| Fri 24 Nov 2006, 12:12 | | Zeder - Abridged pre-listing statement in respect |
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JSE
ZED
Zeder - Abridged pre-listing statement in respect of Zeder"s ordinary shares
Zeder Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/019240/06)
JSE share code: ZED & ISIN: ZAE000088431
("Zeder" or "the company")
THIS ABRIDGED PRE-LISTING STATEMENT IS NOT AN INVITATION TO THE PUBLIC TO
SUBSCRIBE FOR ZEDER ORDINARY 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 COMPANY, THE PRIVATE PLACEMENT AND THE SHARE
SWAPS. THE INFORMATION SET OUT BELOW HAS BEEN EXTRACTED FROM THE DETAILED
PRE-LISTING STATEMENT WHICH SHOULD BE READ IN ITS ENTIRETY FOR A FULL
APPRECIATION OF ZEDER.
ABRIDGED PRE-LISTING STATEMENT IN RESPECT OF ZEDER"S ORDINARY SHARES
1. INTRODUCTION
Shareholders are referred to the announcement of 5 October 2006 in which
Zeder announced the completion of its private placement of 350 125 000 of its
ordinary shares with a par value of R0.01 each in the share capital of the
company ("ordinary shares") with select investors at R2 per share during the
course of September 2006, and the raising of R700 250 000 in this manner
("the private placement"). Zeder received irrevocable undertakings to
subscribe in excess of R1.2 billion in respect of the private placement. The
directors however resolved to accept only R700 250 000. Simultaneously with
such private placement, Zeder exchanged 16 657 629 ordinary shares with
select investors at R2 per share for shares in various unlisted agri-
companies forming the basis of its investment portfolio in the agricultural,
food, beverages, grain and related industries ("the agri-companies") to the
value of R33 315 258 ("the first share swap"). Zeder has subsequently
concluded a further round of share swaps during the course of October 2006 in
terms of which it exchanged 1 967 847 ordinary shares at R2.20 per share for
shares in the agri-companies to the value of R4 329 263 ("the second share
swap") (the "first and second share swap" collectively referred to as "the
share swaps"). In addition to the share swaps, Zeder has and will continue to
acquire shares and/or assets in the agri-companies ("the further
acquisitions").
PSG Group Limited ("PSG") established Zeder with the express purpose of
housing its investments in the agri-companies and of listing such entity on
the JSE so as to allow investors the opportunity to share in a diversified
portfolio of agri-related assets in unlisted companies generally associated
with high barriers of entry, but all capable of commercially attractive
returns in the long term.
Zeder"s current investment portfolio is more fully set out in the pre-listing
statement which will be posted to shareholders on Monday, 27 November 2006.
2. RATIONALE
The rationale for Zeder"s establishment and listing can be summarised as
follows:
- By acquiring an indirect interest in a diversified portfolio, investors
effectively spread their risk;
- As a listed entity, Zeder will offer investors liquidity as opposed to
the often limited tradability experienced in the "over the counter
market" or trading rooms where the underlying shares in the agri-
companies are traded;
- The listed market price of Zeder will contribute to eliminating the
liquidity discount encountered with such underlying shares and should
reflect the fair value of such investments;
- PSG believes that the agricultural sector remains largely untapped,with
those agri-companies forming the basis of Zeder"s investment portfolio
having promising asset values and delivering positive dividend streams
to their shareholders;
- PSG has gained invaluable knowledge and insight in investing in the agri-
companies, as this has been part of its own strategy in the past few
years. Such experience will be placed at the disposal of Zeder, in a
management capacity, through PSG which is mandated to manage Zeder"s
assets ("Zeder Manco"). The members of the investment committee of
Zeder Manco are indicated in 5 below.
3. LISTING ON THE JSE
The JSE has granted Zeder a listing of a maximum of 571 318 855 ordinary
shares with effect from the commencement of trade on Friday, 1 December 2006
as follows:
JSE sector: General Financial - "Speciality Finance"
Abbreviated name: Zeder
JSE share code: ZED
ISIN: ZAE000088431
The listing is subject to the condition precedent that Zeder is able to
fulfil the spread requirements of the JSE in respect of ordinary
shareholders, namely a minimum of 500 public ordinary shareholders, and that
at least 20% of the issued ordinary share capital be held by public
shareholders. As at 14 November 2006, Zeder had over 1 513 ordinary
shareholders, of whom 1 507 are regarded as public shareholders and who
collectively hold 64% of the company"s issued ordinary share capital.
