| Fri 26 Oct 2007, 16:55 | | BLU - Blue Label Telecoms Limited - Abridged pre-l |
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JSE
BLU
BLU - Blue Label Telecoms Limited - Abridged pre-listing statement
BLUE LABEL TELECOMS LIMITED
(Previously Friedshelf 776 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/07)
JSE Share code: BLU & ISIN: ZAE000109088
("Blue Label Telecoms" or "the Company")
Abridged Pre-Listing Statement
This abridged Pre-Listing Statement relates to:
(i) Offer for Subscription: a private placing to Qualifying Investors of a
maximum value of R1,000,000,000 of new Blue Label Telecoms Shares priced
between R5.75 and R6.75 per share in terms of an Offer for Subscription
("Offer for Subscription"). The Offer for Subscription includes a
preferential placement to selected Blue Label Group business associates and
selected individual investors in terms of which cash has been received for
Blue Label Telecoms Shares to the value of R200,000,000 and accordingly the
remaining Offer for Subscription will be for a maximum value of
R800,000,000;
(ii) Offer for Sale: a private placing to Qualifying Institutions of a maximum
value of R376,467,352 of Blue Label Telecoms Shares priced between R5.75
and R6.75 per share in terms of an Offer for Sale by certain Blue Label
Telecoms Shareholders ("Offer for Sale");
(Collectively i) and ii) represent "the Private Placing") and;
(iii) the subsequent listing of Blue Label Telecoms on the JSE Limited ("JSE").
Based on the Private Placing price range, the maximum number of Blue Label
Telecoms Shares available in terms of the Private Placing is 239,385,626
and the minimum number of Blue Label Telecoms Shares available is
203,921,089.
This abridged Pre-Listing Statement is not an invitation to the general
public to subscribe for Blue Label Telecoms Shares.
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 Blue Label Telecoms,
its operations, directors , and financial information, and is not
intended to be a full Pre- Listing Statement.
1. Introduction
Subject to obtaining a spread of shareholders acceptable to the JSE, the
JSE has formally approved the listing of a maximum of 800,000,000 Blue
Label Telecoms Shares, being ordinary shares with a par value of R0.000001
each. The shares are due to be listed in the "Telecommunications sector -
Mobile Telecommunications" of the main board of the JSE, under the
abbreviated name "BlueTel" code "BLU" and ISIN ZAE000109088. It is
anticipated that the listing will be effective from commencement of trade
on the JSE on Wednesday, 14 November 2007.
The proposed listing of the Blue Label Telecoms Shares on the JSE is
conditional upon the raising of a minimum amount of capital of
R700,000,000, before listing expenses, in terms of the Offer for
Subscription, and a minimum amount of capital of R200,000,000, before
listing expenses, in terms of the Offer for Sale. The minimum amount of
capital to be raised will first be satisfied from the Offer for
Subscription and the balance from the Offer for Sale.
2. Overview
Blue Label Telecoms, its subsidiaries, associates and joint ventures ("the
Blue Label Group") produces and distributes a wide variety of prepaid
secure electronic tokens of value and provides transactional services. The
Group`s prepaid products and service offerings include prepaid airtime,
prepaid electricity, third party bill payments, electronic funds transfer,
gift vouchers, loyalty programmes, stored value cards, location based
services and other prepaid tokens of value (both physical and virtual) that
are allied to the telecommunications, utilities, insurance, financial
services and transport industries.
The Blue Label Group is one of the leading distributors of prepaid airtime
in South Africa. The Group`s distribution channels extend to supplying the
foremost retailers and wholesalers, petroleum forecourts, independent
retailers and directly to end-users.
The success of the Blue Label Group within South Africa led to its
expansion offshore and the implementation of its business model in other
emerging market economies in both Africa and India.
The Blue Label Group`s extensive distribution network in South Africa
embraces over 100,000 points of sale to which prepaid products are supplied
on a daily, weekly or monthly basis, determined with reference to product
type, market demand and the geographic locality of the point of sale.
