| Wed 4 May 2011, 15:28 | | BCX/BCA - Business Connexion Group Limited - Abridged Pre-Listing Statement |
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BCX
BCX
BCX/BCA - Business Connexion Group Limited - Abridged Pre-Listing Statement
Business Connexion Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1988/005282/06)
Ordinary Share code: BCX ISIN: ZAE000054631
"A" Share code: BCA ISIN: ZAE000156154
("BCX" or the "Company")
ABRIDGED PRE-LISTING STATEMENT
Abridged pre-listing statement relating to the listing of class "A" ordinary
shares of R0.0059 each in the issued share capital of BCX (""A" Shares") on the
exchange operated by the JSE Limited ("JSE") (the "Listing") with effect from
commencement of business on 11 May 2011. The information in this abridged pre-
listing statement has been extracted from the detailed pre-listing statement to
be issued by BCX on Friday, 6 May 2011.
This abridged pre-listing statement is not an invitation to the public to
subscribe for shares in BCX, but is issued in compliance with the Listings
Requirements of the JSE for the purpose of providing information to the public
with regard to the "A" shares in BCX.
1. Introduction
Reference is made to the circulars which were published dated 17 August 2010
regarding the BCX Black Economic Empowerment ("BEE") transaction and 9 March
2011 regarding the proposed acquisition by BCX from UCS Group Limited ("UCS") of
shares and claims in certain underlying subsidiaries of UCS ("Target
Assets")(the "Acquisition") as well as the further announcement dated 29 March
2011 regarding the Acquisition.
During September 2010, BCX effected an "A" share issue in terms of which 75 100
000 "A" shares with a par value of R0.0059 each were allotted and issued to
certain BEE participants ("Participants").
During December 2010, BCX and UCS entered into a sale of shares and claims
agreement in terms of which BCX will acquire the Target Assets from UCS ("the
Agreement"). In terms of the Agreement, BCX will allot and issue 101 243 118
ordinary shares with a par value of R0.0059 each in the issued share capital of
BCX ("Ordinary Shares") at R5.77 per share for a total consideration of R584 172
791 and 25 033 334 "A" shares at their par value of R0.0059 for a total
consideration of R147 696.67 to UCS (collectively, the "Consideration Shares").
The Consideration Shares will be unbundled by UCS to its shareholders. All
conditions precedent in relation to the Acquisition (including receipt of
shareholder and regulatory approvals) have now been fulfilled, or waived as the
case may be.
2. Rationale for the listing of the "A" Shares
The JSE will not approve the aforementioned allotment and issue of the 25 033
334 "A" shares to UCS unless the "A" shares in the issued share capital of BCX
are listed.
3. Details of the Listing
The JSE has approved the listing of the 75 100 000 "A" Shares currently in
issue, and the additional 25 033 334 "A" Shares to be issued to UCS pursuant to
the Acquisition, in the "Computer Services" sector of the JSE under the name
"BCX - A Shares", JSE Share Code "BCA" and ISIN ZAE000156154, with effect from
the commencement of business on 11 May 2011, subject to the following
conditions:
- the maximum votes that all the listed "A" Shares will be entitled to
exercise in the entire ordinary share capital (comprising Ordinary Shares
and "A" Shares) is 20%;
- the "A" Shares may be listed for a maximum period of three months;
- no further "A" Shares may be issued (other than in relation to the
Acquisition); and
- after a period of three months, BCX will make a fair offer to holders of
"A" Shares (""A" Shareholders"), following which the "A" Shares will be
delisted. The offer will be implemented by way of, inter alia, a share
repurchase.
4. Rights attaching to the "A" Shares
The "A" Shares forming part of the Consideration Shares will rank pari passu
with the "A" Shares held by the Participants. The only difference (as detailed
in paragraph 4.2 below) between the two being that whilst the BEE Participants`
shares will continue to be `locked-in` in order preserve the BEE credentials of
BCX, the "A" Shares forming part of the Consideration Shares will be freely
tradeable.
4.1. Voting
The "A" Shares rank pari passu with the Ordinary Shares in respect of voting
rights. This therefore means that the "A" Shares have full voting rights.
