| Fri 22 Jun 2007, 17:43 | | WTL - William Tell - Private placing and listing o |
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JSE
WTHL
WTL - William Tell - Private placing and listing on the Alternative Exchange of
the JSE Limited
WILLIAM TELL
(formerly Vicva 148 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2004/030045/06)
Share code: WTL ISIN: ZAE000098133
("William Tell" or "the company")
PRIVATE PLACING AND LISTING OF WILLIAM TELL
ON THE ALTERNATIVE EXCHANGE OF THE JSE LIMITED
1. INTRODUCTION AND HISTORY
1.1 PSG Capital (Pty) Limited ("PSG Capital") has been authorised to announce
that, subject to the achievement of the required spread of public
shareholders, the JSE has formally approved the listing of 125 000 000
ordinary shares, with a par value of 1 cent each, in the share capital of
William Tell on the Alternative Exchange ("ALTX") of the JSE from the
commencement of trade on Tuesday, 3 July 2007. The shares will trade under the
abbreviated name "Willtell", with share code "WTL" and ISIN ZAE000098133.
1.2 An amount of up to R112,5 million before expenses will be raised by
William Tell in terms of an offer for subscription of 25 000 000 William Tell
shares at a subscription price of between 400 cents and 450 cents per share
("the offer for subscription") and an amount of up to R18 million will be
realised by William Tell vendors in terms of an offer for sale of 4 000 000
William Tell shares at a sale price of between 400 cents and 450 cents per share
("the offer for sale") (collectively "the private placing"). Further details
relating to the private placing are contained in paragraph 9 below.
1.3 William Tell Joinery was started in 1980 as a sole proprietorship
manufacturing custom built home furniture and general joinery. Over the past 27
years the business has grown organically from an initial capital base of R900
out of a 36m2 garage workshop, to a net asset value of R62,5 million at 31
December 2006, owning 7,3 ha of industrial premises and evolving from a custom
made furniture producer to a junior competitor within the WBP (wood- based
panels) industry, a producer of and value adder to chipboard, supplying products
to a wide range of businesses in Southern Africa.
1.4 William Tell was incorporated in South Africa under the name "Vicva 148
(Proprietary) Limited" on 15 October 2004. The company changed its name to
"William Tell Holdings (Proprietary) Limited" on 16 May 2007 and converted to a
public company under registration number 2004/030045/06 on 18 June 2007.
2. OVERVIEW OF WILLIAM TELL
2.1 William Tell is a focused manufacturer of WBP. The group produces
chipboard from wood waste, adds value by applying melamine surfaces and further
adds value by producing systems and components for the broader building and
related industries. Products are marketed under the Evopan and William Tell
brand names.
2.2 The client base ranges from individual contractors to large businesses
in the built-in furniture, office furniture, shop-fitting, exhibition, case
goods, wholesale, merchandising, retailing and related industries in Southern
Africa.
2.3 The business of William Tell is transacted through the following
subsidiaries:
2.3.1 William Tell Industries (Proprietary) Limited ("William Tell
Industries")
William Tell Industries produces WBP under the brand name Evopan, by converting
wood waste into chipboard. The company adds value by applying decorative
melamine surfaces and veneers for supply to wholesalers, retailers and larger
manufacturers of furniture systems and further adds value under the brand name
William Tell, by converting these products into furniture systems, cabinets,
cabinet doors, specialised components and work surfaces for the built-in
furniture, office furniture, case good furniture, cabinet making, shop-fitting
and related industries.
2.3.2 William Tell Board (Proprietary) Limited ("William Tell Board")
William Tell Board is a newly incorporated company which is in the process of
building William Tell group`s second WBP plant on a 5,4 ha site in Chamdor on
the West Rand. The new WBP plant will produce chipboard for William Tell
Industries (50% of which capacity will be geared towards satisfying the
shortfall of William Tell Industries` requirements) and for additional value
added board products.
2.3.3 Tellprop (Proprietary) Limited ("Tellprop")
Tellprop owns the two industrial sites from which William Tell Industries and
William Tell Board operate (comprising 7,3 ha industrial land and 40 000 m2
industrial floor space).
3. PROSPECTS
3.1 William Tell is a focused manufacturer of WBP with a clearly defined
vision and goals. The increased capacity expansion in progress, with the
addition of further processes at the second WBP factory for own consumption and
on-sale, are designed to attain a high level of self sufficiency, broadening the
product base and markets to ensure sustainable growth and enhanced
profitability.
3.2 According to own analysis and industry shared information, the South
African WBP industry is expected to continue to enjoy robust growth until after
2010. William Tell`s position as a 2,2% participant in the WBP industry,
dominated by two large corporate groups, and with the equivalent of 29% of
market demand currently being imported, provides exciting scope for growth to
the group. William Tell predicts that it will be responsible for 5,1% of South
African WBP production by 2010.
