| Thu 26 May 2011, 16:47 | | COH - Curro Holdings Limited - Abridged pre-listing statement and rights offer |
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JSE
CURRO
COH - Curro Holdings Limited - Abridged pre-listing statement and rights offer
announcement
Curro Holdings Limited
Incorporated in the Republic of South Africa
Registration Number 1998/025801/06
JSE Alpha Code: COH
ISIN: ZAE000156253
("Curro" or "the Company")
ABRIDGED PRE-LISTING STATEMENT AND RIGHTS OFFER ANNOUNCEMENT
ABRIDGED PRE-LISTING STATEMENT
This abridged pre-listing statement is not an invitation to the public to
subscribe for shares in Curro. It is issued in compliance with the Listings
Requirements of the JSE Limited ("the JSE"), for the purpose of providing
information to the public and investors with regard to Curro.
The information in this abridged pre-listing statement has been extracted from
the pre-listing statement issued by the Company on Thursday, 26 May 2011 ("the
Pre-listing Statement") relating to the listing by introduction of all of the
issued ordinary shares of the Company on the Altx of the JSE. Copies of the
full Pre-listing Statement may be obtained during office hours from:
i. the Company at 8 Monaco Square, 14 Church Street,Durbanville, 7550;
ii. PSG Capital (Proprietary) Limited, the corporate adviser of Curro, at
first floor, Ou Kollege Building, 35 Kerk Street, Stellenbosch, 7599
and at ground floor, DM Kisch Building, Inanda Greens Business Park, 54
Wierda Road West, Wierda Valley, Sandton, 2196; or
iii. Computershare Investor Services (Proprietary) Limited at Ground Floor,
70 Marshall Street, Johannesburg, 2001.
In addition, the Pre-listing Statement can be obtained on the Company`s
website at www.curro.co.za.
For a full appreciation of the listing, the Pre-listing Statement should be
read in its entirety.
INTRODUCTION
The main purpose of education is to empower every person with the opportunity
to achieve their potential as individuals and members of society. Education is
one of the cornerstones of society, providing the main strategic thrust to
long-term South African development in line with our enshrined constitutional
values.
As with medical care, people are willing to reprioritise their spending in
order to acquire good education for themselves or their children. Both of
these industries have proven to be quite resilient in tough economic
environments. More often than not ordinary people are naturally inclined
towards investing in the education and health of those near or dear to them.
History has also proven that consumers are prepared to sacrifice other
discretionary expenses, pay higher prices and travel further distances for
educational facilities which exceed those of average standards.
Across the world, schooling has historically been a sector catered for by the
state. However, international experience also indicates that independent or
private schools have always had a role to play. Furthermore, governments
across the world are facing increasing challenges in providing a high standard
of education to all citizens, thereby leaving an escalating demand for quality
affordable private schooling alternatives. Worldwide, in developed and
developing countries, private schools represent approximately 14% and 20% of
their respective schooling markets. However, for certain African countries
this figure exceeds 50% of all schooling. These figures are in sharp contrast
to the official South African statistics which indicate that the number of
private school learners represent less than 4% of the South African schooling
market.
The two main demand factors for private schools are:
- demand for a standard of education which exceeds that which the state can
provide (usually developing countries); and
- differentiated demand for alternative types and quality of education than
that provided by the state (usually developed countries).
Private schools can broadly be categorised in the following school groups:
- Community / Expatriate;
- Religious / Alternative schools;
- Profit-making; and
- Virtual schools.
In the case of South Africa, due to its particular history, during the
apartheid years a significant part of the white population had access to good
government schools, both in terms of teaching resources and infrastructure
("former model C schools"), while the previously disadvantaged section of the
population was neglected in terms of schooling facilities. Government faces a
massive challenge and financial backlog in its efforts to address the ever
increasing contrast in the quality of schooling and schools available in the
different areas in the country. Government resources are and will remain under
strain in its attempts to focus on areas and communities that need the
facilities most. Added to this are the educational implications and
aspirations of a continuous, rapidly growing black middle income group on the
demographic population graph, with a natural movement to higher income and
more affluent residential areas, where the Government can at present,
understandably, least afford to establish new schools.