There are no voting pool arrangements, therefore the "A" Shareholders will be
entitled to vote their "A" Shares individually.
4.2. Transfer of "A" Shares
4.2.1. Shares held by the Participants
In order to maintain the BEE ownership status of BCX, the Participants shall not
sell, transfer, encumber, cede, pledge, hypothecate, or otherwise alienate the
75 100 000 "A" Shares held by them or any right or interest therein for at least
5 years ("Lock-in Period").
4.2.2. Consideration Shares
The abovementioned restrictions imposed on the "A" shares held by the
Participants will not apply to the 25 033 334 "A" Shares forming part of the
Consideration Shares. The Consideration Shares will be freely tradeable.
4.3. Variation of Share Capital
The share capital shall not be sub-divided or consolidated unless the "A" Shares
are sub-divided or consolidated on the same basis so as to leave the holders of
the "A" Shares in the same position as they were before the sub-division or
consolidation and thus not affecting the broad based BEE ("BBBEE") ratings of
the Company.
4.4. Distributions
An "A" Share shall not entitle the holder thereof to any dividends or
distributions until the date upon which:
- the Notional Outstandings, as defined in paragraph 4.6 below, of the "A"
Shares equal zero; or
- the Unwind Buy-Back, as defined in paragraph 4.7 below, is implemented;
whichever occurs earliest in time, and upon which date the "A" Shares will
rank pari passu with the Ordinary Shares ("Participation Date").
In respect of each declaration of dividends or other forms of distribution to
Ordinary Shareholders by the Company, a notional dividend - equal to the
dividend declared or distribution made in respect of each Ordinary Share - will
be earned per "A" Share ("Notional Dividend").
Up until the Participation Date, if the Company makes a distribution to its
Ordinary Shareholders by implementing a general buy-back of Ordinary Shares:
- the Company shall subject to acquisition of the necessary Shareholder and
regulatory approvals also repurchase a proportionate number of "A" Shares
from each holder at R 0.0059; and
- the buy-back consideration paid per Ordinary Share multiplied by the number
of "A" Shares repurchased from the "A" Shareholder shall constitute the
Notional Dividend to be deducted in aggregate from the total Notional
Outstandings on the "A" Shares retained by each holder.
Up until the Participation Date, if the Company makes a distribution in specie
(other than capitalisation shares) to its Ordinary Shareholders, the value so
distributed per Ordinary Share, as certified by the Board in writing at the
relevant time, shall constitute the Notional Dividend per "A" Share
4.5. Scrip dividends
If the Company declares a scrip dividend by issuing capitalisation shares to the
holders of its Ordinary Shares, and regardless of whether the holder of its
Ordinary Shares are offered the option to receive cash instead of scrip, the
Company shall at the same time that the capitalisation shares are issued to the
holders of its Ordinary Shares, issue and allot a proportionate number of new
"A" Shares to the holders of the "A" Shares as fully paid up. For illustrative
purposes if the issued Ordinary Share Capital is increased by 10% the issued "A"
Share Capital shall also be increased by 10%. The Notional Outstandings per
issued "A" Share shall in this instance, be adjusted by dividing the aggregate
Notional Outstandings on all the "A" Shares before the issue of the additional
"A" Shares by the total number of "A" Shares in issue after such issue.
4.6. Notional Outstandings
The "A" Shares will be listed at their par value of R0.0059. The trading price
of each "A" Share will be determined based on a number of factors. The market
price of the Ordinary Shares on the Participation Date is the most important
factor affecting the value of an "A" Share although it is also impacted by the
Notional Outstanding.
A notional amount equating to R5.78 ("Notional Amount") per "A" Share based on
the 30 day volume weighted average traded price ("VWAP") as at 11 June 2010
(which in essence is market value) is deemed to attach to each "A" Share.