The Blue Label Group has five key focus areas:
Blue Label Group key focus areas:
Telecommunications Distribution of physical and
distribution virtual prepaid airtime of the
South African Mobile Network
Operators and Telkom, and
distribution of starter packs
in South Africa
International International distribution of
telecommunications physical and virtual prepaid
distribution airtime in India and Africa
Technology Technological innovation,
platforms development and support for
the operations of the Blue
Label Group
Call centers Outbound and inbound call
centers to service companies
within the Blue Label Group as
well as third parties and to
sell Blue Label Group and
third party products
Other related Other related services of the
services Blue Label Group, leveraging
off its existing products and
distribution network, as well
as the development of new
mobile services to take to
market
The Blue Label Group`s vision is to be a leading player in the secure
electronic transaction and electronic product vending and processing space
by being the provider of choice to end-consumers, corporates and
government.
The Blue Label Group intends to continue growing both organically and
acquisitively. As a publicly traded company, Blue Label Telecoms will be
better placed to aggressively expand its operations both locally and
internationally
The Blue Label Group will be restructured prior to the listing in terms of
which it will acquire the majority of the outside interests in the Blue
Label Group companies and in terms of which it will dispose of the non-core
assets held by the Blue Label Group which will not form part of the listing
("the Restructuring").
3. Rationale
The proposed listing on the JSE will enable the Company to:
- fund its current and future operations by having access to capital markets;
- enhance market awareness of Blue Label Telecoms;
- raise capital to settle parts of the purchase considerations for recent
acquisitions made as part of the Restructuring;
- recapitalise its balance sheet through the settlement of shareholder and
third party loans;
- attract and retain high quality people by affording Blue Label Telecoms
staff the opportunity to participate in the future growth of Blue Label
Telecoms;
- recapitalise the current working capital in the Blue Label Group;
- improve the Group`s buying power with trade partners through enhanced
credibility; and
- raise funding for the potential future expansion of the Blue Label Group.
4. Directors
The full names, addresses and functions of the directors are set out below:
Name Business address Occupation/ function
Laurence Michael Nestadt 21 West Street Chairperson
Houghton (Non-Executive) *
Brett Marlon Levy 75 Grayston Drive Joint Chief Executive
Sandton Officer
Mark Steven Levy 75 Grayston Drive Joint Chief Executive
Sandton Officer
Mark Vivian Pamensky 75 Grayston Drive Chief Operating
Sandton Officer
David Bryan Rivkind 75 Grayston Drive Chief Financial
Sandton Officer
Sidney Ellerine 51 West Street Director
Houghton (Non-Executive)
Gary David Harlow 6 Cowie Road Director
Forest Town (Non-Executive) *
Johannesburg
Reitumetse Jackie Huntley 1 Scott Street Director
Rutherford Estate (Non-Executive) *
1st Floor,
Building A
Unit A1, Waverley
Neil Norman Lazarus 55 Morsim Road, Director
Hyde Park (Non-Executive) *
Joe Mthimunye Ground Floor, Director
Block C (Non-Executive)
Grinaker LTA Park
204 Rivonia Road
Morningside
Herbert Cedrick Theledi Unit 103, 1st Director
floor (Non-Executive)
122 Pybus Road
Sandton
Lucy ("Pani") Mamage PIC Building Director
Tyalimpi Glenfield Office (Non-Executive) *
Park
Corner Oberon /
Glenwood Road
Faerie Glen
Pretoria
* Independent directors
The Board comprises 4 executive directors and 8 non-executive directors.
All non-executive directors have been appointed on a rotational basis, and
are obliged to retire and are eligible for re-election by Blue Label
Telecoms Shareholders at least once every three years in accordance with
the Articles of Association of Blue Label Telecoms. All the Directors are
citizens of South Africa.
5. Financials
The pro forma information set out below is intended to assist in the
assessment of the Company but is provided for illustrative purposes only.
The table below reflects:
- The unaudited pro forma profit history for the Blue Label Group for the
year ended 31 May 2007, adjusted for the Restructuring for the full year
from 1 June 2006 to 31 May 2007;
- the unaudited forecast consolidated income statement of the Blue Label
Group for the year ending 31 May 2008; assuming the Restructuring will be
implemented on 15 November 2007 and
- the unaudited pro forma forecast consolidated income statement for the year
ending 31 May 2008, assuming the Restructuring and listing were effective
from 1 June 2007.
