| Tue 5 Jun 2012, 16:37 | | TCP - Transaction Capital - Abridged pre-listing statement |
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JSE
TCP
TCP - Transaction Capital - Abridged pre-listing statement
Transaction Capital Limited
(formerly Transaction Capital (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2002/031730/06)
JSE share code: TCP ISIN: ZAE000167391
("Transaction Capital" or the "Company")
(Date of incorporation: 18 December 2002)
Abridged pre-listing statement
This abridged pre-listing statement does not constitute or form part of any
offer for sale or subscription of or solicitation to buy or subscribe for any
securities, and neither this abridged pre-listing statement nor any part of it
shall form the basis of or be relied on in connection with or act as an
inducement to enter into any contract or commitment whatsoever.
This abridged pre-listing statement is an advertisement and not a prospectus.
Investors should not purchase or subscribe for any transferable securities
referred to in this abridged pre-listing statement except on the basis of
information in the pre-listing statement to be published by Transaction Capital
in connection with the listing of its ordinary shares on the securities exchange
operated by JSE Limited ("JSE").
The information in this abridged pre-listing statement has been extracted from
the full pre-listing statement issued by Transaction Capital dated 7 June 2012.
For a full appreciation of Transaction Capital and its subsidiaries (the
"Group") and the Offer, the full pre-listing statement should be read in its
entirety.
The Offer was conditional on the Placement Agreement being concluded and
becoming unconditional. (The Placement Agreement was signed on 31 May 2012). The
Offer remains conditional upon the Listing of all of the Offer Shares on the
JSE, failing which the Offer and any acceptance thereof shall not be of any
force or effect and no person shall have any claim whatsoever against the
Selling Shareholders, the Bookrunner or any other person as a result of the
failure of any condition. If the Directors in their discretion determine, the
Company shall not be obliged to proceed with the Offer but reserves the right to
do so.
The definitions and interpretations used in the full pre-listing statement apply
to this abridged pre-listing statement.
Copies of the full pre-listing statement may be obtained during normal business
hours from 7 June 2012 to 22 June 2012 from the Company and the Sponsor at their
respective physical addresses which appear in the corporate information and
advisers section of the full Pre-listing statement.
1. Introduction
This abridged pre-listing statement relates to an offer for subscription by
Transaction Capital and an offer for sale by the Selling Shareholders, to
selected institutional and invited investors in South Africa and selected
institutional investors in other jurisdictions, and an offer for subscription,
to employees of the Group, subject to certain conditions, to whom the Offer has
been specifically addressed, of up to 115 million Offer Shares (the "Offer").
The minimum Offer Shares comprised 50 million new Subscription Shares, 25
million existing Sale Shares and 11.25 million Overallotment Shares (at the
Offer Price) in terms of the Overallotment Option which the Selling Shareholders
granted to the Stabilisation Manager. Demand resulted in the Sale Shares being
increased to 39 million shares. The Selling Shareholders granted to the
Stabilisation Manager an Overallotment Option to purchase for resale 13.35
million Overallotment Shares (at the Offer Price), which may be used for the
purposes of covering overallotments before the end of the Stabilisation Period.
This abridged pre-listing statement is not an offer to the public as
contemplated in the Companies Act and accordingly no prospectus will be issued
or registered in respect of the Offer. This abridged pre-listing statement is
issued in compliance with the Listings Requirements.
The Offer Shares will be issued in dematerialised form only and, accordingly, no
physical documents of title will be issued or delivered to successful
applicants. The Offer Shares will rank pari passu with all other Transaction
Capital ordinary shares in issue.
The JSE has granted Transaction Capital a listing in respect of the entire
issued ordinary share capital of Transaction Capital in the "Speciality Finance"
subsector of the "Financial Services" sector of the main board of the JSE under
the abbreviated name "TRANSCAP", symbol "TCP" and ISIN: ZAE000167391, subject to
the fulfilment of certain conditions. The Listing is expected to be effective
from the commencement of business on 7 June 2012.
At the date of the Listing, the share capital of Transaction Capital will
comprise 1 000 000 000 authorised ordinary shares and 584 338 861 issued
ordinary shares. The Subscription Shares will represent 9.4% of the issued share
capital prior to the Offer. The Sale Shares represent 7.4% of the issued share
capital prior to the Offer. The Overallotment Shares represent up to 2.5% of the
issued share capital prior to the Offer. The subscription for and purchase of
Offer Shares involves risks. Investors are referred to the section "Risk
Factors" in section 3 of the full pre-listing statement.