Whilst the former model C schools have continued to provide excellent
education, the growing South African middle class has also led to increased
demand and therefore pressure on standards. Although the governing bodies of
these schools can charge fees at their own discretion, learners cannot be
excluded if their parents live in a school`s geographical feeder area and earn
an income below certain prescribed thresholds (whereupon schooling will be
subsidised or free). This results in increased enrolment at these schools
which leads to average class sizes increasing, with a concomitant inhibiting
effect on the potential quality of education and personal development.
Currently, government schools on average have more than 30 learners per class
and the pressure is expected to increase.
During the past decade, Curro has identified the huge and ever increasing
countrywide demand for schooling that exists in this market. It saw an
opportunity for the establishment of private schools in line with section 29
of the South African Constitution, which recognizes the right to establish
private schools as one of the constitutionally enshrined fundamental rights in
our country. It has since established itself where there are no other
significant players on national level and very few other significant players
on regional levels. In addition, Curro has recognised the need for private
enterprise to play a supportive role with Government in finding solutions for
the educational needs of South Africa. By building schools in middle to
affluent areas, Curro frees up valuable Government resources that can be spent
in less affluent areas.
Whilst Curro places high importance on being a socially responsible corporate
citizen, it is also a commercial enterprise which is accountable to its
shareholders for their investment in the Company. Investors in any company
(especially those in their early stages) take a risk when investing their
money in a company and therefore expect a return on their investment to
justify such risk. Substantial capital has already and additional capital
will be invested in the Company by Shareholders in order for Curro to develop
the necessary infrastructure and facilities for Curro schools. The Company
will therefore always focus on achieving financial results that will ensure
that Shareholders are appropriately rewarded for their investment in the
Company and that the Company is sustainable for years to come.
BRIEF OVERVIEW OF CURRO
History
Curro was incorporated and registered as a company on 30 December 1998 and
established as a small private enterprise. Due to demand and the standards it
offered, it immediately showed exceptional growth and in 2000 it developed its
first separate and privately owned campus in Durbanville, Western Cape.
Curro has subsequently increased its present business to 12 schools
countrywide which includes 8 schools on its own self-developed campuses, 2
schools on already established purchased campuses and another 4 schools which
are currently under construction, 2 of which are already partially in
operation with the remaining 2 schools scheduled to open in 2012. This
effectively means that Curro will own and operate at least 14 schools by 2012.
The Curro school operations
Curro provides the following levels of schooling:
- Play school - children from 6 months to 4 years;
- Pre-primary school - grades RR to R;
- Primary school - grades 1 to 7;
- High school - grades 8 to 12; and
- Aftercare facilities.
Curro aims to provide education based on the former model C school principles
with guaranteed small classes of a maximum of 25 learners per class. On
average, Curro has around 20 learners per class for Primary school classes and
15 learners per class for High school classes.
Curro`s fees are between 20% and 40% less than other role players in the
private education market. Curro attains a competitive edge in the South
African private education market through:
- partnering with developers that provide land at attractive prices, as
this will benefit their developments;
- development of its educational facilities using intellectual property
gained through past experience with an "in-house/sourced" project
management team that complete projects at a cost that is substantially
less than the cost that would be charged by external professional teams;
- Curro`s management team consists of leading educational experts with
intimate knowledge of the requirements of the educational environment.
Part of their business strategy entails the appointment of the best
available headmasters and rectors who receive above average remuneration
and incentives in accordance with their delegated powers and duties,
based on the level of the independent decision-making standards for which
they are expected to take responsibility; and
- services, such as debt collection, information technology, educational
research and development (which includes the benchmarking of standards),
provided to the Curro schools on a cost effective basis by the head
office.