The pro forma forecast has been prepared to show the impact of the
Restructuring and the Listing on the Blue Label Group forecast for the year
ending 31 May 2008 and on the basis the Private Placing occurred at mid
range price of R6.25. The accounting policies applied in preparing the pro
forma financial information are consistent with that applied by the Blue
Label Group.
This unaudited pro forma financial information is presented for
illustrative purposes only and because of its nature may not fairly reflect
the results of the Blue Label Group going forward. This information should
be read in conjunction with, and is qualified in its entirety by reference
to the financial statements and financial information from which it is
prepared and the related notes to the pro forma financial information as
set out in the Pre-Listing Statement. The pro forma financial information
is the responsibility of the directors.
Unaudited Unaudited Unaudited
pro forma forecast pro forma
Year ended Year ending forecast
31 May 2007 31 May 2008 Year ending
(R) (R) 31 May 2008
(R)
Revenue
9,018,907,940 10,932,271,991 11,105,521,752
Other income
45,675,210 34,943,212 33,825,747
Changes in inventories
of finished goods (8,540,516,503) (10,275,501,631) (10,403,297,563)
Employee compensation
and benefit expense (162,534,806) (272,751,047) (269,054,393)
Depreciation,
amortisation and
impairment charges (64,654,773) (52,258,256) (66,933,448)
Other expenses (103,060,451) (124,605,223) (126,582,457)
Operating profit 193,816,617 242,099,046 273,479,638
Finance costs -
funding (76,780,293) (68,383,063) (4,367,184)
Finance costs -
accounting standards
adjustment (58,384,327) (72,104,589) (72,104,589)
Finance income 94,280,970 165,794,843 172,950,352
Share of profit of
associates (8,495,380) 28,983 (3,570,114)
Net profit for year
before taxation 144,437,587 267,435,220 366,388,103
Taxation (55,512,097) (99,614,002) (115,950,040)
Net profit for the
year 88,925,490 167,821,218 250,438,063
Attributable to:
Equity holders of
parent 90,452,752 144,199,007 249,787,037
Minority interest
(1,527,262) 23,622,211 651,026
Core net profit for
the year 124,269,514 234,072,137 340,403,798
EPS (cents)
15.51 26.30 33.61
HEPS (cents) 15.51 26.30 33.61
45.81
Core EPS (cents) 21.31 42.68
Weighted average 548,372,858 743,127,787
number of shares 583,127,787
Full notes and assumptions of the pro forma income statement and the pro
forma profit forecast are set out in the Pre-Listing Statement.
6. Salient dates and times
The Private Placing opens at 09:00 on Monday, 29 October 2007 and is
expected to close at 12:00 on Thursday, 8 November 2007. Indications of
interest for the purposes of the Private Placement process referred to in
this announcement will be received up until 12:00 on Thursday, 8 November
2007.
Abridged Pre-Listing Statement Friday, 26 October 2007
published on SENS
Opening Date of the Private Monday, 29 October 2007
Placing (09:00)
Closing Date of the Private Thursday, 8 November 2007
Placing (12:00)
Proposed Listing Date on the JSE Wednesday, 14 November 2007
(08:30) ("the Listing Date")
* All references to time are to local time in South Africa.
7. Pre-Listing Statement
Copies of this Pre-Listing Statement may be obtained from the corporate
offices of Blue Label Telecoms, the sponsors or transfer secretaries, at
the addresses detailed below, from
Monday, 29 October 2007:
Blue Label Investec Bank Computershare
Telecoms Limited Investor Services
75 Grayston Drive Second Floor 2004 (Pty) Ltd
Morningside 100 Grayston Drive Ground Floor
Extension 05 Sandown 70 Marshall
Sandton Sandton Street
2196 2196 Johannesburg
2001
Johannesburg,
26 October 2007
Bookrunner, investment bank and sponsor
Investec Limited
Attorneys
ENS
Financial communications advisor
Brunswick
Joint financial advisor
Aloecap
Auditors and reporting accountants
PWC
Date: 26/10/2007 16:55:53 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