The Offer was not made, and the Offer Shares were not offered or sold, in the
United States of America. Accordingly, the Offer Shares have not been and will
not be registered under the U.S. Securities Act, or with any securities laws of
any state of, or other jurisdiction in, the United States, and may not be
offered or sold within the United States unless the Offer Shares are registered
under the U.S. Securities Act or an exemption from the registration requirements
under the U.S. Securities Act is available.
2. Rationale for listing and use of proceeds
Transaction Capital anticipates benefit to the Group and its stakeholders in the
Listing of the Offer Shares on the JSE for, amongst others, the reasons set out
below.
The Listing will:
* provide Transaction Capital with additional capital to support growth and
establish a base from which equity capital may be raised in the future (to the
extent required) to facilitate further growth;
* provide Transaction Capital with the flexibility to optimise its equity and
debt capital structures and further strengthen its balance sheet and
profitability profile;
* provide a currency in the form of listed shares that Transaction Capital may
potentially utilise to make acquisitions;
* enhance the Group`s ability to raise debt capital through its listed status;
* enhance Transaction Capital`s public profile, transparency and general public
awareness regarding its businesses; and
* further enhance Transaction Capital`s ability to attract and retain key
executive and senior members of staff by affording them the opportunity to
participate in the equity and future growth of the Group.
Transaction Capital will not receive any proceeds from the sale of the Sale
Shares or Overallotment Shares, if any, to be sold by the Selling Shareholders.
3. Group overview and profile
Transaction Capital is an independent group of industry leading companies
participating in non-deposit-taking financial services with a focus on asset-
backed lending, unsecured lending, credit services and payment services in
Southern Africa. Transaction Capital is led by a Group Executive Office, which
directs, coordinates, controls and governs these companies.
Transaction Capital regards its primary objective as the enhancement of the
competitive position of its operating divisions, which provide credit, credit
services and payment services to select mass, emerging and under-served segments
of Southern African consumer markets, SMEs, and to credit retailers, banks and
other dominant credit providers. This is achieved through: a superior ability to
assess and manage credit and operational risk; efficient allocation of capital;
the raising of high quality and competitive funding; the management of
liquidity, funding and interest rate risk; the development and oversight of a
strategic plan and the maintenance of a strong culture of governance,
accountability, ethics and transparency.
The Group focuses on identifying, developing and then offering specialised
financial products and services in selected market segments that have
historically been under-served by the traditional banking sector. Over the
years, its businesses have transitioned beyond their entrepreneurial origins to
achieve scale and strong market positions. The benefits of scale not only allow
for greater penetration of its chosen products into an under-served market and
the further strengthening of its competitive position, but over time also allows
for a reduction of pricing and greater product differentiation as the benefits
of this scale are passed onto its customers. The Group is intentionally
positioned to take advantage of the macro- and socio-economic backdrop of South
Africa and in particular an expanding credit and payments industry which serves
the growing LSM 5 to 9 consumer markets and the SME market. Transaction Capital
has achieved an alignment of the financial products and services it offers with
the burgeoning financial services requirements of historically under-served
segments of the South African population. This approach is consistent with the
South African Government`s drive for greater levels of financial inclusion,
thereby contributing to the development of South Africa and the empowerment of
its people.
Within these select market segments, Transaction Capital has a sound track
record of acquiring or founding and then developing businesses beyond their
entrepreneurial origins to achieve scale and strong market positions. This has
been achieved by: evaluating, managing and hence mitigating identified risks to
acceptable levels; introducing appropriately priced equity capital together with
wholesale debt funding into such businesses; attracting and retaining the
requisite talent; and establishing appropriate managerial and governance
practices to generate an attractive risk adjusted return. The Group is sustained
by an established and diversified funding position, delivering strong financial
performance.
It is the Group`s vision that its clients will regard its businesses as their
first choice when utilising the cost-effective, innovative, differentiated
services they provide, while acknowledging the compliance, expertise, value and
cachet that accrues from their being part of the Transaction Capital Group,
while funders and counterparties will regard Transaction Capital as an
innovative group that exemplifies the highest standards of risk management,
transparency, disclosure, prudence, compliance, governance and ethics.