Academic learning is balanced with co-curricular activities (sports and
cultural activities) in order to deliver well-balanced learners with the
potential of becoming stalwarts of society.
Educational delivery takes place in English only from playschool to Grade 12
or parallel medium (Afrikaans and English in separate classes) up to Grade 9
and thereafter dual medium for Grade 10 to Grade 12.
Curro`s schooling is based on four principles: child friendliness, creative
teaching, positive discipline and a Christian ethos.
Curro has established the Curro Centre for Educational Excellence, the purpose
whereof is to:
- develop and apply latest trends in curriculum standards and
dissemination;
- monitor quality of academic standards and ensure forms of standardisation
across campuses;
- provide advice on educational and related matters to the rectors,
principals and headmasters and teachers at the schools; and
- identify and develop master teachers, further centres and standards of
excellence in subjects, with the primary focus on maths, science and
technology.
Independent Examinations Board examinations have been accepted at all Curro
schools and will be in full effect from 2012.
Current schools in operation and planned schools comprise the following:
School Opened / 2011
opening Learners
1. Durbanville 1998 1 195
2. Langebaan 2007 679
3. Hazeldean (Pretoria East) 2008 713
4. Roodeplaat (Pretoria North) 2010 444
5. Witbank 2010 513
6. Serengeti Play school (Kempton Park) 2010 88
7. Hazeldean High School 2011 111
8. Helderwyk (Brakpan) 2011 224
9. Aurora (Honeydew) 2011 1 058
10. Hermanus 2011 136
11. Mosselbay 2011 146
12. Heuwelkruin (Polokwane) 2011 228
13. Nelspruit 2012 -
14. Burgersfort 2012 -
15. Port Elizabeth 2013 -
16. Krugersdorp* 2013 -
17. Centurion* 2013 -
Total 5 535
* Not yet contracted in terms of binding, unconditional acquisition agreements
but in firm discussions with the relevant counterparties.
DIRECTORS AND MANAGEMENT
Curro has appointed Advocate JA le Roux SC as the chairman of the board of
directors and Dr CR van der Merwe as chief executive officer of the Company.
The executive committee will be responsible for the day-to-day management of
Curro, which includes ensuring that the strategic direction of the board is
implemented.
The directors of the Company, all of whom are South African citizens, are:
Names and age Advocate JA Le Roux SC (59)
Position Non-executive chairman
Business Address Suite 611, 6th floor, Huguenot Building, Queen Victoria
Street, Cape Town, 8001
Names and age Dr CR van der Merwe(48)
Position Chief executive officer
Business Address 8 Monaco Square, 14 Church Street, Durbanville, 7550
Names and age B van der Linde (33)
Position Financial director
Business Address 8 Monaco Square, 14 Church Street, Durbanville, 7550
Names and age AJF Greyling (41)
Position Executive director
Business Address 8 Monaco Square, 14 Church Street, Durbanville, 7550
Names and age MC Mehl (66)
Position Independent non-executive director
Business Address West Block, Tannery Park, Belmont Avenue, Rondebosch,7700
Names and age PJ Mouton (35)
Position Non-executive director
Business Address 1st floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7599
Names and age B Petersen (51)
Position Independent non-executive director
Business Address Wale Street Chambers, 38 Wale Street, Cape Town, 8001
Names and age M Vilakazi (33)
Position Independent non-executive director
Business Address Block B, Techno Square, 42 Morningside Road, N`dabeni,
7405
LISTING ON THE JSE
The JSE has formally approved the listing of all of the ordinary shares in the
issued share capital of Curro, by way of introduction on the Altx of the JSE
under the abbreviated name "Curro", share code "COH" and "ISIN ZAE000156253"
with effect from the commencement of trade on Thursday, 2 June 2011.