4. PROSPECTS
The directors of Zeder regard its value-oriented and contrarian investment
approach as vital in generating attractive long term investment returns due
to the highly cyclical nature of the agricultural environment.
The aforementioned approach means, inter alia, identifying and investing in
those agri-companies with high asset values but which have yet to tackle the
industry consolidation and transformation that has characterized the
agricultural sector over the past few years. Such transformation has
resulted in a shift from producer focussed co-operatives to public companies
where shareholders have benefited substantially. Such approach will be in
line with that previously adhered to by PSG in its agricultural investment
strategy.
Zeder may become a shareholder of reference and a source of capital for such
agri-companies.
5. DIRECTORS
The full names, ages, addresses and qualifications of the directors are set
out below:
Johannes Fredericus Mouton * #
Capacity: Chairman
Age: 60
Appointed: 21 August 2006
Business Address: 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
Qualifications: BComm (Hons), CA (SA), AEP
Directorships: Non-executive chairman of Capitec Bank Holdings Limited,
executive chairman of PSG Group and non-executive
director of Steinhoff International Holdings Limited.
Summary of curriculum Mr Mouton is the founder of PSG Group. He also serves as
vitae: a trustee of trusts and investment funds of Stellenbosch
University. Prior to the establishment of PSG Group
Limited, he co-founded and served as managing director of
the stock broking firm SMK. He was directly involved in
the establishment of both Capitec Bank Limited and Zeder.
Chris Adriaan Otto * #
Capacity: Non-executive director
Age: 57
Appointed: 21 August 2006
Business Address: 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
Qualifications: BComm, LLB
Directorships: Executive director of PSG Group Limited, non-executive
director of Capitec Bank Holdings Limited, and Channel
Life Limited.
Summary of curriculum Mr Otto has been an executive director of PSG Group
vitae: Limited since 1996. He has been directly involved in the
establishment of Capitec Bank Limited and Zeder. He has
played an integral role in the establishment and
management of PSG Group and its various operating
subsidiaries. Such operating subsidiaries have engaged in
investment activities (for example, PSG"s pursuing its
agricultural investment strategy that culminated in the
establishment of Zeder) which Mr Otto has overseen and
advised on. Mr Otto was also key in the establishment of,
what used to be, PSG Investment Bank. He sat on various
committees in respect of the aforementioned bank which
related directly to advising on and managing the bank"s
investments.
Antonie Egbert Jacobs #
Capacity: Chief Executive Officer
Age: 42
Appointed: 1 September 2006
Business Address: 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
Qualifications: BAcc, BCompt (Hons), CA(SA), MComm (Tax), LLB
Directorships: Non-executive of various private companies.
Summary of curriculum Mr Jacobs is a qualified chartered accountant with many
vitae: years experience in an investment management capacity in
the agricultural sector. Mr Jacobs was the managing
director of KLK Landbou Limited for 3 years which has a
range of investments in the meat industry, motor car
dealerships and retail garages. He has sat on the boards
of various investment holding companies with diversified
interests, such as Winecorp Limited (where he was the
financial director) and Spier Holdings (which has
investments in the hotel and leisure industries, farming
and property development). Prior to that, he was the
executive head of financial re-engineering at BOE Bank.
He also previously lectured tax and accountancy, as a
senior lecturer, at the University of Stellenbosch.
Michiel Scholtz du Pre le Roux
Capacity: Non-executive director
Age: 57
Appointed: 1 September 2006
Business Address: 26 Rozendal Avenue, Stellenbosch, 7600
Qualifications: BComm, LLB
Directorships: Non-executive director of Capitec Bank Holdings Limited
and Capitec Bank Limited.
Summary of curriculum Mr Le Roux was managing director of Distillers
vitae: Corporation (SA) Limited from 1979 to 1993, and from 1995
to 1998 managing director of Boland Bank Limited, NBS
Boland Limited and BoE Bank Limited. Mr Le Roux is one of
the founding members of Capitec Bank Limited.