The Group operates in two sectors, namely lending and services. Each sector
currently comprises two divisions. Lending comprises an asset-backed lending
division and an unsecured lending division, and services comprises a credit
services division and a payment services division.
The following diagram is the summarised Group structure as at and for the period
ending 30 September 2011:
Transaction Capital Limited
Income R3 606 million (a)
Profit before tax ("PBT") R454 million(a)
Employees: 4 305 Group, 43 (Head Office)
Lending
Income R2 499 million
PBT R332 million
Asset-backed lending
Loans and advances R4 011 million
Income R1 092 million
PBT R137 million
SA TAXI
Financier of independent SME minibus taxi operators
(354 employees)
RAND TRUST
Provider of working capital through invoice discounting and
commercial debtors management
(57 employees)
Unsecured lending
Loans and advances R2 635 million
Income R1 407 million
PBT R195 million
BAYPORT
Provider of unsecured personal loans to emerging middle income clients
(964 employees)
Services
Income R1 072 million (b)
PBT R141 million(b)
Credit services
EBITDA R109 million
Income R635 million
PBT R91 million
MBD CREDIT SOLUTIONS
Collector of distressed accounts receivables (agency and
principal)
(2 451 employees)
PIC SOLUTIONS
Credit risk consultancy services and software resellers (FICO)
(67 employees)
Payment services
EBITDA R108 million
Income R437 million
PBT R50 million
PAYCORP HOLDINGS
ATM Solutions: Owner and operator of off-bank premises ATMs and EFT terminals
Drawcard: Early stage developer and issuer of pre-paid debt card products
(369 employees)
(a) Corporate Support contributes R34 million to income and R(19) million to
PBT.
(b) Excludes discontinued operations (Mortgage Capital).
Note: Income defined as interest and other similar income + non-interest revenue
throughout the document.
In financial year 2011, the Group`s asset-backed lending division contributed
30% of consolidated profit before tax, while the unsecured lending division,
credit services and payment services divisions contributed 43%, 20% and 11%,
respectively, to consolidated profit before tax (with corporate support having a
negative contribution of 4%).
4. Key strengths
As a result of the key strengths listed below, Transaction Capital is able to
identify underserved, undercapitalised and higher yielding asset classes while
assessing and mitigating the risks associated with them. The Group then
allocates equity together with external wholesale debt and operational capacity
(i.e. competent management and scaled businesses that can absorb volume where
necessary) to achieve an acceptable risk adjusted return. Transaction Capital:
* comprises businesses which are intentionally positioned in selected market
segments (being mass markets that are emerging and underserved) in the South
African financial services sector, which markets offer continued growth
opportunities:
- Transaction Capital`s businesses have achieved scale, creating strong
relative market positions and practical barriers to entry in their selected
market segments;
- focused and specialised expertise is a key strength and driver of
Transaction Capital`s performance;
* generates a diversified combination of interest and non-interest income from a
range of complementary lending and services businesses;
* has a deep understanding of credit risk and has developed specialist risk
assessment practices;
* has a successful and well managed wholesale funding programme;
* has a proven track record of organic and acquisitive growth;
* possesses an entrepreneurial ethos complimented by experienced professional
management; and
* has contributed to the social development and financial empowerment of
underprivileged people and under-served businesses.
For further information regarding the Group`s key strengths, refer to paragraph
3 of Section 1 of the full pre-listing statement.
5. Strategy
5.1 Overview
Transaction Capital places the strategic positioning of the Group among its
highest priorities.
This task entails the pursuit of two objectives, both utilising a judicious
combination of the finest elements of formal theory and entrepreneurial
creativity.
The first objective is the competitive positioning of each business unit within
its chosen market segment.
This requires the definition and delivery of a value proposition to clients,
counterparties and employees which is unique relative to competitors.
The second objective is the creation of value arising from the composition and
capabilities of the Group, in excess of the tangible and intangible costs
thereof. This requires the agglomeration of a portfolio of complementary
businesses and assets through financially accretive acquisitions and disposals,
and the subsequent creation of intra-Group value through directive leadership
and intervention, restructuring, transferring skills or sharing activities.
The successful achievement of these two objectives results in the creation of
value for shareholders in a manner they cannot.
