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PMA PMN
PMA
Primedia Limited - Abridged Pre-Listing Statement
Primedia Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/003355/06)
Share code: PMA & ISIN: ZAE000035119
Share code: PMN & ISIN: ZAE000035127
Preference share code: PMAP & ISIN: ZAE000080529
("Primedia" or "the Company")
ABRIDGED PRE-LISTING STATEMENT
THIS PRE-LISTING STATEMENT IS NOT AN INVITATION TO THE PUBLIC TO SUBSCRIBE
FOR SECURITIES, BUT IS ISSUED IN COMPLIANCE WITH THE LISTINGS REQUIREMENTS
OF THE JSE LIMITED, FOR THE PURPOSE OF PROVIDING INFORMATION TO THE PUBLIC
WITH REGARD TO THE COMPANY
1. Introduction
The board of directors of Primedia has resolved to raise R150 million
in equity through the private placement of 1 500 000 non-redeemable,
cumulative, non-participating Primedia preference shares with a par
value of R0,0002 each at a subscription price (including premium) of
R100,00 per preference share.
Primedia has concluded an agreement with FirstRand Bank, acting
through its Rand Merchant Bank division ("RMB") and Nedbank Capital, A
division of Nedbank Limited ("Nedbank Capital") ("joint
underwriters"), whereby the joint underwriters have agreed to
underwrite the issue of 1 500 000 preference shares to be issued in
terms of the private placement at a subscription price of R100.00 each
("the private placement"). In terms of the underwriting agreement, RMB
and Nedbank Capital are entitled to withdraw from underwriting at any
time prior to 12:00 on 15 May 2006, under certain material adverse
changes.
2. Rationale
Primedia wishes to raise cost-effective permanent share capital as
part of a general capital management programme and to obtain funding
for strategic initiatives of the Company. More specifically, the
proceeds of the private placement will enable the company to attain a
more optimal capital structure which, in the opinion of the directors,
is deemed appropriate for the activities of the Company.
3. The private placement and Listing on the JSE Limited ("JSE")
3.1 Particulars of the private placement
Prior to the issue of this abridged pre-listing statement, 1 500 000
preference shares were placed with selected investors at a
subscription price of R100 per share.
Subscription price per preference R
share (including premium) 100
Minimum Rand value of subscription per R100 000
applicant acting as principal
Number of preference shares offered 1 500 000
Amount to be raised in terms of the R150 000 000
Private Placement
3.2 Listing on the JSE Limited ("JSE")
The JSE has granted Primedia a listing on the JSE of
1 500 000 preference shares as follows:
Listing time and date: 09h00 on Tuesday 16 May 2006.
(The proposed listing date is subject to change. Any changes will be
published on SENS and in the press.)
JSE sector: "Preference Shares - Preference Shares"
Abbreviated name: "PRIMEDIA PREF"
Share code: PMAP
ISIN: ZAE 000080529
The listing is subject to the condition that Primedia meets the
requirements of the JSE in respect of the requisite spread of Primedia
preference shareholders, being a minimum of 50 public preference
shareholders, collectively holding at least 20% of the Primedia preference
shares, excluding non-public preference shareholders as defined in
paragraph 4.25 of the Listing Requirements of the JSE.
Shareholders of Primedia have passed the necessary resolutions relating to
the creation and issue of the preference shares.
4. Salient features of the preference shares
The preference shares are non-redeemable, cumulative and non-
participating beyond the entitlement to the preference share
dividends. The terms relating to voting rights, entitlement to
dividends, changes to the prime rate and changes in tax status are
summarised below.
4.1 Voting rights
The preference shares are non-voting, save that preference
shareholders will be entitled to vote at a general meeting of the
Company if one or more of the following circumstances prevail at
the date of such meeting:-
during any period determined as provided in section 194(2) of the
Companies Act, 1973 (Act 61 of 1973), as amended, in which any
dividend or any part of any dividend on the preference shares
remains in arrear and unpaid; or
a resolution of Primedia is proposed which directly affects the
rights attached to the preference shares or the interests of the
holders of the preference shares.
