| Mon 6 Aug 2007, 11:12 | | 1TM - 1time Holdings Limited - Abridged Prospectus |
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1TM
1TM - 1time Holdings Limited - Abridged Prospectus
This abridged prospectus is not an invitation to the public to subscribe
for shares in 1time, but is issued in compliance with the Listings
Requirements of the JSE Limited for information purposes only. The
information in this abridged prospectus has been extracted from a full
prospectus issued by 1time on 2 August 2007 ("the detailed prospectus"),
which is available as set out in paragraph 8. At the date of listing the
authorised share capital of 1time comprises 1 000 000 000 ordinary shares
with a par value of 0.01 cent each, of which, after a private placement of
1time ordinary shares by way of an offer by the company for the
subscription of 30 000 000 ordinary shares at an issue price of 100 cents
per ordinary share in the share capital of 1time thereby raising R30
million before expenses and an offer for sale of 30 000 000 ordinary shares
by the existing shareholders at a price of 100 cents per ordinary share
(together, "the private placement"), 210 000 000 shares will be in issue.
1time Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/017536/06)
(JSE code: 1TM ISIN: ZAE000102026)
("1time" or "the company")
ABRIDGED PROSPECTUS
Listing of 1time ordinary shares ("shares") on JSE Limited ("the JSE").
1. INCORPORATION AND HISTORY
1.1. Following 11 September 2001, the world aviation market was
cast in turmoil. Passenger volumes dropped and aircraft values collapsed.
This was the ideal environment for entrepreneurs to plan the formation of a
new aviation group.
1.2. Many domestic competitors acquired aircraft prior to 11
September 2001 when the value of the Rand was weak and aircraft prices were
high. Consequently, their cost structures remain high. The strengthening of
the rand created an opportunity to start a new airline with a low cost base
and a clean slate.
1.3. In August 2003, Glenn Orsmond, the then Financial Director
of Comair, teamed up with Rodney James, Gavin Harrison and Sven Petersen,
who owned an aircraft maintenance company, to launch a new airline.
1.4. Michael Kaminski, an IT entrepreneur, and Mogwele, a black
economic empowerment partner, were attracted as additional investors.
1.5. 1time Airline`s first flight took place on 26 February
2004 on the Johannesburg - Cape Town route.
2. NATURE OF THE COMPANY`S BUSINESS AND INDUSTRY
2.1 1time is a diversified aviation group with the following focus
areas: an airline, an aircraft maintenance business and charter business.
It intends launching an airfreight business within the next three years.
2.2 Income is derived from a mix of passenger ticket sales,
maintenance and charters, and ancillary revenue from car rentals,
accommodation, advertising, cargo and catering.
2.3 1time Airline is the second largest low-fare private airline in
South Africa (by domestic market share) after Comair. It offers tickets at
low prices but only renders services on selected routes where it can make a
profit. The marketing slogan of 1time Airline is: "more nice, less price".
This encapsulates its business philosophy of a more pleasant flying
experience for the customer at a lower price. 1time Airline has ten
aircraft and currently offers about 33 flights per day on eight domestic
routes. As far as 1time Airline is aware, it has the lowest cost per
available seat-kilometre on its chosen domestic routes in South Africa.
2.4 1time Airline`s major competitive advantages are as follows:
* it has a low cost structure resulting from the following:
- started with a clean slate with no historical overhead structure;
- low aircraft acquisition costs at the time of establishment
(2003);
- standardised fleet;
- maintenance operations are owned; and
- continued strengthening of the Rand since establishment has
minimised aircraft acquisition costs;
* the airline`s ancillary sources of revenue;
* easy to use internet-based booking system where passengers
only require their identity book for check in purposes;
* owner orientated management; and
* its experienced staff.
2.5 Aeronexus Technical, a wholly owned subsidiary of 1time, provides
a comprehensive maintenance service for 1time Airline`s fleet as well as
several other South African and African operators. Aeronexus Technical is
currently operating at full capacity with a two bay hanger facility at O.R.
Tambo International Airport. It has developed a market niche for its target
market with competitive pricing (in US dollars) and quality maintenance
work.
