| Fri 23 Nov 2007, 10:36 | | FWD - Freeworld Coatings Limited - Abridged pre-li |
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JSE
FWD
FWD - Freeworld Coatings Limited - Abridged pre-listing statement
Freeworld Coatings Limited
(formerly Aletris Investment Holdings No. 1 Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 2007/021624/06)
Share code: FWD & ISIN: ZAE000109450
("Freeworld Coatings" or "the Company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to the listing of Freeworld Coatings
on the JSE Limited ("JSE") with effect from the commencement of business on 3
December 2007. This abridged pre-listing statement is not an invitation to
the public to subscribe for shares in Freeworld Coatings, but is issued in
compliance with the Listings Requirements of the JSE for the purpose of
providing information to the public with regard to Freeworld Coatings.
1. Introduction
All conditions precedent to the listing of the entire issued ordinary share
capital of Freeworld Coatings on the JSE have now been fulfilled. The listing
will be followed immediately by the unbundling of Barloworld Limited`s
("BAW") entire shareholding in Freeworld Coatings.
Accordingly, approximately 204 000 000 Freeworld Coatings ordinary shares of
1 cent each will be listed in the Special Chemicals sub-sector of the
"Chemicals" sector of the JSE lists under the short name "Freeworld" and
share code "FWD", with effect from the commencement of business on 3 December
2007 and Barloworld shareholders who are recorded on the register on 7
December 2007 will receive one Freeworld Coatings share for each BAW share
held on such date.
2. Overview of the business of Freeworld Coatings
Freeworld Coatings is a leader in the manufacture and marketing of
decorative, automotive and industrial coatings in all Southern African
territories. The Company is capable of providing full systems solutions and
approaches across sectors ranging from architectural coatings to performance
coatings and related products. Freeworld Coatings has principal factories in
Durban, Port Elizabeth, Cape Town and Johannesburg, Botswana, Malawi,
Namibia, Swaziland and Zambia. Products are marketed and sold throughout
these countries and other sub-Saharan African countries. The Company is also
present in China and Australia and exports to a number of countries.
Internationally, Freeworld Coatings is regarded as a world-class player and
is currently the 31st largest coatings company in the world. Freeworld
Coatings is well-positioned in terms of experience, product offering and
access to leading edge technology to further grow and successfully expand its
presence in chosen markets and geographical locations.
Market and brand leadership
Freeworld Coatings is a leading marketer of decorative, and automotive and
industrial coatings in South Africa and throughout the Southern African
region, supplying approximately 30% and 27% of the requirements of those
markets, respectively.
Freeworld Coatings` products are regarded as iconic brands within the markets
they serve, with a strong reputation for quality, and attract a loyal
customer base. Freeworld Coatings supplies brands including Plascon, Plascon
Professional, Crown, Polycell, Midas and Earthcote to consumers and
commercial enterprises.
The Midas and Earthcote brands are marketed and sold through a growing number
of franchise stores, currently there are 54 throughout South Africa with a
further five located in Mauritius, Edinburgh, Antwerp, Amsterdam and
Windhoek.
Within the industrial and furniture markets in Southern Africa the Company is
well-known as a supplier of specialised coatings under the Plascon, Maeder
and International brands.
In the automotive industry, Freeworld Coatings supplies both vehicle
manufacturers and the refinish industries in Southern Africa with products
under the Plascon, Spies Hecker, Standox and DuPont brands.
In addition, through International Chemical Corporation (Proprietary) Limited
(ICC), Freeworld Coatings produces and supplies colourant systems throughout
South Africa and exports to an increasing number of countries.
Complementary products, which include a wide range of paint brushes and
rollers, are marketed to commercial enterprises and the do-it-yourself market
under the premier Hamilton Brush brand.
Established customer base
Freeworld Coatings operates successfully across many sectors of the South
African economy, serving major customers with whom it has long-established
relationships through well-developed supply channels. Major customers in the
various channels include:
* Retail channel - Iliad Africa Group, Massmart Group, Mica Hardware
Group, Penny Pinchers Group, Spar Build-it;
* Trade channel - Murray & Roberts, Group Five, Sanlam, Old Mutual
and Investec;
* Automotive channel - BMW, Ford, General Motors, Mercedes, Nissan,
Toyota, Volkswagen; and
* Industrial channel - Afrox, Bell Equipment and Transnet.
Freeworld Coatings also counts a significant number of independently owned
hardware and paint specialist outlets as customers, with a national footprint
across South Africa.