3.3 The high growth in demand for MFB has been forecast, according to own
analysis and industry shared information, to grow from 35% in 2007 of the total
WBP demand to 40% in 2012. William Tell entered the MFB market in 2003 and
forecasts to grow market share from 6,9% in 2007 to 8,6% in 2010 and 9,2% in
2012 by utilising existing MFB capacity.
3.4 William Tell`s technical team has gained immeasurable experience and
skills by successfully relocating its first particle board plant from Beirut,
Lebanon to Johannesburg, South Africa. The war-damaged plant was completely
refurbished and modernised by updating the complete electrical control to the
latest Siemens S7 system. William Tell is able to introduce capacity at a third
of the cost of new turnkey projects, making it competitive against modern,
higher capacity plants.
3.5 Strong market growth is driven by activity in the building and
construction industry, which consequently increases demand for furniture and
case goods and increases activity in the refurbishment of residential
properties. William Tell aims to extract significant benefit out of these
increases.
4. MAJOR AND CONTROLLING SHAREHOLDERS AND SHAREHOLDER SPREAD
4.1 Save for directors` interests, no shareholder will, as far as the
directors of William Tell are aware, directly or indirectly, beneficially hold
5% or more of the issued share capital of William Tell.
4.2 Following the private placing, William Tell`s controlling shareholder
(as defined by JSE Listings Requirements) will remain B P Lok by virtue of his
44% direct shareholding in the company and his 16% indirect beneficial
shareholding in the company, by virtue of his being a trustee of The William
Tell Family Trust.
5. DIRECTORS
5.1 The full names, ages, business address and occupations of the directors
of William Tell are set out below:
Full name Age Occupation Business Address
Sidney Quinten Coetzee 47 Executive Director 11/23 Andrea Road
Reuven Estates
Booysens 2091
Neville Marc de Winnaar 33 Executive Director 11/23 Andrea Road
Reuven Estates
Booysens 2091
Barry Philip Lok 49 Chief Executive 11/23 Andrea Road
Reuven Estates
Booysens 2091
Warwick Hilton Lok 58 Managing Director 11/23 Andrea Road
Reuven Estates
Booysens 2091
Michael Gavin Meehan 60 Non-executive Director Suite 9 Tinsley
House 225 Musgrave
Road Durban 4001
Full name Age Occupation Business Address
Annamarie van der Merwe 43 Non-executive Director 1140 Plovers Nest
Featherbrook
Estate
Ruimsig 1746
Andre Pierre Wagenaar 62 Non-executive Director 2 Spitskop Street
and Chairman Noordheuwel Ext 6
Krugersdorp 1739
Russell Edward Watt 32 Financial Director 11/23 Andrea Road
Reuven Estates
Booysens 2091
5.2 All directors are South African citizens.
5.3 The directors of William Tell:
- have considered all statements of fact and opinion in the prospectus;
- accept, collectively and individually, full responsibility for the
accuracy of such statements; and
- certify that, to the best of their knowledge and belief, there are no
omissions of facts or considerations which would make any statements of fact or
opinion contained in this prospectus false or misleading and that all
reasonable enquiries to ascertain such facts have been made and that this
prospectus contains all information required by law and the JSE Listings
Requirements.
6. SHARE CAPITAL AND DIVIDENDS
6.1 Authorised and issued share capital
6.1.1 The authorised and issued share capital of William Tell is set out
below:
Number of shares Share capital
Authorised
Ordinary shares with a par value of
1 cent per share 250 000 000 R2 500 000
Issued, before the private placing
Ordinary shares with a par value of
1 cent per share 100 000 000 R1 000 000
Issued, after the private placing
Ordinary shares with a par value of
1 cent per share 125 000 000 R1 250 000
6.1.2 The share premium of William Tell on listing will be R185 956 524,
assuming an offer price of 450 cents per share pursuant to the private placing
being achieved.
6.2 Dividends
6.2.1 William Tell`s dividend policy, in the absence of unforeseen
circumstances, is to declare a dividend, based on a dividend cover of 3
times,payable bi-annually for each six-month period ending 30 June and 31
December and payable to shareholders in October and April, respectively, of each
year. The first dividend payable to shareholders of William Tell after the
listing of the company will be the dividend payable in respect of the six-month
period ending 31 December 2007, payable in April 2008.
6.2.2 It is the intention of the company to periodically consider this
dividend policy and to take account of prevailing circumstances and future cash
requirements in determining whether it would be appropriate to pay a dividend in
respect of a particular financial reporting period.