On the Participation Date, each "A" Shareholder shall be notionally liable to
the Company for an amount equal to the Notional Outstandings, in respect of such
"A" Shareholder`s "A" Shares at the Participation Date, calculated by deducting
the aggregate Notional Dividends earned from 31 August 2010 ("Effective Date")
from the Notional Amount as increased at a rate of 80% of the prime rate
("Notional Rate") from the Effective Date and reduced by the option value
accumulated on replaced share options ("Option Value") as increased by the
overnight call deposit rate ("Call Rate"). The formula for calculating the
Notional Outstandings ("Notional Outstandings") is illustrated below:
NO = NA - ND - OV
NO = the Notional Outstandings as at the date of
calculation.
NA = the Notional Amount as increased and accumulated,
from the Effective Date at the Notional Rate.
ND = the aggregate Notional Dividend calculated from the
Effective Date, with each Notional Dividend being
increased (from the date of payment of the dividend
giving rise to that Notional Dividend) at the
Notional Rate.
OV = the Option Value as increased and accumulated from
the Effective Date at the Call Rate. For the sake of
clarity the Option Value in respect of the "A"
Shareholders other than the BCX Management "A" Share
Trust will be Rnil.
4.7. Unwind Buy-Back
If the Notional Outstandings in respect of the "A" Shares are not equal to zero
on the 5th anniversary of the Effective Date, then any holder of "A" Shares (or
holders collectively), that beneficially owns (or beneficially own amongst them)
20% or more of the "A" Shares in issue, shall be entitled at any time after such
5th anniversary, to demand that the Company implement a repurchase of sufficient
"A" Shares at R0.0059 per share in order to recover the value of the Notional
Outstandings (the "Unwind Buy-Back") by delivering a notice to that effect to
the Company ("Buy-Back Notice"). This Unwind Buy-Back will be implemented in
respect of all "A" Shares in issue and not just for the "A" Shareholders that
issued the Buy-Back Notice. If the Unwind Buy-Back is not implemented by the
holders of the "A" Shares by the 6th anniversary of the Effective Date, the
Company shall at any time thereafter be entitled to deliver a Buy-Back Notice to
the holders of the "A" Shares and implement the Unwind Buy-Back.
The Unwind Buy-Back is subject to BCX obtaining the requisite shareholder and
other regulatory approvals necessary for the repurchase of its shares.
The number of "A" Shares to be bought back by the Company shall be calculated by
dividing the Notional Outstandings per "A" Share at the date of the Unwind Buy-
Back by the fair market price, being the VWAP per Ordinary Share on the JSE
during the 30 trading day period immediately preceding the date upon which the
Buy-Back Notice is delivered to the Company or the holders of the "A" Shares as
the case may be, multiplied by the number of "A" Shares held and beneficially
owned by that holder on the date of implementation of the Unwind Buy-Back. The
formula to be used for the repurchase of the "A" Shares is the following:
N = NO X A
FM
N = the number of "A" Shares that the Company is entitled
and obliged to repurchase from each "A" Shareholder
to effect the Unwind Buy-Back.
NO = the Notional Outstandings per "A" Share as at the
date upon which the relevant "A" Shares are
repurchased pursuant to the Unwind Buy-Back.
FM = the VWAP per Ordinary Share on the JSE during the 30
trading day period immediately preceding the date
upon which the Buy-back Notice was delivered to the
Company (or to the "A" Shareholders) or if the
Company is no longer listed, fair market value per
share as determined by an independent merchant bank
or firm of auditors.
A = number of "A" Shares held and beneficially owned by
that holder on the date of implementation of the
Unwind Buy-Back.
5. Overview of BCX
BCX was incorporated in South Africa on 15 September 1988 and the Company listed
on the JSE in 2004.
BCX is South Africa`s largest provider of information and communications
technology services.
The Company`s history is rooted in a series of mergers and acquisitions that
stretches over a thirty year span and has resulted in the creation of Africa`s
first black-empowered ICT giant.
The Company comprises five operating divisions which are active throughout the
Southern African region with a growing footprint on the rest of the African
continent, in the United Kingdom and a corporate office.
These divisions are:
- Services division
Offers clients a full range of ICT infrastructure services capable of fulfilling
all their ICT requirements and operates the BCX owned data centres, which rates
among the largest and most technologically advanced data centres in Africa.
- Technology division
Delivers innovative technology solutions to both the private and public sectors.
- Innovation division
Is the incubator of the Group`s Connective Intelligence. This division focuses
on the Group`s proprietary software or packaged intellectual property lines of
business.