As at the date of listing, the total authorised ordinary share capital of the
Company will comprise of 200 000 000 (two hundred million) ordinary shares
with a par value of R0.00001 each. The issued ordinary share capital will
comprise of 80 607 040 (eighty million six hundred and seven thousand and
forty) ordinary Shares with a par value of R0.00001 each.
CAPITAL RAISING BY MEANS OF A RIGHTS OFFER
Curro will, following the listing, raise capital from its shareholders by way
of a renounceable rights offer, allowing shareholders to trade their
renounceable letters of allocation ("the Rights Offer"). Curro intends raising
R322.4 million through the Rights Offer.
DECLARATION ANNOUNCEMENT IN RESPECT OF THE RIGHTS OFFER
RATIONALE FOR THE RIGHTS OFFER
The purpose of the Rights Offer is to provide Curro with capital to finance
the expansion of its network of schools and to provide Curro with additional
funding to take advantage of new opportunities that the market presents.
SALIENT TERMS OF THE RIGHTS OFFER
In terms of the Rights Offer, 80 607 040 new ordinary shares with a par value
of R0.00001 ("Rights Offer Shares") will be offered to Curro shareholders
recorded in Curro`s share register at the close of business on Friday, 17 June
2011, at a subscription price of 400 cents (subject to market conditions) per
Rights Offer Share, in the ratio of 1 Rights Offer Share for every 1 Curro
share held. The final subscription price is to be announced by Curro.
Paladin Capital Financial Services Limited ("Paladin Capital Financial
Services") has provided Curro with an irrevocable commitment to follow its
rights in terms of the Rights Offer and to subscribe for all the ordinary
shares to which it is entitled, meaning that its interest in Curro will not be
diluted. Paladin Capital Financial Services is a wholly owned subsidiary of
Paladin Capital Limited and currently holds 75.68% of the issued share capital
of Curro.
The balance of the Rights Offer will be underwritten by PSG Financial Services
Limited, a wholly owned subsidiary of PSG Group Limited, representing 19 603
520 Rights Offer Shares, for an underwriting fee of 1.5% of the amount
underwritten. The Rights Offer is not conditional upon any minimum
subscription being obtained. Excess applications for Rights Offer Shares will
not be allowed.
The directors intend to both take up certain of their rights in terms of the
Rights Offer and to dispose of the remainder of their rights in the market.
The Directors are in the process of arranging financing for the take up of
their rights offer shares. A detailed announcement regarding the take up of
rights offer shares and the disposal of rights in the market by directors will
be made before Friday, 1 July 2011, being the commencement of a closed period
for the Company.
SALIENT DATES AND TIMES
The salient dates and times relating to the Rights Offer are set out below.
2011
Curro lists on Altx Thursday, 2 June
Last day to trade in Curro ordinary Thursday,9 June
shares in order to participate in the
Rights Offer (cum entitlement) on
Curro shares commence trading ex-rights Friday, 10 June
on the JSE at 09:00 on
Listing of and trading in the letters Friday, 10 June
of allocation commences at 09:00 on
Record date for determining the Curro Friday, 17 June
shareholders entitled to participate in
the Rights Offer at close of business
on
Curro posts circular to its Monday, 20 June
shareholders and, where applicable,
form of instruction on
Rights Offer opens at 09:00 on Monday, 20 June
Dematerialised Curro shareholders will Monday, 20 June
have their accounts at their CSDP or
broker credited with their letters of
allocation on
Certificated Curro shareholders will Monday, 20 June
have their letters of allocation
credited to an electronic register at
the transfer secretaries
Last day to trade in letters of Friday, 1 July
allocation on the JSE in order to
participate in the Rights Offer
Last day for form of instruction to be Friday, 1 July
lodged with the transfer secretaries by
holders of certificated Curro shares
wishing to sell all or part of their
entitlement by 12:00 on
Listing of Rights Offer Shares and Monday, 4 July
trading therein on the JSE commences at
09:00 on
Record date for the letters of Friday, 8 July
allocation on
Rights Offer closes at 12:00 and Friday, 8 July
payment to be made and form of
instruction lodged by certificated
shareholders at the transfer
secretaries on
CSDP/broker accounts credited with Monday, 11 July
Rights Offer Shares and debited with
any payments due in respect of the
holders of dematerialised Rights Offer
Shares on
Rights Offer Shares certificates in Monday, 11 July
terms of the Rights Offer posted to
holders of certificated Rights Offer
Shares on or about
Results of Rights Offer announced on Monday, 11 July
SENS on
Notes:
- Changes to the above salient dates and times will be announced on
SENS.
