5
million tons of waste per annum through innovative processes.
1.9. Interwaste Holdings was incorporated as a private company in
Pretoria on 29 November 2006 with the name Mentor Trading and
Investment 66 (Pty) Limited. On 9 May 2007, Mentor Trading and
Investment 66 (Pty) Limited was converted to a public company and
changed its name to Interwaste Holdings Limited.
1.10. Interwaste Holdings acquired the entire issued share capital
of Inter-Waste and Enviro-Fill from the existing shareholders and Inter-
Waste with effect from 1 January 2007 in terms of the Inter-Waste Sale
Agreement, the 80% Enviro-Fill Sale Agreement and the 20% Enviro-Fill
Sale Agreement detailed in paragraph 28.1 of the detailed prospectus.
2. NATURE OF THE COMPANY`S BUSINESS AND INDUSTRY
2.1. Inter-Waste
2.1.1. Inter-Waste is a waste management company dedicated to
procuring that firm commitment, hard work and the utilisation of the
latest technologies will help ensure the viability of the planet for
future generations. Inter-Waste utilises a modern, specialised waste
management fleet to transport an estimated 2 000 tons of waste daily.
2.1.2. Inter-Waste has been a member of the Institute of Waste
Management of South Africa since 1993. The Institute is a leading
authority on integrated and professional waste management in South
Africa and is committed to sound waste management. Inter-Waste was the
first waste management company in Southern Africa to achieve ISO 14001
international accreditation in respect of all aspects of its
operational disciplines.
2.2. Enviro-Fill
2.2.1. Landfill is the most widely used waste disposal method, in
that approximately 80% of all waste streams are landfilled. Modern
solid waste landfills are subject to increased regulatory scrutiny and
as a result will be more protective of the environment in the future.
2.2.2. Enviro-Fill, a specialist landfill and waste facilities
management company that operates in excess of thirty waste management
facilities, landfills approximately 2.5 million tons of waste per annum
through innovative processes. Enviro-Fill is the only landfill
management company with an IS0 14001 accreditation.
2.3. Earth 2 Earth
Earth 2 Earth is a product manufacturing business in which waste
is converted into superior organic growing mediums.
3. PROSPECTS
In the opinion of the directors of the group, based on experience
and market information available:
3.1. Geographical expansion
3.1.1. Inter-Waste has the flexibility and foresight to adapt to
ever changing business markets. The KwaZulu-Natal market has been
identified as a growth area and Inter-Waste has recently acquired a
depot in Durban central.
3.1.2. The strategy of Enviro-Fill is to grow the business
aggressively in the existing and new geographic areas where landfills
exist or are developed. Enviro-Fill has a presence in Gauteng,
Freestate, Limpopo, Mpumalanga, North West, Western Cape, Swaziland and
Namibia. With a market potential of 750 landfill sites, Enviro-Fill
presently enjoys a 5% market share and therefore has significant scope
for future growth.
3.1.3. The group has bright prospects to grow organically in view of
the accelerated developments in the construction industry and also by
way of acquisitions due to the opportunities for consolidation in the
industry.
3.2. Product expansion, diversification and innovation
3.2.1. Inter-Waste is a business that creates participative teams
that develop solutions based on practices that are both cost effective
and environmentally sound. By developing a superior knowledge of
customers, processes and needs, Inter-Waste creates and delivers
innovative products and services that build sustainable working
relationships based on mutual trust and confidence. The broad scope of
these products and services enables customers to utilise Inter-Waste as
their "one-stop" waste management supplier.
3.2.2. One diversification success story that demonstrates this
approach is Earth 2 Earth, a subsidiary of Inter-Waste, established as
a product manufacturing business in which waste is converted into
superior organic growing mediums.
3.2.3. A further strategy of Enviro-Fill is to expand the activities
of the business, which includes converting waste to energy,
construction of landfill sites, waste materials recovery projects and
composting. Enviro-Fill is in the process of identifying suitable land
for the establishment of a G:L:B landfill facility which will improve
the profitability of the business in future years.
3.3. BEE
It is envisaged that as part of the listing process a suitable BEE
partner will be identified for Interwaste Holdings. Once
empowered the group will aggressively market its services to
municipalities, mining houses and construction industries, relying
also on South Africa`s expected economic growth in anticipation of
the 2010 FIFA World Cup.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
The summarised historical and forecast financial information of
Interwaste Holdings for the financial year ended 31 December 2006,
the financial years ending 31 December 2007 and 31 December 2008,
the preparation of which is the responsibility of the directors,
are set out below. This financial information must be read in
conjunction with the independent reporting accountants` report
thereon reproduced in Annexures 3, 5, and 6 of the detailed
prospectus.
4.1. Extracts from the historical and forecast income statements
4.2.
4.3.
