| Mon 29 May 2006, 13:58 | | Sanyati Hodings Limited - Abridged Prospectus |
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JSE
SAN
Sanyati Hodings Limited - Abridged Prospectus
Sanyati Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1988/002538/06)
(JSE code: SAN ISIN: ZAE000081055)
("Sanyati" or "the company")
ABRIDGED PROSPECTUS
This abridged prospectus is not an invitation to the public to subscribe
for shares in Sanyati, but is issued in compliance with the Listings
Requirements of the JSE for information purposes only. The information in
this abridged prospectus has been extracted from a full prospectus issued
by Sanyati on 29 May 2006 ("the detailed prospectus"), which is available
as set in paragraph 8. At the date of listing the authorised share capital
of Sanyati comprises 1 000 million ordinary shares with a par value of
0.001 cent each, of which, after a private placement of 35 million ordinary
shares at 100 cents per share ("the placement"), 215 million shares will be
in issue.
Listing of Sanyati ordinary shares ("shares") on JSE Limited ("the JSE").
1. INCORPORATION AND HISTORY
1.1 Afriscan was established in 1988 by founding shareholder, Rick
Jackson, as a civil engineering contracting company. The company operated
in KwaZulu-Natal and Eastern Cape, and soon expanded to include a plant
hire company and a building company. Afriscan Holdings was formed in 1996
to control and administer this expanding group of companies.
1.2 Afriscan Construction was the first medium-sized company in KwaZulu-
Natal to appoint black executive directors who owned shares in the company.
By 1996, Previously Disadvantaged Individuals owned 51.4% of the shares in
Afriscan Construction through direct ownership by the Black directors and
through an employees trust.
1.3 In December 2005, the shareholders of Sanyati Holdings proposed a
listing of Sanyati and all its interests. The transaction was approved in
February 2006, resulting in a 31.75% black economically empowered company,
Sanyati Holdings, that provides construction and civil engineering
services. The company converted to a public company on 12 May 2006.
2. NATURE OF THE COMPANY"S BUSINESS AND INDUSTRY
2.1 Sanyati is one of the larger black empowered civil engineering and
construction companies in KwaZulu-Natal. The company executes projects for
a number of private clients, parastatals and government departments.
2.2 The company"s directors are the major shareholders of Sanyati, with
most of the directors having spent more than 10 years in the company"s
executive management team. The company operates from premises in Kloof,
New Germany (Pinetown), Verulam, Botha"s Hill and Richards Bay, executing
projects in KwaZulu Natal, the Eastern Cape as well as Zambia. More than
98% of the company"s work force of 1500 people is previously disadvantaged
individuals.
2.3 The Group"s audited revenues of R 260 million for the year that ended
28 February 2006 are derived equally from private and governmental
projects.
2.4 The Group"s business can be divided into the following areas:
2.4.1 Afriscan
Afriscan has vast experience in pipeline construction including water,
sewer and storm water contracts for governmental, domestic and industrial
usage. Other projects include dams, weirs, reservoirs, irrigation schemes,
pump stations and flash flood retention dams.
Afriscan also has significant experience in the construction of township
services both greenfield and in situ upgrades. Afriscan has completed low-
cost housing projects which includes infrastructure and top structure.
Afriscan contributes 47% of Sanyati"s revenues, with more than 30% of
Afriscan"s revenues earned from private clients.
2.4.2 Brisk Asphalt
Brisk Asphalt, the leading Black empowered road surfacing company in the
KwaZulu Natal region, manufactures and lays asphalt and chip and spray
products for Afriscan and other civil engineering companies. Brisk Asphalt
contributes 16% of Sanyati"s revenues, with 39% of its revenues earned from
private clients.
2.4.3 Deroma Structures
Deroma Structures specializes in heavy industrial concrete work, bridges
and culverts, concrete dams, water retaining structures, industrial
building works, concrete roads and telecommunications infrastructure
projects. Deroma Structures contributes 16% of Sanyati"s revenues, with
more than 72% of its revenues earned from private clients.