4.2 Entitlements to dividends
Preference shareholders will receive, if declared, dividends out
of the profits or reserves of Primedia payable on a preference
dividend payment date, which is intended to be, in respect of the
first preference dividend, not later than 30 September 2006, and
thereafter not later than 31 March and 30 September of each year.
The preference dividend for each of the preference shares shall
be calculated in arrear in accordance with the following formula:
A = B x C x R100
365
Where:
A = The preference dividend per preference
share;
B = 75% of the average daily prime rate which
prevailed in respect of the relevant
period for which the dividend is
calculated (as contemplated in paragraph
4.3 below, but subject to paragraph 4.4);
C = the number of days of the relevant period
for which the dividend is calculated.
The preference share dividend shall be calculated in accordance
with the formula above from the day following the last preference
dividend payment date or the issue date as applicable for the
first period, to and including the subsequent preference dividend
payment date. Save that, if there are accumulated dividends,
whether declared or not, that remain unpaid for a period of more
than 7 (seven) months after the issue date, or the last
preference dividend payment date, if later, the preference
dividend shall continue to be calculated in accordance with the
formula above, save that "B" shall be increased to 100% (one
hundred per cent) of the prime rate, for the period from the
expiration of the 7 (seven) month period to the subsequent
preference dividend payment date.
For so long as "B" is 100%, no distribution or dividend will be
paid to ordinary and N ordinary shareholders and the Company will
not be entitled to repurchase any of its issued ordinary or N
ordinary shares.
4.3 Changes to the prime rate
In respect of any preference dividend declared, in the
application of the formula in paragraph 4.2 above:
the actual daily prime rate which prevailed over the period from
the day following the last dividend payment date to the day
immediately preceding the declaration date will be applied for
the period in calculating the relevant preference dividend; and
the prime rate which prevailed on the day immediately preceding
the date on which the dividend is declared, if it is so declared,
will be applied to the dividend period from the declaration date
to dividend payment date. The effect of the aforementioned is
that the preference dividend will not be adjusted for any changes
in the prime rate between the day before the dividend declaration
date, if a dividend is so declared, and the dividend payment
date. Primedia undertakes that the period between the dividend
declaration date and the dividend payment date will not exceed 30
business days.
4.4 Changes to tax status
In terms of the Income Tax Act, 1962 (Act 58 of 1962), as
amended, the preference dividends paid on the preference shares
are exempt from income tax in the hands of the preference
shareholder. If there is an amendment or amendments to the Income
Tax Act that results in the preference dividends being taxable in
the hands of the preference shareholders and which results in the
payment of preference dividends becoming a deductible expense for
the Company, provided such amendment is uniformly applicable to
all corporate tax payers and not only because of the particular
circumstances of the Company or any preference shareholder, the
percentage of the prime rate will be increased by the Company in
the application of the formula in paragraph 4.2 above. Such
increase will be limited to the extent that the Company incurs
reduced costs in servicing the preference shares, which cost
savings it would not have obtained but for such amendments to the
Income Tax Act.
If such amendments to the Income Tax Act do not result in the
Company incurring reduced costs in servicing the preference
shares, then, notwithstanding that such amendment may result in a
decrease in the after-tax returns of any preference shareholder
on its holding of preference shares, no change shall be made to
the percentage of the prime rate.
4.5 Variation of rights
The terms of the preference shares may not be modified, altered,
varied, added to or abrogated without the prior written consent
of at least three-fourths of the preference shareholders or the
prior sanction of a resolution passed at a separate class meeting
of the preference shareholders in the same manner, mutatis
mutandis, as a special resolution.
The entire terms and conditions of the preference shares, as set
out in the articles of association of Primedia, have been
included in Annexure 2 to the Pre-listing statement.
5. Information relating to Primedia Limited
5.1 Incorporation
Primedia was incorporated in South Africa on 18 June 1993 and was
listed on the JSE on 19 November 1993 under the name Primequity
Limited. In 1995, the Company changed its name to Primedia
Limited.
5.2 Background
Primedia is a leading South African media group, which has an
established portfolio of businesses that cover advertising,
content and one to one marketing. These businesses have leading
positions in the markets in which they operate.