2.6 1time Charters, 1time`s wholly owned charter business, offers
charters to any destination in Africa and the Indian Ocean islands on
either a MD 82 (157 seater), or a DC-9 (110 seater). 1time Charters
currently cannot meet the demand from governments, international bodies and
corporate clients. It plans to create an arrival and departure facility
for the convenience of passengers at its premises at O.R. Tambo
International Airport.
2.7 Aeronexus Corporate manages and operates a B727 VIP jet on
behalf of the Djibouti Government. The jet is also chartered throughout the
world. The 727 has been luxuriously reconfigured to meet the needs of
guests. It transports heads of state, world leaders and high-powered
businessmen. Recently the 727 transported Bill Clinton on his African tour.
3. PROSPECTUS
3.1. The aviation industry is forecasted to transport
approximately 12,5 million domestic passengers in South Africa during 2007.
The domestic market has grown by approximately 14% per annum over the last
3 years whilst achieving a growth rate of 70% over the past 5 years.
3.2. The airline market in SA has historically grown at a
multiple of 2 times the growth in Gross Domestic Product. This is expected
to continue in the foreseeable future.
3.3. In addition, the market is poised to benefit strongly from
events, such as the 2010 FIFA World Cup, which are to be hosted in South
Africa.
3.4. Notwithstanding the significant growth achieved by low
fare airlines, it is estimated that less than 10% of South Africans travel
by air. This augurs well for the future growth of this market segment.
1time Airline expects a 20% increase in passenger numbers this year.
3.5. 1time intends growing by increasing its market share in
all four its focus areas, and by increasingly "feeding off itself".
3.6. 1time Airline`s marketing strategy will be to expand its
leisure market as well as to encourage the corporate market to make use of
its excellent value for money service.
3.7. 1time Airline will consider flying profitable routes into
Africa when these routes become available.
3.8. 1time intends to extract further value through ancillary
revenue opportunities such as advertising, car rentals, websites and
accommodation.
3.9. Aeronexus Technical plans to double its hanger facility to
four bays to satisfy current demand for technical maintenance from third
parties and from 1time Airline itself. Additional investment will also be
made in inventories, equipment, staff and training so as to further expand
the maintenance business.
3.10. The planned establishment of a Pratt & Whitney JT8D engine
maintenance facility will complement the current maintenance services as
this is the dominant engine type for aircraft maintained by Aeronexus
Technical. At present, only one other such engine maintenance facility
exists in Africa.
3.11. Currently, 1time Charters cannot meet the demand from
governments, international bodies and corporate clients for charters. It
plans to create an arrival and departure facility for the convenience of
passengers at its premises at O.R. Tambo International Airport.
3.12. 1time intends to launch an airfreight business within the
next three years.
3.13. Listing will lead to a higher profile in the corporate market
and better terms with bankers and fuel suppliers.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
4.1 The forecast financial information of 1time for the financial
year ending 31 December 2006 and for 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. The results must be read in
conjunction with the independent reporting accountants` report thereon
included in the detailed prospectus.
4.2 1time`s results for the second half of the year have
traditionally been stronger than the first half due to the seasonality of
1time Airline`s business, in particular, over the festive season.
4.3 Extracts from the historical and forecast income statements
4.3 Extracts from the historical and forecast income statements
Year ended 31 December Audited Forecast Forecast
2006 2007 2008
R`000 R`000 R`000
Gross revenue 491 390 621 219 714 262
Operating costs (462 808) (579 755) (663 052)
EBITDA 28 582 41 464 51 210
Depreciation (3 352) (3 000) (3 500)
Operating profit 25 230 38 464 47 710
Profit/(Loss) on foreign (397) - -
exchange
Discount on purchase 3 045 - -
Profit/(Loss) on disposal of 2 203 - -
non-current assets
Investment income 2 641 1 342 1 321
Interest paid (5 272) (4 572) (3 707)
Profit before taxation 27 450 35 234 45 324
Taxation (6 877) (10 218) (13 144)
Earnings attributable to 20 573 25 016 32 180
ordinary shareholders
Discount on purchase (3 045)
Profit/(loss) on disposal of (2 203) - -
non current assets
Headline earnings 15 325 25 016 32 180
attributable to ordinary
shareholders
Pro forma weighted average 180 000 191 260 210 000
shares in issue 000 274 000
Pro forma earnings per share 11.43 13.08 15.32
(cents)
Pro forma headline earnings 8.51 13.08 15.32
per share (cents)
Notes:
(1) The pro forma number of shares in issue for 31 December 2006
is based on the sub-division and increase of the ordinary shares in issue
into 180 000 000 ordinary shares in issue on the last practicable date as
set out in the prospectus.