2.4.4 Sanprop
Sanprop is a wholly owned subsidiary of Sanyati and focuses on the
development of smaller customised residential developments, medium sized
commercial offices and a range of industrial projects. With more than 53%
of its revenues earned from private clients, Sanprop currently contributes
13% of Sanyati"s revenues.
2.4.5 Rusinga Building
Rusinga Building executes building projects for other subsidiaries within
the Group and the private sector. The company contributes 8% of Sanyati"s
revenues, with 44% of its revenues earned from private clients.
3. PROSPECTS
3.1 The civil engineering industry is entering a promising period, boosted
by National Government"s announcement of a R372 billion capital expenditure
budget over the next three to five years, as well as the demand for
residential and non-residential property.
3.2 Based on current market activities and the implementation of
government"s expenditure program, the South African Federation of Civil
Engineering
Contractors (`SAFCEC") estimates the growth in the sector to increase to
more than 13% per annum for the next three years. This growth figure could
be higher, given local government"s backlog on capital budget spending in
recent years which needs to be addressed.
3.3 Sanyati"s principal clients include parastatals, local government,
municipalities and large corporates that are involved in the development of
infrastructure, townships, retail developments and expansion projects. The
company has experienced an average growth rate in revenue of more than 40%
over the past three years. Its involvement in a number of projects,
locally and internationally will ensure that it achieves a high revenue
growth rate over the next three to five years.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
The historical and forecast financial information of Sanyati and its
subsidiaries for the financial year ended 28 February 2006, years ending
28 February 2007 and 28 February 2008, the preparation of which is the
responsibility of the directors, are set out below. The forecast financial
information is contained in the detailed prospectus referred to in
paragraph 4.1 below and has been reviewed and reported upon by the
reporting accountants. Such report will be contained in the detailed
prospectus and will also be available for inspection.
4.1 Extracts from the historical and forecast income statements
Audited Forecast Forecast
28 February 28 February 28 February
2006 2007 2008
R"000 R"000 R"000
Revenue (Rand) 258 958 428 157 550 278
Gross profit 29 048 55 517 69 521
Other income 9 200 2 507 3 170
Operating expenses 13 401 22 282 24 687
EBITDA 24 847 35 742 48 004
Depreciation 1 551 3 604 4 724
Profit before interest 23 296 32 138 43 280
and taxation
Net interest (paid) / (1 041) (52) (603)
received
Profit before taxation 22 255 32 086 42 677
Taxation 6 456 9 305 12 376
Earnings attributable to 15 799 22 781 30 301
ordinary shareholders
Minority interest (360) - -
Headline earnings 15 439 22 781 30 301
attributable to ordinary
shareholders
Pro foma weighted average 180 000 000 205 410 959 215 000 000
shares in issue (1)
Pro foma earnings per 8.58 11.09 14.09
share (cents)
Pro foma dividend per 0.55 - -
share (cents)
Notes:
4.2 The (unaudited) pro forma weighted average number of shares in issue
is used in order to reflect the effect of the share capital restructuring
on the earnings per share calculations
5. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
5.1 Full names, nationalities, ages, business addresses and functions of
the board of directors of Sanyati:
Director Age Occupation Business address
Richard David 50 Chief Bridelia, Sanyati Park, 3
Jackson Executive Abrey Road, Kloof, 3610
Officer
Marc Ivor Krouse 41 Financial Bridelia, Sanyati Park, 3
Director Abrey Road, Kloof, 3610
Khisore 54 Operations Unit 2, Afriscan Park, 21
Ramkissoon Director Shepstone Road, New
Germany, 3610
Moses Jabulani 44 HR director Bridelia, Sanyati Park, 3
Sangweni Abrey Road, Kloof, 3610
Hans Michael 32 Non-Executive 4th Floor, 20 Baker
Dlamini Director Street, Rosebank
Johannesburg, 2196
Nhlanhla 30 Non-Executive 10 Torsvale Crescent, La