Experienced management team
The Freeworld Coatings management team has an established track record and a
strong base of experience, which is reflected by achieving top quintile
returns (in comparison to its global peer group) and successfully integrating
strategic acquisitions into the business. Since 2002 the team has increased
turnover from R1 288 million to R2 348 million and operating profit from
R92.2 million to R383 million.
3. Prospects of Freeworld Coatings
The Directors of Freeworld Coatings are optimistic about the opportunities
and growth prospects available in South Africa and internationally. The
Company`s strategy is to be a world-class, commercially sensible and socially
responsible company with a presence in selected high growth multi-national
geographies, in which all the products and solutions offered can become
leaders in their respective markets.
The emerging middle class, post the 1994 elections, and the build up to the
2010 Soccer World Cup are also fuelling the Company`s growth. Freeworld
Coatings is well-positioned to benefit from the resulting increase in:
* infrastructure spend;
* housing development; and
* vehicle sales,
to be achieved as a result of South Africa`s economic growth.
Freeworld Coatings is intent on significantly growing its size and
international presence in an industry which is undergoing rapid
consolidation, thereby positioning itself over time as one of the leading
global paint competitors.
In order to achieve this, Freeworld Coatings has developed a strategy which
includes:
* targeting selective acquisitions which complement and further its
growth strategy;
* building its premium and mainstream brands;
* aligning the distribution channels to changing markets;
* lowering overall business system costs by internationally rolling
out the new business model under development in China;
* continued investment in research and development, as well as
accessing world-class and leading coatings technology through its
membership, inter alia, of the Coatings Research Group Institute
and Nova groups;
* further developing the role of its tinting systems;
* continually reviewing product ranges in terms of composition,
characteristics and functionality;
* focusing on innovation by fully capitalising on the research and
development facilities in Alberton (new product development) and
Stellenbosch (polymer research); and
* further developing Freeworld Coatings` already well-established
relationships with its international partners which include, inter
alia, Akzo Nobel and DuPont.
Additional growth is also expected through partnerships with global textured
coating manufacturers, providing access to the textured coating sector in
regions where Freeworld Coatings currently has a presence.
With the ever increasing pressure from a regulatory and environmental
perspective to reduce and ultimately eliminate volatile organic compounds
("VOC") from world coatings, the colourant business is ideally placed to
leverage its "zero VOC technology" and know-how into other markets. Such
markets will include Europe and Asia where stringent environmental targets
have been legislated and which present vast markets which Freeworld Coatings
is successfully penetrating.
Freeworld Coatings` strategy is underpinned by the "value-based management"
philosophy which seeks to create value for all its stakeholders including:
shareholders, employees, customers, principals and suppliers as well as the
communities in which the Company operates. Historically, the business has
been achieving returns well in excess of its cost of capital, with a place in
the top quintile of performers in the global coatings industry.
4. Directors
The names, ages and business addresses of the directors are set out
below:
On the date of listing, the Freeworld Coatings board will comprise:
Non-executive directors:
Robert Godsell (55) 14 Roxburghe Avenue,
(Chairman) Craighall Park, Johannesburg,
2196
Babalwa Ngonyama (33) Nedbank Corporate Offices,
3rd Floor D Block, 135
Rivonia Road, Sandton, 2146
Dumisa Ntsebeza (58) 718 Huguenot Chambers, 40
Queen Victoria Street, Cape
Town, 8001
Elias Links (61) 46 Hofmeyr Street, Welgemoed,
Belville, 7530
Moss Ngoasheng (49) 11 Alice Lane, 2nd Floor,
West Wing, Standard Bank
Building, Sandton, South
Africa, 2196
Noluthando Orleyn (51) Block G, Metropolitan Office
Park, Rivonia, 2128
Peter Surgey (53) Barloworld Corporate Office,
180 Katherine Street,
Sandton, 2196
Executive directors:
Andre Lamprecht (55) 180 Katherine Street,
Sandton, 2196
Doug Thomas (49) 180 Katherine Street,
Sandton, 2196
5. Copies of the Pre-Listing Statement
Copies of the pre-listing statement can be obtained during normal business
hours until 3 December 2007 from:
The registered office of Freeworld Coatings:
180 Katherine Street, Sandton, 2196
(PO Box 1227, Johannesburg, 2000)
The office Link Market Services South Africa (Proprietary) Limited:
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
6. Advisors
Merchant bank and sponsor
RAND MERCHANT BANK (A Division of FirstRand Bank Limited)
Attorneys
Read Hope Phillips Thomas & Cadman Incorporated
Reporting accountants and auditors
Deloitte & Touche
Date: 23/11/2007 10:36:03 Produced by the JSE SENS Department.
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