(2) The assumptions upon which the forecast income statements
are based are set out in the detailed prospectus.
5. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
5.1 Full names, ages, business addresses and functions of the board of
directors of 1time:
Director Age Function Business address
S.M. Twala 50 Non-Executive Unit 12 Jan Smuts Park,
Chairman Jones Road, Jet Park,
Gauteng
G.W. 44 Chief Executive Unit D2, Isando Industrial
Orsmond Officer Park, Gewel Road, Isando,
1600
G.W. 48 Flight Unit D2, Isando Industrial
Harrison Operations Park, Gewel Road, Isando,
Director, CEO 1600
1time Charters
R.L. James 46 Marketing Unit D2, Isando Industrial
Director Park, Gewel Road, Isando,
1600
M.J. 35 Information Unit D2, Isando Industrial
Kaminski Technology Park, Gewel Road, Isando,
Director 1600
R.M. Loader 41 Alternative Non- Virginia Airport, Durban
Executive
S.J. 48 Aeronexus Unit D2, Isando Industrial
Petersen Corporate and Park, Gewel Road, Isando,
Technical Chief 1600
Executive
Officer
M. Snyman 26 Financial Unit D2, Isando Industrial
Director Park, Gewel Road, Isando,
1600
G. L. 45 Non-Executive Virginia Airport, Durban
Wishart
Note:
All the directors are South African
5.2 Company secretary and registered office are:
M. Snyman (CA)(SA)
Unit D2
Isando Industrial Park
Gewel Road
Isando, 1600
(PO Box 7110, Bonaero Park, 1622)
Telephone: (011) 928 8000
Facsimile: 086 680 4187
6 THE PLACEMENT
6.1 Salient features
6.1.1 The salient features of the private placement are as follows:
Offer price per ordinary share (cents) 100
Par value per ordinary share (cents) 0.01
Premium per ordinary share (cents) 99.99
Number of ordinary shares offered by 30 000 000
the company for subscription in terms
of the private placement
Issue consideration to be received by R30 million
the company before expenses
Number of ordinary shares offered for 30 000 000
sale by the existing shareholders in
terms of the private placement
Total consideration to be received by R30 million
the existing shareholders
6.1.2 The opening and closing dates of the private
placement are as follows:
Opening date of the private placement Monday, 6 August 2007
at 09:00 on
Closing date of private placement at Tuesday, 7 August 2007
12:00 on
Anticipated listing date on ALTx at Tuesday, 14 August
commencement of trade on 2007
Note:
These dates are subject to change at the discretion of the company. Any
changes will be released on SENS.
6.2 1time holds irrevocable undertakings from various selected investors to
subscribe for, or purchase, 60 000 000 shares in terms of the private
placement, amounting to 100% of the private placement shares.
6.3 The private placement of 60 000 000 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 210 million shares on ALTx with effect from
the commencement of business on Tuesday, 14 August 2007. The shares will
trade under the abbreviated name "1time" and the JSE code "1TM" and ISIN
ZAE000102026.
8. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained, during business
hours, from Monday, 6 August 2007, from the registered offices of 1time,
Exchange Sponsors (Pty) Limited and the transfer secretaries, details of
which are set out below:
- the registered office of the company - Unit D2, Isando Industrial Park,
Gewel Road, Isando, 1600;
- `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
6 August 2007
Designated Adviser
Exchange Sponsors (Pty) Limited
Auditors and reporting accountants
Nexia HBLT Chartered Accountants (East Rand) Inc
Joint Attorneys
Smith Tabata Buchanan Boyes Inc
Robert Mitchley Attorney
Date: 06/08/2007 11:12:01 Produced by the JSE SENS Department.
