| Tue 29 Aug 2006, 16:30 | | Capitec - Abridged Pre-Listing Statement |
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CPI
CPI
Capitec - Abridged Pre-Listing Statement
Capitec Bank Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/025903/06)
JSE share code: CPIP & ISIN: ZAE000083838
("Capitec" or "the company")
THIS ABRIDGED PRE-LISTING STATEMENT IS NOT AN INVITATION TO THE PUBLIC TO
SUBSCRIBE FOR CAPITEC"S PREFERENCE SHARES BUT HAS BEEN PREPARED IN TERMS
OF THE LISTINGS REQUIREMENTS OF THE JSE LIMITED ("JSE") FOR THE PURPOSES
OF PROVIDING INFORMATION AS TO THE CAPITEC PREFERENCE SHARES AND CAPITEC
ABRIDGED PRE-LISTING STATEMENT IN RESPECT OF CAPITEC"S PREFERENCE SHARES
1. INTRODUCTION
Shareholders are referred to the announcement of 22 August 2006 in
terms of which Capitec raised R160 000 045 by way of the private
placement of 1 684 211 non-cumulative, non-redeemable, non-
participating preference shares with a par value of R0,01 each ("the
preference shares") in the authorised preference share capital of the
company with selected individuals and financial institutions at a
subscription price of R95 per share ("the private placement").
2. RATIONALE
Capitec wishes to raise cost-effective permanent share capital as part
of a general capital management programme to further optimise the
capital base of the Capitec group. The funding has been earmarked for
general strategic initiatives, including possible international
expansion, expansion of infrastructure and branches locally, and to
increase Capitec"s capacity for book growth.
3. LISTING ON THE JSE
The JSE has granted Capitec a listing of 1 684 211 preference shares
as follows:
JSE sector: "Preference Shares - Preference Shares"
Abbreviated name: Capitec Pref
JSE share code: CPIP
ISIN: ZAE000083838
The listing is subject to the condition that Capitec meets the
requirements of the JSE in respect of the requisite spread of
preference shareholders, being a minimum of 50 public preference
shareholders, excluding non-public shareholders as defined in terms of
paragraph 4.25 of the Listings Requirements, who collectively hold at
least 20% of the issued preference share capital.
4. INFORMATION RELATING TO CAPITEC
4.1 History and Incorporation
Capitec, registered as a bank controlling company in terms of Section
44 (4) of the Banks Act, is the holding company of Capitec Bank, the
first new retail bank in South Africa in over two decades. Capitec
Bank focuses on providing simple, affordable and accessible banking
services to the mass market. The company was incorporated in South
Africa on 23 November 1999, registered as a bank controlling company
on 29 June 2001, and listed on the JSE on 18 February 2002. Capitec is
listed in the "Banks sector". Capitec was originally established as
Business Ventures Number 285 (Proprietary) Limited, but changed its
name to Prosimian (Proprietary) Limited effective 19 July 2000. The
company was converted to a public company on 14 June 2001,
simultaneously changing its name to Keynes Rational Limited. The
company"s name was finally changed to Capitec Bank Holdings Limited on
8 February 2002.
4.2 Group Structure
See press announcement of 30 August 2006.
4.3 Nature of the business
Capitec is registered in terms of the Banks Act as a bank controlling
company. Capitec Bank, Capitec"s banking subsidiary, focuses on
providing simple, affordable and accessible retail banking services as
more fully described below. Capitec Bank is regulated in terms of the
Banks Act by the South African Reserve Bank. As a result of the
financing it provides, the bank is also regulated by the National
Credit Regulator and the Financial Services Board. Such retail banking
services include the following:
4.3.1 Savings
Because real returns on daily savings accounts are slim, the
average South African does not save. This is a hard fact that
Capitec has addressed through offering interest rates on savings
accounts that allow its clients to experience tangible returns
regardless of the size of their deposits. South Africans must be
incentivised to save. To encourage saving, Capitec Bank offers
the lowest cost and highest interest rates in South Africa, paying
10% interest on any savings balance less than R10 000. This means
that clients earn on average three times more on their daily
savings than with any other bank. Capitec"s number of savings
clients has more than doubled during 2006 and the total value of
its retail deposits increased fourfold. Through innovative
technology banking charges are also kept to a minimum, such that
Capitec"s banking fees generally are less than half the fees of
other banks, with ATM charges fixed at R2 per transaction.