Pro forma Forecast Forecast
31 December 31 December 31 December
2006 2007 2008
R`000 (2) R`000 R`000
Revenue 250 062 295 608 348 065
Gross profit 142 231 157 411 186 672
Other income 151 - -
Operating costs (75 422) (78 793) (93 868)
EBITDA 66 960 78 618 92 804
Depreciation (16 056) (22 122) (26 327)
Profit before 50 904 56 496 66 477
interest and taxation
Income from equity 158 - -
accounted investments
Net interest paid (6 249) (5 849) (3 577)
Profit before 44 813 50 647 62 900
taxation
Taxation (14 907) (13 876) (17 267)
Profit after taxation 29 906 36 771 45 633
Outside shareholders (814) (1 979) (2 313)
interest
Earnings attributable 29 092 34 792 43 320
to ordinary
shareholders
Reconciliation of
headline earnings:
Profit attributable 29 092 34 792 43 320
to ordinary
shareholders
Profit on disposal of - - -
non-current assets
Headline earnings 29 092 34 792 43 320
attributable to
ordinary shareholders
Pro forma weighted 254 579 551 294 537 907 336 979 551
average shares in
issue on which
earnings are based
(1)
Pro forma earnings 11.4 11.8 12.9
per share (cents)
Pro forma headline 11.4 11.8 12.9
earnings per share
(cents)
Notes:
(1) The pro forma weighted average number of shares in issue for
31 December 2006 is based on the sub-division and increase of the
ordinary shares in issue into 254 579 551 ordinary shares in issue on
the last practicable date as set out in paragraph 24.3 of the detailed
prospectus.
(2) The historical pro forma financial information for
31 December 2006 is an extract from the unaudited pro forma financial
information after the consolidation column as set out in Annexure 7 of
the detailed prospectus.
(3) The group incurred a once off non-recurring profit after taxation
of R7.3 million in 2006.
(4) The assumptions upon which the forecast income statements are
based are set out in paragraph 12.2 of the detailed prospectus.
(5) In accordance with IFRS 3: (AC 140) Business Combinations, the
Enviro-Fill results have been included from 1 January 2007 for purposes
of compiling the profit forecast for 31 December 2007.
5. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
5.1. Full names, ages, business addresses and functions of the board of
directors of Interwaste Holdings
Director Age Function Business address
Interwaste
Holdings
Ethan Gilbert 47 Non-executive Vunani House
Dube* Chairperson Freestone Park,
135 Patricia Road,
Sandown, Sandton,
2196
William Alan Hardy 39 Managing Corner of Avocet
Willcocks Director and Bromhof Roads,
Bromhof, Randburg,
2154
Cornelius Rudolph 46 Financial 121 EP Malan Road,
Venter Director Pamona, 1260
Bronwyn Lee-Ann 36 Director Corner of Avocet
Willcocks and Bromhof Roads,
Bromhof, Randburg,
2154
Leonardus 46 Director 121 EP Malan Road,
Christoffel Pamona, 1260
Grobbelaar
Stanislaus 56 Non-executive 12 Joubert Street,
Marthinus Director Rynfield, Benoni,
Jewaskiewitz* 1501
* Non-executive
All directors, other than Alan Willcocks who is British, are South
African citizens.
5.2. Company secretary and registered office are:
Genesis Chartered Accountants
Corner Avocet and Bromhof Roads
Bromhof, 2154
(PO Box 73503, Fairlands, 2030)
6. THE PLACEMENT
6.1. Salient features
6.1.1. The salient features of the private placement are as follows:
6.1.2.
6.1.3.
- Offer price per ordinary share 100
(cents)
- Par value per ordinary share 0.01
(cents)
- Premium per ordinary share 99.99
(cents)
- Number of ordinary shares 80 000 000
offered by the company for
subscription in terms of the private
placement
- Issue consideration to be R80 million
received by the company before
expenses
- Number of ordinary shares 40 000 000
offered for sale by the existing
shareholders in terms of the private
placement
- Total consideration to be R40 million
received by the existing
shareholders
6.1.4. The opening and closing dates of the private
placement are as follows:
- Opening date of the private Thursday, 7 June 2007
placement (09:00)
- Closing date of private Friday, 8 June 2007
placement (12:00)
- Proposed listing date on ALTx Thursday,
(09:00) 14 June 2007
Note:
These dates are subject to change at the discretion of the
company. Any changes will be released on SENS.
6.2. Interwaste Holdings holds irrevocable undertakings from various
selected investors to subscribe for 120 000 000 shares in terms of the
private placement, amounting to 100% of the private placement shares.
6.3. The private placement of 120 000 000 ordinary shares have been
fully allocated to the investors who have given irrevocable
undertakings as set out in paragraph 6.2 above.
6.4. The placement has not been underwritten and is not subject to a
minimum subscription, being achieved.
7. LISTING ON THE JSE
Subject to the required spread of public shareholders in terms of
the Listings Requirements being obtained pursuant to the private
placement, the JSE has approved the listing of 336 979 551 shares
on ALTx with effect from the commencement of business on Thursday,
14 June 2007. The shares will trade under the abbreviated name
"Intewaste" and the JSE code "IWE" and ISIN ZAE000097903.
8. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained, during
business hours, from Thursday, 7 June 2007, from the registered
offices of Interwaste Holdings, Exchange Sponsors (Pty) Limited
and the transfer secretaries, details of which are set out below:
- the registered office of the company - Corner Avocet and Bromhof
Roads, Bromhof, 2154
- the offices of Exchange Sponsors (Pty) Limited - 39 First Road,
Hyde Park, 2196;
- the offices of Computershare Investor Services 2004 (Pty) Limited
- Ground Floor, 70 Marshall Street, Johannesburg, 2001.
Johannesburg
7 June 2007
Designated Adviser
Exchange Sponsors (Pty) Limited
Auditors and reporting accountants
RSM Betty & Dickson (Johannesburg)
Attorneys
Fluxmans Inc.
Date: 07/06/2007 12:58:01 Produced by the JSE SENS Department.