5.2 Strategic priorities
The following strategic priorities will result in Transaction Capital achieving
the objectives described above:
* seek out new growth opportunities to leverage existing capabilities and cross-
sell;
* sustain long-term funding structures to support the Group`s growth;
* invest in skills and information technology to create stakeholder value and to
manage and mitigate risk;
* enhance returns through operational excellence, intra-Group value creation and
governance; and
* target, acquire and integrate accretive acquisitions.
6. Dividend policy
The Directors recognise the importance of maintaining a consistent and
transparent dividend policy and will endeavour to avoid volatile swings in the
dividend profile by ensuring high quality medium term strategic and financial
planning. It is the intention to pay dividends after each six-monthly reporting
period, maintaining a dividend cover ratio of between 4 and 5 times annual
headline earnings. However, there is no assurance that a dividend will be paid
in respect of any financial period, and any future dividends will be a function
of the profitability and return on equity of the Group, the future organic or
acquisitive growth strategies which require capital investment, and/or the need
to strengthen the balance sheet during periods of economic uncertainty.
The Directors intend to declare the first dividend of the Company once listed
during November/December 2012 based on the six months earnings to September
2012. As the Company has STC credits available to it, there will be no Dividends
Withholding Tax ("DWT") on this dividend.
7. Overallotment and stabilisation
In connection with the Offer, the Stabilisation Manager may in terms of the
Securities Services Act overallot or effect transactions with a view to
supporting the market price of the Offer Shares at a higher level than that
which might otherwise prevail for a limited period after the Listing Date.
However, there is no obligation for the Stabilisation Manager to do so. Such
stabilising action, if commenced, may be discontinued at any time, provided two
business days` notice is given to the JSE, but may under no circumstances
continue beyond the 30th calendar day after the Listing Date.
The Selling Shareholders have granted the Stabilisation Manager the
Overallotment Option which is 15% of the final number of the Offer Shares, being
13.35 million Shares.
8. Directors
The full names, qualifications, ages, business address, occupations, capacities
and nationalities of the Directors are outlined below:
Full name and qualifications Age Capacity and occupation
David Mark Hurwitz 40 Chief Financial Officer
BCom, CA(SA), H Dip Tax Member of the Executive
Committee
Member of the Risk and
Compliance Committee
Member of the Asset and
Liability Committee
Jonathan Michael Jawno 46 Deputy Chief Executive
BCom, CA(SA) Officer
Member of the Executive
Committee
Chairman of the Asset and
Liability Committee
Member of the Risk and
Compliance Committee
Member of the Nominations
and Remuneration
Committee
Steven Kark 38 Executive director
BCom, PDBA Chief Executive Officer
of Paycorp
Member of the Executive
Committee
Mark James Lamberti 61 Chief Executive Officer
BCom, MBA, PPL Chairman of the Executive
Committee
Member of the Asset and
Liability Committee
Member of the Risk and
Compliance Committee
Member of the Social and
Ethics Committee
Phumzile Langeni 38 Independent non-executive
BCom (Hons) director
Member of the Audit
Committee
Member of the Nominations
and Remuneration
Committee
Member of the Social and
Ethics Committee
Motsehoa Brenda Madumise 47 Independent non-executive
BProc, LLB, MBA, Dip director
International Trade Law Chairperson of the Social
and Ethics Committee
Michael Paul Mendelowitz 46 Chief Investment Officer
BCom, CA(SA) Member of the Executive
Committee
Roberto Rossi 50 Executive director
BSc (Mech Eng) GDE (Ind Eng) BProc Member of the Risk and
Compliance Committee
Christopher Stefan Seabrooke 59 Independent non-executive
BCom, BAcc, MBA, FCMA Chairman
Member of the Nominations
and Remuneration
Committee
Member of the Asset and
Liability Committee
Member of the Risk and
Compliance Committee
Dumisani Dumekhaya Tabata 56 Independent non-executive
BProc, BLegum director
Chairman of the
Nominations and
Remuneration Committee
David Farring Woollam 48 Independent non-executive
BCom, CA(SA) director
Chairman of the Audit
Committee
Chairman of the Risk and
Compliance Committee
Member of the Asset and
Liability Committee
Shaun Zagnoev 45 Non-executive director
MSc (Elec Eng), MBA representing Ethos
Member of the Audit
Committee
Member of the Nominations
and Remuneration
Committee
All Directors are citizens of South Africa.
