| Thu 19 Jul 2007, 12:49 | | AFP - AF Pref - Abridged Pre-Listing Statement |
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JSE
AFP
AFP - AF Pref - Abridged Pre-Listing Statement
Alexander Forbes Preference Share Investments Limited
(Formerly Micawber 515 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/031561/06)
Share code: AFP & ISIN number: ZAE000098067
("AF Pref" or "the Company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to:
- a private placing by way of an offer for the subscription of a maximum of
55.6% of the number of qualifying Alexander Forbes shares held, of AF Pref
linked units comprising of AF Pref Preference Shares and AF Pref Debentures
at a subscription price of R18.72 per AF Pref linked unit;
- the subsequent listing of the AF Pref linked units on the JSE Limited
("JSE").
This abridged pre-listing statement is not an invitation to the general
public to subscribe for AF Pref linked units ("linked units"). The private
placing is offered to certain Alexander Forbes ordinary shareholders only.
The purpose of this abridged pre-listing statement is to provide parties
participating in the private placing and members of the investment
community with information relating to AF Pref, its directors and financial
information.
1 Introduction and rationale
Cleansheet Investments will acquire Alexander Forbes Limited by way of a
scheme of arrangement in terms of section 311 of the Companies Act, 1973
("the Scheme"). As part of the Scheme, Cleansheet Investments is offering
qualifying scheme participants the opportunity to re-invest in Richtrau No
131 (Proprietary) Limited ("EquityCo"), the new holding company of the
entire Alexander Forbes business.
The re-investment election is structured through a newly incorporated
special purpose vehicle, namely AF Pref. AF Pref will hold 26.5% of the
EquityCo ordinary shares and 28.6% of the EquityCo preference shares as
well as 100% of the PIK debentures issued by Richtrau No 132 (Proprietary)
Limited ("PIKCo"). PIKCo is a subsidiary of EquityCo specifically formed
as part of the financing arrangements of EquityCo. The total equity
investment of AF Pref in EquityCo is R1 122 million and the total PIK
debenture investment by AF Pref in PIKCo is R750 million.
AF Pref will issue two instruments, namely:
- AF Pref Preference Shares, which will give the holder see-through economic
and voting rights into the pro-rata underlying investment by AF Pref in the
equity of EquityCo; and
- AF Pref Debentures, which will give the holder see-through economic rights
into the pro-rata underlying investment by AF Pref in the PIKCo debentures
The JSE has approved the listing of 100,000,000 AF Pref linked units
comprising of AF Pref Preference Shares and AF Pref Debentures, with effect
from the commencement of business on 26 July 2007, in the `Investment
Products` sector of the JSE lists under the abbreviated name `Afprefinv`.
The purpose of listing AF Pref linked units is to afford eligible Alexander
Forbes shareholders the opportunity to retain indirect exposure to
Alexander Forbes after the implementation of the Scheme via a listed
instrument.
The subsequent listing will also:
- enhance investors` awareness of AF Pref;
- facilitate direct investment in AF Pref; and
- provide investors with a market for trading the linked units.
2 Overview of AF Pref
AF Pref was incorporated for the purpose of holding EquityCo ordinary
shares, EquityCo "A" preference shares and PIK debentures for the purposes
of the re-investment election.
It has no trading history and will not conduct any other business
activities. Its memorandum and articles of association have been framed
accordingly. Accordingly, AF Pref will not incur any liabilities or
obligations that are not either necessary in order for it to operate and/or
covered by an indemnity from EquityCo.
AF Pref`s ordinary shares will be 100% owned by The AF Management Trust, an
independent trust with independent trustees. The AF Management Trust will
be empowered to appoint the board of directors of AF Pref, which will
fulfil a mainly administrative role in AF Pref. Most of AF Pref`s costs
will be borne by EquityCo.
In order to facilitate acquisition of equity in EquityCo by the BEE
partners and management, AF Pref and the Actis led consortium will provide
interim funding to the BEE partners and management ("BEE and management
underwrite") to allow them to subscribe for ordinary and preference shares
in EquityCo. Accordingly, AF Pref will provide its pro rata share of the
BEE and management underwrite.
In addition, AF Pref will advance the PIK bridging loan to PIKCo on or
about the operative date to fund R750 million of the consideration payable
under the Scheme and will, subject to receipt of R750 million from Rand
Merchant Bank, on reorganisation date, subscribe for PIK debentures in
PIKCo to fund the reorganisation. The PIK bridging loan will be repaid by
PIKCo on the reorganisation date.
3 Prospects of the Company
AF Pref will not undertake any additional business activities outside of
holding EquityCo shares, PIK Debentures and the BEE and management
underwrite nor will it make any other investments. AF Pref`s prospects
will therefore be wholly dependent on the performance of EquityCo. AF Pref
will also provide a pro rata proportion of the R160 million standby
facility to EquityCo.