These three divisions are intricately linked to one another to offer holistic
information and communications technology (ICT) solutions to the Group`s
customer base.
Within each of these divisions, BCX has extensive expertise across an array of
vertical industry sectors including financial services, telecommunications,
petrochemicals, mining, healthcare, automotive and the public sector.
- International division
Supports the Group`s clients who have an international footprint. BCX has a
presence in Mozambique, Namibia, Nigeria, Tanzania, Zambia, Kenya and the United
Kingdom. The International division, by combining the skills set and solution
offering of all three divisions above, is able to drive the Group`s market share
on the African continent and further abroad.
- Investment division
The Investment division focuses on key strategic initiatives to drive the
group`s growth by partnering with other market leaders to enhance the group`s
depth and breadth of solution offerings.
- Corporate office
This office forms the administrative foundation of the Group providing
transactional support and specialist skills in marketing and communications,
finance, human resources, commercial services and corporate information
technology.
6. Directors
The names, ages, qualifications, business addresses and occupations of the
directors are set out below. All directors are South African:
Name, age, qualification and Business address
occupation
L B Mophatlane (37) Business Connexion Park North
BCom (Pretoria University), 789 Sixteenth Road
(CEO) Randjespark
Midrand, 1685
V Olver (37) Business Connexion Park North
BCom, HDip Acc (Rhodes 789 Sixteenth Road
University), CA(SA), HDip Tax Randjespark
(UNISA), Life Management Midrand, 1685
Institute Program (USA), CPA
(USA) BAcc, CA (SA)
(Chief financial Officer)
A C Ruiters (49) Cobble Park 130
BA (UCT), HDE (UCT), Executive Landsdowne Road
Diploma Business Studies Claremont, 7780
(Stanford University, USA)
Independent Non-executive
director
(Chairman)
F L Sekha (43) 13 San Antonio
BA LLB (UCT), PG Dip Media, 858 Campbell Road
Communications and Information Craigavon, 2146
Technology Law (Melbourne
University)
Non-executive director
J John (39) 4 Merchant Place
BCom (Durban Westville cnr Fredman Drive and Rivonia
University), BCompt Hons. Road
(Unisa), CA(SA) Diploma in Sandton, 2146
Company Direction (IoD)
J M Poluta (38) 22 Hurlingham Road
BCom, BAcc (Wits University), Illovo Boulevard
CA(SA) Illovo
Craighall, 2024
M Lehobye (36) Basadi in Motion Professional
BCom (UCT), HDip Acc (Wits Services
University), CA(SA) Unit E, 1st Floor
Building 14
Ashwood Place
Woodmead Business Park, 2128
N N Kekana (49) 22 Hurlingham Road
Post-graduate diploma in Illovo Boulevard
telecommunications and Illovo
information policy (UNISA), Craighall, 2024
Diploma in computer programming
(Globe)
J de Koker Business Connexion Park North
CIS, HDip Company Law 789 Sixteenth Road
(Company secretary) Randjespark
Midrand,1685
7. Copies of the pre-listing statement
The pre-listing statement is only available in English and copies thereof may be
obtained during normal business hours between Friday, 6 May 2011 and Friday, 10
June 2011 at the registered offices of BCX, Rand Merchant Bank, and at the
offices of the transfer secretaries, at their respective physical addresses
which appear below:
The registered office of BCX: The registered office of Rand
Business Connexion Park North Merchant Bank:
789 Sixteenth Road 1 Merchant Place
Randjespark Cnr Rivonia Road and Fredman
Midrand,1685 Drive
Sandton
Johannesburg
2196
The registered office of
Computershare Investor
Services(Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg
2001
The pre-listing statement will also be available on the BCX website at
www.bcx.co.za from Friday, 6 May 2011.
Johannesburg
4 May 2011
Merchant Bank and sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)
Attorneys
Cliffe Dekker Hofmeyr Incorporated
Transaction manager
Imbewu Capital Partners
Independent reporting accountants
KPMG Registered Auditors
Date: 04/05/2011 15:28:01 Produced by the JSE SENS Department.
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