The business address of the Directors is Sandhavon Office Park, 14 Pongola
Crescent, Eastgate Ext. 17, Sandton, 2199, South Africa.
9. The Offer
The Offer comprises:
* an Offer for Subscription;
* an Offer for Sale; and
* the Overallotment Option, if exercised.
The principal terms of the Offer are as follows:
Principal term Amount
Offer Price R8.00
Maximum value to be raised R460 million
Actual amount raised R400 million
Number of Shares allocated 50 million Subscription Shares
39 million Sale Shares
13.35 million Overallotment Shares
All permanent employees of the Group on the Opening Date and who are also
employees of the Group on the Listing Date were offered an option to participate
in the Offer through the General Share Scheme in accordance with section
96(1)(f) of the Companies Act, as read with sections 95 and 97. Employees who
wished to accept and exercise the option were entitled to do so on exactly the
same terms and conditions as pertain to the Offer save that:
* investments were subject to a minimum investment of R5 000 and a maximum of R1
million;
* the maximum total value of shares allocated as part of the Staff Option were
limited to R25 million;
* employees were required to participate through the mechanism of the General
Staff Scheme; and
* employees were preferred through participation in the General Staff Scheme as
to allocation only, in relation to the Offer.
Employees will not be prohibited from disposing of their Shares subscribed for
in the Staff Option.
Offerees will, if applications are successful, in all circumstances, upon
Listing, receive Transaction Capital Shares.
On 24 May 2012 Transaction Capital published that Mark Lamberti, Chief Executive
Officer of Transaction Capital, intended to subscribe through the bookbuild
process for 3 000 000 Offer Shares at the Offer Price with preferred allocation.
The Offer was conditional on the Placement Agreement being concluded and
becoming unconditional. (The Placement Agreement was signed on 31 May 2012). The
Offer remains conditional upon the Listing of all of the Offer Shares on the
JSE, failing which the Offer and any acceptance thereof shall not be of any
force or effect and no person shall have any claim whatsoever against the
Selling Shareholders, the Bookrunner or any other person as a result of the
failure of any condition. If the Directors in their discretion determine, the
Company shall not be obliged to proceed with the Offer but reserves the right to
do so.
All Shares that are in issue as of the date of this pre-listing statement will
rank pari passu in all respects.
10. Important dates
The expected listing date is 7 June 2012.
Note that all dates are subject to change. Any such change will be published in
the press and on SENS, where applicable.
11. Authorised and issued share capital of Transaction Capital
The authorised and issued share capital of Transaction Capital before and after
the Listing is set out in the table below:
At the Last Practicable Date After the Offer and Listing#
Total authorised share
capital (shares) 1 000 000 000 1 000 000 000
Total issued share
capital (Rand) 1 379 635 000 1 792 017 944
Total issued share
capital (shares) 530 605 256 584 338 861
* Share capital converted to no par value shares.
# Assuming conversion of the Convertible Loan and after the expenses of the
Offer.
Resolutions passed by shareholders in accordance with the Companies Act in April
and May 2012 approved, among other things, the following special resolutions:
* conversion of par value ordinary shares to no par value ordinary shares, which
became effective on 10 May 2012;
* a general authority to repurchase securities, subject to certain restrictions
in terms of the requirements of the Companies Act and the Listings Requirements;
* approval of the issue of shares in terms of section 41(1) of the Companies Act
insofar as is necessary;
* approval of the issue of shares in terms of section 41(3) of the Companies Act
insofar as is necessary;
* approval of financial assistance in relation to the warranties and indemnities
to be given in the Placement Agreement;
* a specific authority to repurchase securities as contemplated in certain
convertible loan agreements entered into between the Company and Futuregrowth,
on the one hand, and the Company and Sanlam on the other hand;
* a specific authority to repurchase securities issued by the Company in terms
of the Transaction Capital General Share Scheme;
* any special resolutions that may be required relating to the issue of shares
to Directors or prescribed officers or future directors and prescribed officers
and the allotment and issue of shares thereto, whether in terms of the
Transaction Capital General Share Scheme or otherwise, as may be agreed to and
authorised by the Nominations and Remuneration Committee of the Company, and the
following ordinary resolutions:
* a general authority to issue shares for cash subject to certain restrictions
in terms of the Companies Act and the Listings Requirements;
* a general authority to Directors to allot and issue authorised, but unissued,
shares, subject to the provisions of the Companies Act and the Listings
Requirements; and
* authorising the Company secretary and/or any Director to give effect to the
aforegoing.