Khambule Director Lucia Ridge, 4051
5.2 Company secretary and registered office are:
Marc Ivor Krouse - B.Comm
c/o Nexia Levitt Kirson CA (SA)
1st Floor, 215 North Ridge Road,
Morningside
Durban
4001
(PO Box 701282, Overport, 4067)
6. THE PLACEMENT
6.1 Salient features
6.1.1 The salient features of the private placement are as follows:
Offer price per ordinary share 100
(cents)
Par value per ordinary share (cents) 0.001
Premium per ordinary share (cents) 99.999
Number of ordinary shares offered in 35 000 000
terms of private placement
Issue consideration before expenses R35 million
6.1.2 The opening and closing dates of the private placement
are as follows:
Opening date of the private placement Monday, 29 May 2006
at 09:00 on
Closing date of private placement at Tuesday, 30 May 2006
12:00 on
Anticipated listing date on ALTx on Friday, 2 June 2006
Safe custody accounts at CSDP or Friday, 2 June 2006
broker updated in respect of
dematerialised shareholders on or
about
Posting of share certificates in Friday, 2 June 2006
respect of certificated shareholders
on or about
Refund of surplus private placement Friday, 2 June 2006
application monies received (where
applicable) on
Note:
These dates are subject to change at the discretion of the company. Any
changes will be released on SENS.
6.2 Sanyati holds irrevocable undertakings from various selected investors
to subscribe for 35 000 000 shares in terms of the private placement,
amounting to 100% of the private placement shares.
6.3 The private placement of 35 000 000 ordinary shares have been fully
allocated to the investors who have given irrevocable undertakings as set
out in paragraph 6.2 above.
6.4 The private placement is subject to a minimum subscription, sufficient
to meet the listing requirements of the JSE, being achieved.
7. LISTING ON THE JSE
Subject to the required spread of public shareholders in terms of the
Listings Requirements being obtained pursuant the private placement, the
JSE has granted Sanyati a listing in respect of 215 000 000 ordinary shares
on ALTx under the abbreviated name "Sanyati", share code "SAN" and ISIN
ZAE000081055, with effect from the commencement of business on Friday, 2
June 2006.
8. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained, during business
hours, prior to the closing of the private placement, from the registered
offices of Sanyati, Exchange Sponsors (Pty) Limited and the transfer
secretaries, details of which are set out below:
- the registered office of the company - 1st Floor, 215 North Ridge
Road, Morningside, Durban, 4001
- the offices of Exchange Sponsors (Pty) Limited - 39 First Road, Hyde
Park, 2196;
- the offices of Computershare Investor Services 2004 (Pty) Limited -
Ground Floor, 70 Marshall Street, Johannesburg, 2001;
- the web-site of Sanyati at www.sanyati.co.za.
Johannesburg
29 May 2006
Designated Adviser
Exchange Sponsors (Pty) Limited
Auditors and reporting accountants
PKF
Attorneys
Deneys Reitz Inc.
www.sanyati.co.za
Warning: The listing of ordinary shares in the company is on ALTx.
Investors are advised of the risks of investing in a company listed on
ALTx. Investors are advised that the JSE does not guarantee the viability
or the success of a company listed on ALTx. In terms of the Listings
Requirements, the company is obliged to appoint and retain a Designated
Adviser, which is required to, inter alia, attend all board meetings held
by the company to ensure that all the Listings Requirements and applicable
regulations are complied with, approve the Financial Director of the
company and guide the company in a competent, professional and impartial
manner. If the company fails to retain a Designated Adviser, it must make
arrangements to appoint a new Designated Adviser within 10 business days,
failing which the company faces suspension of trading of its securities.
If a Designated Adviser is not appointed within 30 days of its suspension,
the company faces the termination of its listing without the prospect of an
appropriate offer to minority shareholders.
Date: 29/05/2006 01:58:33 PM Produced by the JSE SENS Department