- All times referred to in the announcement are local times in South
Africa.
- Holders of dematerialised Curro shares are required to notify their
CSDP or broker of the action they wish to take in respect of the
Rights Offer in the manner and by the time stipulated in the
agreement governing the relationship between the Curro shareholder
and his CSDP or broker.
- Curro share certificates may not be dematerialised or rematerialised
between, Friday, 10 June 2011, and Friday, 17 June 2011, both days
inclusive.
- CSDPs effect payment in respect of holders of dematerialised Rights
Offer Shares on a delivery versus payment basis.
To the extent that the rights are accepted, dematerialised shareholders will
have their accounts at their CSDP automatically credited with their rights and
certificated shareholders will have their rights credited to an account at
Computershare.
FOREIGN SHAREHOLDERS
Any shareholder resident outside the common monetary area who receives the
rights offer circular and form of instruction, should obtain advice as to
whether any governmental and/or any other legal consent is required and/or any
other formality must be observed to enable such a subscription to be made in
terms of such form of instruction.
The Rights Offer does not constitute an offer in any jurisdiction in which it
is illegal to make such an offer and the rights offer circular and form of
instruction should not be forwarded or transmitted by recipients thereof to
any person in any territory other than where it is lawful to make such an
offer. The Rights Offer Shares have not been and will not be registered under
the Securities Act of the United States of America. Accordingly, the Rights
Offer Shares may not be offered, sold, resold, delivered or transferred,
directly or indirectly, in or into the United States or to, or for the account
or benefit of, United States persons, except pursuant to exemptions from the
Securities Act. The rights offer circular and the accompanying documents are
not being, and must not be, mailed or otherwise distributed or sent in, into
or from the United States. The rights offer circular does not constitute an
offer of any securities for sale in the United States or to United States
persons.
The Rights Offer contained in the rights offer circular does not constitute an
offer in the District of Colombia, the United States, the Dominion of Canada,
the Commonwealth of Australia, Japan or in any other jurisdiction in which, or
to any person to whom, it would not be lawful to make such an offer. Non
qualifying shareholders should consult their professional advisers to
determine whether any governmental or other consents are required or other
formalities need to be observed to allow them to take up the Rights Offer, or
trade their entitlement. Shareholders holding Curro shares on behalf of
persons who are non-qualifying shareholders are responsible for ensuring that
taking up the Rights Offer, or trading in their entitlements under that offer,
do not breach regulations in the relevant overseas jurisdictions.
To the extent that non-qualifying shareholders are not entitled to participate
in the Rights Offer as a result of the aforementioned restrictions, the
allocated rights in respect of such non-qualifying shareholders shall revert
to Curro who shall be entitled to sell or place same or failing which such
rights will lapse.
RIGHTS OFFER CIRCULAR
A circular containing full details of the terms of the Rights Offer and a form
of instruction in respect of a letter of allocation will be posted, on or
about 20 June 2011, to all shareholders recorded in the register as such on
the record date.
Cape Town
26 May 2011
Corporate adviser: PSG Capital (Proprietary) Limited
Designated adviser: QuestCo Sponsors (Proprietary) Limited
Independent reporting accountants: Deloitte & Touche
Underwriter: PSG Financial Services Limited
Date: 26/05/2011 16:47:01 Produced by the JSE SENS Department.
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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.