None of the issued shares are held as treasury shares by any subsidiary of
Transaction Capital.
There are no founder`s and management or deferred shares.
12. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF TRANSACTION CAPITAL
The unaudited pro forma statement of financial position at 31 March 2012 and
statement of comprehensive income of Transaction Capital for the six months
ended 31 March 2012 set out below have been prepared to show the impact of the
Offer as well as the activation of certain convertible loan agreements.
The unaudited pro forma statement of financial position and statement of
comprehensive income have been prepared for illustrative purposes only and
because of their nature may not fairly present Transaction Capital`s financial
position, changes in equity, results of operations or cash flows, nor the effect
and impact of the Offer and the activation of certain convertible loan
agreements going forward. The directors of the Company are responsible for the
compilation, contents and preparation of financial information giving effect to
the Offer and the activation of certain convertible loan agreements based on
reviewed financial information. Their responsibility includes determining that
the unaudited pro forma financial information has been properly compiled on the
basis stated, the basis is consistent with the accounting policies of
Transaction Capital and the pro forma adjustments are appropriate for the
purposes of the unaudited pro forma financial information disclosed pursuant to
the Listings Requirements.
The unaudited pro forma consolidated statement of financial position and the
unaudited pro forma consolidated statement of comprehensive income are presented
in a manner consistent in all respects with IFRS, with the SAICA Guide on Pro
Forma Financial Information and with the basis on which the historical financial
information has been prepared in terms of accounting policies of Transaction
Capital.
The unaudited pro forma statement of financial position set out below presents
the effects of the Offer and certain convertible loans on the consolidated
financial position of Transaction Capital as at 31 March 2012 based on the
assumption that the Offer and the activation of certain convertible loan
agreements were effective on 31 March 2012.
The unaudited pro forma statement of comprehensive income set out below presents
the effects of the Offer and certain convertible loans on the consolidated
results of Transaction Capital for the six months ended 31 March 2012 based on
the assumption that the Offer and the activation of certain convertible loan
agreements were affected on 1 October 2011.
The Before column relate to reviewed results for the six-month period ended 31
March 2012.
Before Adjustments Pro forma after
(R`000) (R`000) (R`000)
Net asset value per share
Number of shares (`000) 502 833 81 506 584 339
Net asset value per share (cents) 405.6 455.8
Tangible net asset value per share
(cents) 213.0 290.1
Earnings per share
Weighted average number of shares
in issue (`000) 473 432 81 506 554 938
Shares deemed to be issued for no
consideration in respect of convertible
loans and share issues 12 851 (12 851) -
Diluted weighted average number of
shares in issue (`000) 486 283 554 938
Earnings per share (cents) 36.2 33.8
Headline earnings per share (cents) 36.2 33.8
Diluted earnings per share (cents) 37.2 33.8
Diluted headline earnings per
share (cents) 37.2 33.8
Notes and assumptions:
1. Fifty million shares are issued in terms of the Offer at R8.00 per share,
which amounts to R400 million. Staff and director issues of shares and
conversion of certain convertible loans amount to 31,506 million new shares,
which represents R250,397 million.
2. The pro forma financial information above assumed net proceeds of R383,516
million (after share issues to staff and directors and after transaction costs),
of which an amount of R379,8 million is applied to reduce debt.
3. R38,862 million is expected to be saved in interest if the proceeds of the
Offer are applied to reduce debt.
4. Transaction Capital will incur estimated once-off IPO related costs of
R35.7 million (of which R5 million is already accrued for in the Income
Statement) which have been charged equally to equity and the statement of
comprehensive income.
5. A tax rate of 28% on the profit before tax has been applied to the pro
formas.