4.3.2 Loans
Capitec offers various loan products, from a term of one month to
a fixed term of up to one year (i.e. three, six and twelve
months). The provision of loans has proven to be Capitec"s primary
income generating activity. The value of loans provided in the
previous financial year increased by 27% to R2.9 billion. Short-
term personal loans are provided at the lowest rates in Capitec"s
target market. In the year to 28 February 2006, 2.7 million loans
with average size of R1 080 (2005: 2.5 million loans with average
size of R909) were advanced to clients. Because of the longer
average term of the loans, Capitec"s net loan book increased from
R208 million a year ago to R455 million.
4.3.3 Transactional Facilities
Capitec"s Global One Card, which is provided to all Capitec
customers regardless of income level, allows instant account
opening, transacting facilities, loan approvals, stop/debit
orders, interbank transfers and immediate access to loan funds.
This Maestro branded card provides clients with cost- free debit
card purchases, as well as free bank statements and balance
enquiries. In addition to its 260 branches (and a further increase
to 293 planned this year) and 228 ATM"s country wide Capitec Bank
clients also have access to low cost cash withdrawals through all
Pick `n Pay, Checkers and Shoprite points of sale, as well as full
interbank connectivity through SASWITCH, Mastercard and VISA ATMs
(both nationally and internationally).
5. PROSPECTS
Capitec has embarked on what it has termed the "Capitec revolution" in
terms of which it aims to bring simple, accessible, affordable,
personalised and efficient banking services to the vast majority of
people throughout the country - even in the most inaccessible areas,
and potentially expanding these services on an international basis. As
this vision becomes a reality, Capitec Bank will seek out further
profitable products, expand its existing and enter into new markets,
and ultimately build its brand into one associated with excellence,
innovation and integrity by the general South African banking
consumer. Capitec remains conservative in its spending philosophy and
regards liquidity management as an imperative. This approach has been
acknowledged by the debt market which has opened up considerably, and
also in Capitec having obtained an investment grade rating from
Moody"s Investors Service of Baa1.za long-term and Prime-2.za short
term. The board"s conservative approach has meant that Capitec ended
the 2006 financial year with R582 million in cash, well in excess of
its retail deposits, and, throughout the same year has had sufficient
cash to cover all current deposits.
6. DIRECTORS
The full names, ages, addresses and qualifications of the directors
are set out below:
Andre Pierre du Plessis(*) Financial Director
Age : 45
Business Address : 14 Quantum Road,
Techno Park,
Stellenbosch, 7600
Qualifications : BComm (Hons), CA(SA)
Michiel Scholtz du Pre le Roux,(*) Non-executive director
Age : 57
Business Address : 26 Rozendal Avenue,
Stellenbosch,7600
Qualifications : BComm LLB.
Desmond Lockey Non-executive director
Age : 44
Business Address : 6 Dorp Street,
Stellenbosch, 7600
Qualifications : BA (Hons) Business Management and
Administration, MBA
Merlyn Claude Mehl (Prof) Independent non-executive director
Age : 63
Business Address : 2 Upper Thistle Road,
Newlands, 7700
Qualifications : PhD (Physics)
Nonhlanhla Sylvia Mjoli-Mncube Independent non-executive director
Age : 47
Business Address : 1570 High Street,
Highgate Village,
Dainfern, 2055
Qualifications : MA City and regional planning
Johannes Fredericus Mouton(*) Non-executive chairman
Age : 59
Business Address : 1st Floor,
Ou Kollege,
35 Kerk Street,
Stellenbosch, 7600
Qualifications : BComm (Hons), CA(SA), AEP
Chris Adriaan Otto(*) Non-executive director
Age : 56
Business Address : 1st Floor,
Ou Kollege,
35 Kerk Street,
Stellenbosch, 7600
Qualifications : BComm LLB
Jan Georg Solms Independent non-executive director
Age : 51
Business Address : 153 Dorp Street,
Stellenbosch, 7600
Qualifications : BAcc, CTA, CA(SA)
Riaan Stassen(*) Chief executive officer
Age : 53
Business Address : 14 Quantum Road,
Techno Park,
Stellenbosch, 7600
Qualifications : BComm (Hons) CA(SA)
Jacobus van Zyl Smit (Dr) Non-executive director
Age : 64
Business Address : 1st Floor,
Ou Kollege,
35 Kerk Street,
Stellenbosch, 7600
Qualifications : BComm LLB, CTA, CA(SA), DComm
Notes: * Founders of the Capitec banking group.