Primedia"s advertising businesses are located principally in
South Africa and span both the traditional and non-traditional
media sectors. This mix strategically positions Primedia well,
as advertisers attempt to reach an increasingly fragmented and
diverse audience. The businesses enjoy a high degree of
exclusivity, derived from regulated rights to various delivery
platforms, which contributes to their attractive operating
margins.
The Company"s content businesses currently comprise of filmed
entertainment and electronic games. Filmed entertainment
included the Company"s cinema exhibition, film distribution and
home entertainment interests.
The recently launched Primedia Unlimited division focuses on new,
growing advertising and content sectors.
The Company"s strategy is to invest in:
- media assets that have significant rights exclusivity,
critical mass, and which target customers with higher
spending capacity;
- media sectors that show long-term growth, which are
synergistic and have complementary economic cycles.
Key elements of the Company"s strategy are summarised as follows:
- continued focus on growth, organically and through
innovation, acquisitions and geographic expansion into the
rest of Africa;
- investment in new high-growth media sectors;
- creating a greater diversity of assets; and
- maximisation of cashflow.
5.3 Directors
A P Nkuna Chairman
Appointed: 18 May 2000
Age: 53
Business 29 Queens Road
Address: Parktown
2193
W Kirsh Chief Executive Officer
Appointed: 1 July 1993
Age: 45
Business Primedia Place
Address: 5 Gwen Lane
Sandton
2196
Qualifications: BCom, BAcc, CA(SA), HDip Tax Law
O Ighodaro Chief Financial Officer
Appointed: 1 September 2001
Age: 43
Nationality Nigerian / British
Business Primedia Place
Address: 5 Gwen Lane
Sandton
2196
Qualifications: BSc(Hons), FCA (England and Wales)
K Pillay Executive Director and CEO - Advertising
Division
Appointed: 19 November 1998
Age: 44
Business Primedia Place
Address: 5 Gwen Lane
Sandton
2196
Qualifications: BA, LLB, MCJ
F A Gazendam Executive Director and CEO - Content
Division
Appointed: 18 February 2000
Age: 47
Business Primovie Park
Address: 185 Katherine Street Eastgate
Sandton
2143
Qualifications: BCom(Hons), CA(SA)
M J Bosman Independent Non-Executive Director
Appointed: 20 September 2002
Age: 44
Business 51 Wierda Road West
Address: Wierda Valley
Sandton
2196
Qualifications: BCom(Hons), LLM, CA(SA), AMP
N J M Canca Independent Non-Executive Director
Appointed: 29 August 2003
Age: 40
Business 1 President Street
Address: Newtown
Johannesburg
2001
Qualifications: BA (Political Science and Economics)
H M Khoza Independent Non-Executive Director
Appointed: 20 September 2002
Age: 58
Business Shangai House
Address: 53 Wierda Road West
Wierda Valley
Sandton
2196
Qualifications: BSc
I Kirsh Non-Executive Director
Appointed: 6 April 1995
Age: 71
Business Primedia Place
Address: 5 Gwen Lane
Sandton
2196
H M Madima Non-Executive Director
Appointed: 20 September 2002
Age: 42
Business 29 Queens Road
Address: Parktown
2193
Qualifications: BA(Hons), MA (Accounting and Financial
Economics)
P Maw Non-Executive Director
Appointed: 1 July 1993
Age: 44
Business 3rd Floor
Address: Mariendahl House
Newlands on Main
Main Road
Newlands
7700
Qualifications: BCom(Hons), CA(SA), HDip Tax Law
K Motaung Non-Executive Director
Appointed: 25 February 2005
Age: 61
Business Chiefs Village
Address: 5/6 Lenaron Road
Naturena
2064
C S Seabrooke Independent Non-Executive Director
Appointed: 1 July 1993
Age: 52
Business Block 4
Address: Four Commerce Square
39 Rivonia Road
Sandhurst
2196
Qualifications: BCom, BAcc, MBA, FCMA
B J T Shongwe Independent Non-Executive Director
Appointed: 1 January 1999
Age: 50
Business 1 Raikes Road
Address: Braamfontein
Johannesburg
2001
Qualifications: BA (Econ), MBA, ACIS, FCIBM
S V Zilwa Independent Non-Executive Director
Appointed: 20 September 2002
Age: 38
Business Building 1
Address: Leo Burnett House
3 Simba Road
Sunninghill
2157
Qualifications: BCompt(Hons), CA(SA)
6. Share capital of Primedia
6.1 Authorised and issued share capital
The authorised and issued share capital of Primedia, before and
after the Private Placement, assuming that preference shares with
an aggregate value of R150 000 000 are allotted and issued, are
set out below.