6. Funds managed by Futuregrowth held R190 million of subordinated debt that
it was able to convert to equity at their option during the period of 120 days
post the Listing, at a 10% discount to the Offer Price. On 24 April 2012
Futuregrowth elected to cancel this option, and the convertible loan advanced by
the Subscriber to the Company on 31 August 2011 of R190 million (one hundred and
ninety million rand), referred to above, plus interest was settled by the
Company. In addition, on 24 April 2012, the loan of R7 229 706 (seven million
two hundred and twenty nine thousand seven hundred and six rand) was repaid by
the Company to the Subscriber, who then subscribed for 24 871 337 shares at
R7.93 (seven rand and ninety three cents) per share being a total subscription
proceeds of R197 229 702 (one hundred and ninety seven million two hundred and
twenty nine thousand seven hundred and two rand). The Futuregrowth transaction
was done at arms-length and hence no discounts or premiums were paid, other than
a premium to the par value of 0.1 cent. The effect was to recognise in Income
R21.1 million previously reflected as a liability and to expense R16.7 million
previously recognised as an asset. The asset and liability discussed above arose
on the issue of the debt. The liability was the difference between the cash
received and the equity to be issued, i.e. the 10% discount, the asset was the
cost of such discount that was to be deferred over the life of the debt and not
yet expensed.
7. Detailed pro forma financial information appears in the full pre-listing
statement.
13. Listing on the JSE
The JSE has granted Transaction Capital a listing in respect of the entire
issued ordinary share capital of Transaction Capital (the "Listing") in the
"Speciality Finance" subsector of the "Financial Services" sector of the main
board of the JSE under the abbreviated name "TRANSCAP", symbol "TCP" and ISIN:
ZAE000167391, subject to the conditions referred to in the section entitled
"Important dates and times" being fulfilled. The Listing is expected to be
effective from the commencement of business on 7 June 2012. Securities for which
Listing is sought will be fully paid up and freely transferable.
14. Copies of the full pre-listing statement
The full pre-listing statement is available in English only. Copies of the full
pre-listing statement may be obtained during business hours from 7 June 2012
until 22 June 2012 from the Company and the Sponsor at the following addresses:
The Company Sponsor
Transaction Capital Deutsche Securities (SA) Proprietary Limited
14 Pongola Crescent 3 Exchange Square
Sandhavon Office Park 87 Maude Street
Eastgate Extension 17 Sandton, 2196
Sandton, 2199
In addition, the full pre-listing statement is available in electronic form on
Transaction Capital`s website (www.transactioncapital.co.za).
Sandton
5 June 2012
Global Coordinator, Bookrunner, Financial Adviser and Stabilisation Manager
Deutsche Bank
Sponsor Independent Reporting Accountant & Auditors
Deutsche Securities (SA) Deloitte & Touche
(Proprietary) Limited Registered Auditors
(A non-bank member of the
Deutsche Bank Group)
Legal Adviser to the Company South African Legal Adviser
ENS to Deutsche Bank AG, London Branch and
Deutsche Securities (SA) Proprietary
Limited
BOWMAN GILFILLAN
For further enquiries, please contact:
Brunswick Deutsche Bank
Rob Pinker +27 (0) 83 326 7794 Herman Bosman +27 (0) 11 775 7360
Byron Kennedy +27 (0) 82 453 2066 Christopher Laing +44 (20) 754 55643
James Dray +27 (0) 82 828 4568 Michele Cohen +44 (20) 754 56371
Disclaimer
1. This announcement has been prepared by Transaction Capital Limited
("Transaction Capital" or the "Company") and contains information concerning
Transaction Capital, its subsidiaries and associates (together with Transaction
Capital, the "TC Group"), the proposed offering by Transaction Capital, of its
ordinary shares (the "Offer") and the proposed listing on the securities
exchange operated by the JSE Limited. This announcement has been prepared for
information purposes only and may not be used for any other purpose.
2. This announcement does not constitute an offer of securities in any
jurisdiction. This announcement should not be relied upon in connection with,
any contract or investment decision. Any purchase of or subscription for shares
in the Offer should be made solely on the basis of the information contained in
the pre-listing statement to be issued by the Company in connection with the
Offer, in final form. None of the TC Group, the bookrunner, the sponsor or any
of their respective directors, officers, employees, legal and other advisers or
agents nor any other person accepts any liability whatsoever for any loss
howsoever arising from any use of this announcement or its contents or otherwise
arising in connection therewith.