The EquityCo structure will be highly leveraged with a significantly higher
risk profile than traditional publicly listed companies. As such,
shareholders and prospective shareholders of AF Pref and EquityCo should
carefully consider this investment opportunity after reviewing the pre-
listing statement in its entirety, considering all aspects of the Scheme
and should seek their own independent investment advice.
It is important for prospective AF Pref preference shareholders to be
awarethat the nature of EquityCo is such that:
- the capital structure of EquityCo and its subsidiaries will contain a
significant level of gearing;
- EquityCo will not have the same cash flow characteristics as Alexander
Forbes; and
- EquityCo will not pay dividends in the foreseeable future as a result
of the high level of gearing referred to above.
4 Directors
The names, ages, business addresses, qualifications, occupations,
nationalities and brief curricula vitae of the Directors are set out below:
Non-executive Directors
Director Business Abbreviated curriculum vitae
address
John Richard 6th Floor John Doidge is the managing
Parker Mariendahl director of Sentinel Corporate
Doidge (58) House Newlands Fiduciary services and is a 58
(Director on Main years old graduate of the
and company Main Road, University of Cape Town. He is
secretary) Newlands an attorney with a small
South Cape Town practice in Cape Town and he is
African 7000 a director of many companies.
(PO Box 44774, John is the founder and deputy
Claremont, chairman of the South African
7735) Securitisation Forum and is an
honourary life member of the
Association of Trust Companies
of South Africa. John is a
trustee and the founding
Chairman of the Asbestos Relief
Trust.
John has been specialising in
trusts since 1979 and has
extensive trust experience. His
main focus these days is on
matters relating to the
securitisation industry. His
company provides securitisation
trustee services to all of the
major banks in South Africa.
Apart from practising law, John
held various senior positions in
the Nedcor Group for some 19
years. John has a B.Proc and is
a practicing attorney and the
director of various companies.
Sean Gaskell 6th Floor Sean Gaskell has been holding
(32) Mariendahl directorships and acting as
(Director) House Newlands specialist trustee for 8 years
South on Main and is a director at Sentinel
African Main Road, International Advisory Services
Newlands (Pty) Ltd consulting in
Cape Town professional trusteeship and
7000 taxation. Sean has a B.Bus.Sci
(PO Box 44774, honours degree in Finance from
Claremont, the University of Cape Town and
7735) is the director of various
companies.
There are no executive directors of AF Pref
5 Share Capital
The authorised and issued share capital of AF Pref, before and after the
private placing, is set out below:
Rand
Authorised share capital of AF Pref before and
after the private placing
1,000 ordinary shares of par value R1.00 each 1,000
500,000,000 redeemable participating preference
shares of par value R0.000001 each 500
Issued share capital of AF Pref before the
private placing
1,000 ordinary shares of R1.00 each 1,000
Issued share capital of AF Pref after the
private placing
1,000 ordinary shares of R1.00 each 1,000
A maximum of 100,000,000 preference shares of
par value R0.000001 each 100
A maximum of 100,000,000 debentures issued at
R7.50 each 750,000,000
Share premium 1,121,999,000
* Calculated using an issue price of R18.72, being the the subscription
price per AF Pref linked unit.
The AF Pref Preference Shares will rank prior to the ordinary shares and
any other class of shares in the share capital of AF Pref not ranking prior
to or pari passu with the AF Pref Preference Shares, in all respects. The
entire issued preference share capital of AF Pref will be listed on the
JSE. The securities will be issued in dematerialised form.
6 Copies of the pre-listing statement
Copies of the pre-listing statement are available in English from the
registered office of AF Pref and the offices of Rand Merchant Bank, a
division of FirstRand Bank Limited and Alexander Forbes Limited during
normal business hours.
The registered office of AF Pref:
Sentinel Corporate Fiduciary Services (Proprietary) Limited
6th Floor Mariendahl House Newlands on Main
Main Road, Newlands
Cape Town
7000
South Africa
(PO Box 44774, Claremont, 7735)
The office of Rand Merchant Bank:
1 Merchant Place
Fredman Drive
Sandton, 2196
South Africa
(PO Box 786273, Sandton, 2146)
The office of Alexander Forbes Limited:
Alexander Forbes Place
61 Katherine Street,
Sandton, 2196
South Africa
(PO Box 787240, Sandton, 2146)
Sandton
10 July 2007
Merchant bank, underwriter and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Reporting accountants
PRICEWATERHOUSECOOPERS INC.
Lead attorneys to Cleansheet Investments and AF Pref
DENEYS REITZ
Attorneys to the underwriter
WERKSMANS
Attorneys
READ HOPE PHILLIPS
Transaction proposer
CLEANSHEET INVESTMENTS
Transactional sponsor
KPMG Services (Pty) Ltd
Date: 19/07/2007 12:49:01 Produced by the JSE SENS Department.