Before the private placement
R 000
Authorised share capital
100 000 000 ordinary shares of R0,02 2 000
each
200 000 000 N ordinary shares of R0,0002 40
each
5 000 000 non-redeemable, cumulative, 1
non-participating preference shares of
R0,0002 each(1)
Total authorised share capital 2 041
Issued share capital
52 086 276 ordinary shares of R0,02 each 1 042
184 541 569 N ordinary shares of R0,0002 37
each
1 079
Less: Shares held by the Primedia Trust
304 747 ordinary shares of R0,02 each (6)
7 753 778 N ordinary shares of R0,0002 (2)
each
Total issued share capital 1 071
Share Premium
Gross premium, less issue expenses and 502 091
intangibles written-off
Premium on share buy-backs and shares (48 109)
held in The Primedia Trust
Distribution to shareholders (269 055)
Total share premium 184 927
1 Creation of 5 000 000 non-redeemable, cumulative, non-
participating shareholders held on 4 May 2006.
After the private placement
R 000
Authorised share capital
100 000 000 ordinary shares of R0,02 2 000
each
200 000 000 N ordinary shares of R0,0002 40
each
5 000 000 non-redeemable, cumulative, 1
non-participating preference shares of
R0,0002 each
Total authorised share capital 2 041
Issued share capital
52 086 276 ordinary shares of R0,02 each 1 042
184 541 569 N ordinary shares of 37
R0,0002 each
1 500 000 non-redeemable, cumulative, -
non-participating preference shares of
R0,0002 each
1 079
Less: Shares held by the Primedia Trust
304 747 ordinary shares of R0,02 each (6)
7 753 778 N ordinary shares of R0,0002 (2)
each
Total issued share capital 1 071
Share Premium
Gross premium, less issue expenses and 502 091
intangibles written-off
Premium on share buy-backs and shares (48 109)
held in the Primedia Trust
Distribution to shareholders (269 055)
1 500 000 non-redeemable, cumulative, 143 392
non-participating preference shares of
R0,0002 each less issue expenses
Total share premium 328 319
7. Copies of the Pre-listing statement
Copies of the Pre-listing statement can be obtained during normal
business hours from the date of issue of this Pre-listing statement up
to and including Wednesday, 31 May 2006, from:
the registered office of Primedia
6th Floor
Primedia Place
5 Gwen Lane
Sandton 2196
(PO Box 652110, Benmore, 2010)
or
the joint adviser, arranger and underwriter of the Primedia preference
share issue
RMB
1 Merchant Place
Corner Fredman Drive and Rivonia Road
Sandton
or
the joint adviser, arranger and underwriter of the Primedia preference
share issue
Nedbank Capital
Corporate Place
135 Rivonia Road
Sandton
the corporate law advisers to Primedia
Edward Nathan (Proprietary) Limited
150 West Street
Sandton
or
the sponsor
Investec Bank Limited (Limited
100 Grayston Drive
Sandton
Alternatively, an electronic copy of the Pre-listing statement can be
obtained from www.primedia.co.za.
Johannesburg
11 May 2006
Joint adviser, Joint adviser, Corporate law Sponsor
arranger and arranger and advisers
underwriter underwriter
Rand Merchant NEDBANK EDWARD NATHAN INVESTEC BANK
Bank (A division CAPITAL LIMITED
of FirstRand
Bank Limited)
Date: 11/05/2006 04:29:31 PM Produced by the JSE SENS Department
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