7. THE RESTRUCTURING AND PRELISTING AGREEMENT
In preparation for the listing of William Tell:
7.1 William Tell entered into sale of shares agreements in terms whereof it
acquired 100% of the issued shares in William Tell Industries, William Tell
Board and Tellprop from the shareholders of those companies with effect from 4
June 2007 ("the restructuring"); and
7.2 certain shareholders and non-executive directors of William Tell, prior
to the listing, entered into a prelisting agreement on 13 June 2007, in terms of
which:
7.2.1 such shareholders and non-executive directors have pre-emptive
rights in respect of any William Tell shares any of them may wish to dispose at
any time after the date of listing;
7.2.2 such shareholders may not dispose of their William Tell shares in excess
of:
- 20% during the first year after listing;
- a further 20% during the second year after listing;
- a further 20% during the third year after listing;
- a further 20% during the fourth year after listing;
- a further 20% during the fifth year after listing,
which restrictions are in addition to the Listings Requirements applicable to
ALTX listings regarding the restriction on sales of shares by directors of a
listed company;
7.2.3 such non-executive directors may not dispose of their William Tell
shares in excess of:
- 50% during the first year after listing;
- a further 50% during the second year after listing; and
7.2.4 such shareholders are from the date of leaving the employ of the company
restrained for 3 years and within South Africa from competing against William
Tell in respect of certain specified activities, from employing any person who
is employed by William Tell and from using any confidential information relating
to the business and affairs of William Tell.
8. EXTRACTS OF HISTORICAL, PRO FORMA AND FORECAST FINANCIAL INFORMATION
8.1 Forecast financial information
Set out below is an extract from the forecast income statements for the
financial years ending 30 June 2007, 30 June 2008 and 30 June 2009, the
preparation of which is the responsibility of the directors.
Reviewed Forecast
6 months year
31 December 30 June
2006 2007
R`000 R`000
Revenue 85 832 174 604
Gross profit 31 411 67 020
Operating profit 20 542 45 559
Profit before taxation 19 826 42 503
Attributable profit 12 872 29 057
Number of shares in issue (`000) 1 100 000 000 (1)
Earnings per share (cents) 29,1 (1)
Headline earnings per share
(cents) 28,9 (1)
Earnings yield at 450 cents per
share issue price (%) 6,5 (1)
Dividend yield at 450 cents per
share issue price (%)(2) 2,2
Price: Earnings ratio at 450 cents
per share issue price (times) 15,5 (1)
Forecast Forecast
year year
30 June 30 June
2008 2009
R`000 R`000
Revenue 200 301 283 235
Gross profit 85 372 117 811
Operating profit 61 234 85 296
Profit before taxation 65 302 84 732
Attributable profit 45 066 58 419
Number of shares in issue (`000) 125 000 000 125 000 000
Earnings per share (cents) 36,1 46,7
Headline earnings per share
(cents) 36,1 46,7
Earnings yield at 450 cents per
share issue price (%) 8,0 10,4
Dividend yield at 450 cents per
share issue price (%)(2) 2,4 3,2
Price: Earnings ratio at 450 cents
per share issue price (times) 12,5 9,6
Notes:
(1) Based on the assumption that the restructuring and private placing had
been effective for the full financial year ending 30 June 2008 (i.e. that the
subsidiaries were wholly-owned by William Tell for such financial year) and that
the offer for subscription has been fully subscribed at the higher price in the
range (namely 450 cents per share).
Assuming the offer for subscription has been fully subscribed at the lower
price in the range (namely 400 cents per share), the forecast for the year
ending 30 June 2008 would be as follows:
R`0000
Operating profit 61 234
Interest received 9 262
Interest paid (6 093)
Profit before taxation 64 403
Taxation (19 975)
Attributable profit 44 428
Earnings per share (cents) 35.54
Headline earnings per share (cents) 35.54
Earnings yield at 400 cents per share issue price (%) 8.89
Dividend yield at 400 cents per share issue price (%) 2.68
Price:Earnings ratio at 400 cents per share issue price (times) 11.25
(2) The forecast for the financial year ending 30 June 2007 includes the
aggregated results of the William Tell group and will not be comparable to
numbers that will appear in audited annual financial statements as such audited
annual financial statements will only contain the results of William Tell
Industries and Tellprop for the month of June 2007 as the restructuring was
effective from 4 June 2007, and it is only from that date that the results of
William Tell Industries and Tellprop may be consolidated with those of the new
holding company, William Tell. However, aggregated results for the full year
ending 30 June 2007 will be published at the same time.
(3) Inter-company transactions have been accounted for in the aggregated
financial information.
8.2 Interim and pro forma financial information
Set out below is an extract from the historic interim balance sheet of William
Tell as at 31 December 2006 (being William Tell`s interim financial reporting
date), based on the assumption that the restructuring and the private placing
were effected on 31 December 2006, the preparation of which is the
responsibility of the directors.