All directors are South African
7. DETAILS OF THE PRIVATE PLACEMENT AND LISTING
8.
9.
Deemed value per share for dividend
purposes R100
Subscription price per non-
redeemable, non-cumulative, non-participating
preference share with a par value of
R0,01 each R95
Minimum rand value of subscription
per placee acting as principal R104 500
Number of preference shares offered R1 684 211
Amount to be raised in terms of the R160 000 045
private placement
Amount underwritten by underwriter R160 000 045
Date of issue of the pre-listing Wednesday, 30 August 2006
statement
Listing date (9:00) Thursday, 31 August 2006
10. SHARE CAPITAL OF CAPITEC
The authorised and issued share capital of the Capitec group before
and after the private placement are set out below:
Before the private placement: R"000
_______________________________________________________________________
Authorised share capital :
100 000 000 ordinary shares of R0,01 each 1 000
100 000 000 non-cumulative, non-redeemable,
non-participating preference shares of R0,01 each 1 000
_______________________________________________________________________
Total authorised share capital : R 2 000
______________________________________________________________________
Issued share capital :
71 928 412 ordinary shares of R0,01 each 719
______________________________________________________________________
Total issued share capital : 719
______________________________________________________________________
Share premium :
On 71 928 412 ordinary shares of R0,01 each 347 146
______________________________________________________________________
Total premium : 347 146
______________________________________________________________________
After the private placement : R"000
______________________________________________________________________
Authorised share capital :
100 000 000 ordinary shares of R0,01 each 1 000
100 000 000 non-cumulative, non-redeemable,
non-participating preference shares of R0,01 each 1 000
______________________________________________________________________
Total authorised share capital : R 2 000
______________________________________________________________________
Issued share capital :
71 928 412 ordinary shares of R0,01 each 719
1 684 211 non-cumulative, non-redeemable,
non-participating preference shares of R0,01 each 17
______________________________________________________________________
Total issued share capital : 736
______________________________________________________________________
Share premium :
On 71 928 412 ordinary shares of R0,01 each 347 146
On 1 684 211 non-cumulative, non-redeemable,
non-participating preference shares of R0,01
each net of issuing expenses of R5 366 548 154 616
_______________________________________________________________________
Total share premium : 507 762
_______________________________________________________________________
Capitec has undertaken to ensure that at any given time after the
listing of the preference shares, the percentage of the aggregate of
the total nominal value all of the preference shares in issue at such
time divided by the aggregate of the total nominal value of all of
the shares (being all ordinary and preference shares) in issue at such
time shall not exceed 24.9%, and should Capitec contemplate any
further issues of preference shares in terms whereof the
aforementioned percentage shall be exceeded, Capitec shall amend its
articles of association in order to reduce the par value of the
preference shares or increase the par value of the ordinary shares
such that the aforementioned percentage shall not be exceeded.
11. SALIENT FEATURES OF THE PREFERENCE SHARES
The preference shares are non-redeemable, non-cumulative and non-
participating. Preference dividends, if declared, shall be payable
semi-annually, not later than 120 business days after the last day of
February and 31 August, respectively. The board of Capitec has
undertaken to pay the preference share dividend within the minimum
period as stipulated by the Listings Requirements from the date of
declaration thereof. The date of declaration is anticipated to be at
the end of March and September in any given year.