3. The information contained in this announcement does not purport to be
comprehensive. Neither Transaction Capital nor any other member of the TC Group,
the bookrunner, the sponsor, nor any of their respective affiliates and
associated companies, nor any of their respective directors, officers,
employees, legal and other advisers or agents nor any other person, accepts any
responsibility for, or makes any representation or warranty, express or implied,
as to the truthfulness, accuracy or completeness of the information contained in
this announcement (nor whether any information has been omitted from this
announcement) or of any other information relating to the TC Group, whether
written, oral or in a visual or electronic form, transmitted or made available.
In particular, no representation or warranty is given as to the achievement or
reasonableness of, and no reliance should be placed on, any projections,
targets, estimates or forecasts contained in this announcement and nothing in
this announcement is or should be relied on as a promise or representation as
to the future.
4. This announcement may contain certain "forward-looking statements"
regarding beliefs or expectations of the TC Group, its directors and other
members of its senior management about the TC Group`s financial condition,
results of operations, cash flow, strategy and business and the transactions
described in this announcement. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other than statements
of historical facts. The words "believe", "expect", "anticipate", "intend",
"estimate", "forecast", "project", "will", "may", "should" and similar
expressions identify forward-looking statements but are not the exclusive means
of identifying such statements. Such forward-looking statements are not
guarantees of future performance. Rather, they are based on current views and
assumptions and involve known and unknown risks, uncertainties and other
factors, many of which are outside the control of the TC Group and are difficult
to predict, that may cause the actual results, performance, achievements or
developments of the TC Group or the industries in which it operates to differ
materially from any future results, performance, achievements or developments
expressed by or implied from the forward-looking statements. Each member of the
TC Group expressly disclaims any obligation or undertaking to provide or
disseminate any updates or revisions to any forward-looking statements contained
in this announcement.
5. This announcement and the information contained herein is not for release,
publication or distribution in whole or in part in or into the United States.
These materials do not contain or constitute an offer for sale or the
solicitation of an offer to purchase securities in the United States. The
securities mentioned herein (the "Securities") have not been and will not be
registered under the U.S. Securities Act of 1933, as amended (the "Securities
Act") or any state securities laws, and may not be offered or sold within the
United States unless the Securities are registered under the Securities Act or
an exemption from the registration requirements of the Securities Act is
available.
6. This announcement is, and the Offer when made will be, only addressed to
and directed at persons in member states of the European Economic Area who are
"qualified investors" within the meaning of Article 2(1)(e) of the Prospectus
Directive (Directive 2003/71/EC) ("Qualified Investors"). In addition, in the
United Kingdom, this announcement will be distributed only to and directed only
at Qualified Investors who have professional experience in matters relating to
investments falling within Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or who are
high net worth entities falling within Article 49(2)(a) to (d) of the Order, and
other persons to whom it may otherwise lawfully be communicated (all such
persons together being referred to as "relevant persons"). Any investment
activity to which this announcement relates will be available only to relevant
persons in the United Kingdom and Qualified Investors in any member state of the
European Economic Area other than the United Kingdom, and will only be engaged
with such persons. In South Africa, the Offer will not be an "offer to the
public" as defined in the Companies Act, No 71 of 2008 ("Companies Act").
Potential investors will only be permitted to apply for Offer Shares with a
minimum total acquisition cost, per single addressee acting as principal, of
greater than or equal to R1 000 000 unless the applicant is a person, acting as
principal, whose ordinary business, or part of whose ordinary business, is to
deal in securities, whether as principal or agent (in reliance on section
96(1)(a)(i) and 96(1)(b) of the Companies Act) or such applicant falls within
one of the other specified categories of persons listed in section 96(1) of the
Companies Act.
7. Deutsche Bank AG is authorised under German Banking Law (competent
authority: BaFin - Federal Financial Supervisory Authority) and authorised and
subject to limited regulation by the Financial Services Authority. Details about
the extent of Deutsche Bank AG`s authorisation and regulation by the Financial
Services Authority are available on request. Deutsche Bank AG, London Branch is
acting exclusively for Transaction Capital and no one else in connection with
the contents of this announcement and will not be responsible to anyone other
than Transaction Capital for providing the protections afforded to clients of
Deutsche Bank AG, London Branch, nor for providing advice in relation to any
matters referred to herein.
Date: 05/06/2012 16:37:01 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.