Reviewed Pro forma
Adjustments
After
The the private
restructuring restructuring
31 December 31 December 31 December
2006 2006 2006
R`000 R`000 R`000
ASSETS
Non-current assets - 99 072 99 072
Current assets - 51 777 51 777
Total assets - 150 849 150 849
EQUITY AND
LIABILITIES
Capital and reserves - 62 476 62 476
Non-current liabilities - 44 517 44 517
Current liabilities - 43 856 43 856
Total equity and
liabilities - 150 849 150 849
Shares in issue 1 99 999 900(2) 100 000 000
Net asset value per
share (cents) 62,48
Net tangible asset value
per share (cents) 62,41
Pro forma
Adjustments After
The
restructuring
The private and private
placing placing
31 December 31 December
2006 2006
R`000 R`000
ASSETS
Non-current assets - 99 072
Current assets 108 241(1) 160 018
Total assets 108 241 259 090
EQUITY AND
LIABILITIES
Capital and reserves 108 241(1) 170 717
Non-current liabilities - 44 517
Current liabilities - 43 856
Total equity and
liabilities 108 241 259 090
Shares in issue 25 000 000 125 000 000
Net asset value per
share (cents) 136.57(1)
Net tangible asset value
per share (cents) 136.52
Notes:
(1) Assuming the offer for subscription has been fully subscribed at the
higher price in the range (namely 450 cents per share), thereby raising R112,5
million for William Tell. Estimated costs of R4,26 million have been written-
off against share premium to the extent permissible by the Companies Act.
Assuming the offer for subscription has been fully subscribed at the lower
price in the range (namely 400 cents per share), cash and cash equivalents
would increase by R96 351 000 to R113 123 144 and share premium by R96 101 000
to R157 577 476, resulting in a NAV of 127,06 cps.
(2) The issued share capital of the company was restructured as set in
paragraph 4.2.2 of the prospectus.
9. THE PRIVATE PLACING
Salient features of the private placing
9.1 The private placing is made up of an offer for subscription by William
Tell and an offer for sale by W H Lok, who is selling 3 000 000 shares and N M
de Winnaar, who is selling 1 000 000 shares (collectively 4 000 000 William Tell
Shares) at a subscription/sale price of between 400 and 450 cents per share.
9.2 The salient features of the private placing are as follows:
- Offer price per share (cents) between 400 cents and
450 cents per share
- Number of ordinary shares offered in terms of the
offer for subscription 25 000 000
- Number of ordinary shares offered in terms of the
offer for sale 4 000 000
- Issue consideration up to R112,5 million
- Sale consideration up to R18 million
- Opening date of the private placing at 09:00 on Monday, 25 June 2007
- Closing date of the private placing at 12:00 on Thursday, 28 June 2007
- Private placing monies paid by Thursday, 28 June 2007
- Results of the private placing and the offer
price announced on SENS on Monday, 2 July 2007
- Results of the private placing and the offer
price published in the press on Tuesday, 3 July 2007
9.3 The main purpose of the private placing is to raise capital for the
expansion of William Tell`s WBP production and distribution capacity and
vertical integration strategy. The proceeds of the private placing will also be
applied in establishing a base from which to take timeous advantage of
significant and appropriate growth opportunities that occur in the industry.
9.4 The listing will provide a platform to enable:
- existing shareholders to enjoy continued benefits;
- entrepreneurial management to gain ownership, thereby ensuring
management succession; and
- William Tell to outlive the tenure of the founders and current
shareholders.
9.5 No offer will be made to the public in respect of the private placing.
10. COPIES OF THE PROSPECTUS
10.1 This abridged prospectus is a summary of the full prospectus and has
been prepared and issued in relation to the private placing and the listing of
William Tell on ALTX. It contains the salient features of the prospectus dated
25 June 2007, which should be read in its entirety for a full appreciation
thereof.
10.2 Copies of the full prospectus, in English, may be obtained during office
hours at the following addresses:
10.2.1 the registered office of the company: 11 Andrea Road, Reuven
Estates, Booysens 2016; and
10.2.2 the office of the bookrunner, designated and corporate adviser of
William Tell, PSG Capital: Building 8, Woodmead Estate, 1 Woodmead Drive,
Woodmead 2198.
Johannesburg
25 June 2007
Bookrunner, Designated and Corporate Adviser
PSG CAPITAL
Auditors and Reporting Accountants
BDO
BDO Spencer Steward (JHB) Inc
Chartered Accountants (SA)
Registered Accountants and Auditors
Attorneys
Deneys Reitz Attorneys
Deneys Reitz Inc.
1984/003385/21
Date: 22/06/2007 17:43:01 Produced by the JSE SENS Department.