9.1 Voting rights
The preference shares are non-voting, save for those circumstances
described under Section 194 of the Companies Act (61 of 1973).
Preference shareholders will only be entitled to vote during those
periods when the preference dividend, or any part thereof (if
declared), remains in arrears and unpaid after six months from the
relevant preference share dividend payment date or when a resolution
of Capitec is proposed which resolution directly affects the rights
attached to the preference shares or the interests of the preference
shareholders, including a resolution for the winding-up of Capitec or
for the reduction of its capital.
9.2 Entitlement to dividends
9.2.1 When the board of Capitec or the company in general meeting
declares a dividend, preference shareholders will be entitled
to receive dividends in priority to any payment of dividends to
the holders of ordinary shares in the capital of the company.
9.2.2 The preference dividend shall be calculated by multiplying the
deemed value of the preference shares by 75% of the prime rate
(determined on a 365-day year factor, irrespective of whether
the year is a leap year or not), on a daily basis, in arrear,
but never compounded, for the period from the date following a
preference dividend calculation date until and including the
preference dividend calculation date immediately following.
9.2.3 Preference dividends will rank in priority to any payment of
dividends to the holders of any other class of shares in the
share capital of the company not ranking prior to or pari passu
with the preference shares. All preference shares issued, or to
be issued, will rank pari passu with each other.
9.2.4 The preference dividend calculation dates shall be the last day
of February and 31 August of each year. There is no time limit
after which the preference share dividend, if declared, lapses.
There are no arrangements in place whereby future dividends are
to be waived or agreed to be waived. The first dividend
payment, in respect of the first tranche of preference shares
issued, shall be calculated from the issue date up to and
including 28 February 2007. An ordinary dividend will not be
declared unless the preference dividend has been declared.
Preference dividends not declared will not accumulate.
9.2.5 Consents required for variation of rights
Rights attaching to the preference shares may not be modified,
amended, added to or abrogated without the prior written
consent of at least 75% of the preference shareholders or the
prior sanction of a resolution passed at a separate class
meeting of preference shareholders in the same manner mutatis
mutandis as a special resolution.
9.2.6 Changes to tax status
If there is an amendment or amendments to the Income Tax Act
which results in the preference dividends being taxable in the
hands of the preference shareholders and which results in
payment of the preference dividend becoming a deductible
expense for the company, provided such amendment is uniformly
applicable to all corporate taxpayers and not only because of
the particular circumstances of the company or any preference
shareholder, the percentage of the preference dividend rate
will be increased by the company. Such increase will be equal
to the lower of the reduced cost for the company or the
uniformly reduced income in the hands of corporate taxpayers,
which cost savings or reduced income would not have arisen 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 amendment shall be made to the
percentage of the preference dividend rate. The company shall
require its auditors to verify whether it is obliged to
increase the percentage of the preference dividend rate. The
auditors in deciding whether such increase is required in terms
of this article shall act as experts and not as arbitrators or
quasi-arbitrators and their decision in the absence of manifest
error shall be final and binding on the company and all
preference shareholders. The costs of such auditors shall be
borne and paid by the company.
The entire terms and conditions of the preference shares, as set out in
the articles of association of Capitec, are set out in the pre-listing
statement to be issued on or about Wednesday, 30 August 2006.
12. COPIES OF THE PRE-LISTING STATEMENT
Copies of the pre-listing statement can be obtained during normal
business hours from 12:00 on Wednesday, 30 August 2006 at the
registered office of Capitec at 10 Quantum Road, Techno Park,
Stellenbosch as well as at Building 8, Woodmead Estate, 1 Woodmead
Drive, Woodmead, Johannesburg or is available on the Capitec Bank
website at www.capitecbank.co.za.
29 August 2006
Stellenbosch
PSG Capital Limited: Corporate Adviser and Joint Sponsor
BDO Questco (Proprietary) Limited: Lead Sponsor
Jan S. de Villiers Attorneys: Legal Advisers
PricewaterhouseCoopers Chartered Accountants (SA)
Registered Accountants and Auditors: Auditors
Date: 29/08/2006 04:30:12 PM Produced by the JSE SENS Department