Johan Georg Carinus
Capacity: Non-executive director
Age: 57
Appointed: 1 September 2006
Business Address: Fransmanskraal, Devon Valley, Stellenbosch, 7600
Qualifications: BComm
Directorships: Non-executive director of Distell Limited.
Summary of curriculum Mr Carinus is a grape farmer from Stellenbosch and serves
vitae: on the board of Het Jan Marais Fund. Mr Carinus also
served on the boards of KWV Limited from 1990 to 2003,
the Stellenbosch Farmers" Winery from 1994 to 2000, the
Stellenbosch Vineyards from 1996 to 2004 and Rand
Merchant Bank from 1982 to 1998.
Lambert Phillips Retief
Capacity: Non-executive director
Age: 54
Appointed: 7 November 2006
Business Address: 425 Boschenmeer Estate, Paarl, 7620
Qualifications: BComm Hons, CA(SA), OPM (HBS)
Directorships: Executive chairman of Paarl Media Holdings (Proprietary)
Limited, director of Media24 Limited.
Summary of curriculum Mr Retief is a qualified accountant and has been involved
vitae: in the printing and publishing business since 1978. He is
a past chairman of the Provincial Press Association and
current president of the Printing Industry Federation of
South Africa. He is also a director of various investment
companies.
* Founding directors of Zeder
# Member of Zeder investment committee
Chairman of audit committee
All of the directors of Zeder are South African.
6. SHARE CAPITAL OF ZEDER
The authorised and issued share capital of Zeder, before the private
placement, share swaps and further acquisitions and thereafter is set out
below.
Before the private placement, share swaps and further acquisitions
Rand
Authorised share capital
1 500 000 000 ordinary shares with a par value of 15 000 000
R0.01 each
250 000 000 cumulative, non-redeemable, non- 2 500 000
participating preference shares with a par value of
R0.01 each
Total authorised share capital 17 500 000
Issued share capital
174 870 962 ordinary shares with a par value of R0.01 1 748 710
each
Nil cumulative, non-redeemable, non-participating
preference shares with a par value of R0.01 each Nil
Share premium 347 993 214
Total issued share capital 349 741 924
After the private placement
Rand
Authorised share capital
1 500 000 000 ordinary shares with a par value of 15 000 000
R0.01 each
250 000 000 cumulative, non-redeemable, non- 2 500 000
participating preference shares with a par value of
R0.01 each
Total authorised share capital 17 500 000
Issued share capital
524 995 962 ordinary shares with a par value of R0.01 5 249 960
each
Nil cumulative, non-redeemable, non-participating
preference shares with a par value of R0.01 each Nil
Share premium 1 044 741 964
Total issued share capital 1 049 991 924
After the private placement, share swaps and further acquisitions
Rand
Authorised share capital
1 500 000 000 ordinary shares with a par value of 15 000 000
R0.01 each
250 000 000 cumulative, non-redeemable, non- 2 500 000
participating preference shares with a par value of
R0.01 each
Total authorised share capital 17 500 000
Issued share capital
571 318 855 ordinary shares with a par value of R0.01 5 713 189
each
Nil cumulative, non-redeemable, non-participating
preference shares with a par value of R0.01 each Nil
Share premium 1 142 857 574
Total issued share capital 1 148 570 763
7. FINANCIAL INFORMATION
7.1 Audited balance sheet as at 31 October 2006
Audited at 31 October 2006
R"000
Balance sheet
ASSETS
Financial assets
Equity securities 602 954
Receivables 4
Cash and cash equivalents 612 364
Total assets 1 215 322
EQUITY AND LIABILITIES
Capital 1 203 055
Share capital 5 665
Share premium 1 130 671
Retained earnings 66 719
Non-current liabilities 12 267
Financial liabilities
Deferred income tax 9 795
Trade and other payables 1 465
Current income tax liabilities 1 007
Total equity and liabilities 1 215 322
7.2 Profit forecast for the four month period ending 28 February 2007 and
the year ending 29 February 2008
The table below sets out the profit forecasts of Zeder for the four
months ending 28 February 2007 and for the year ending 29 February 2008,
which must be read in conjunction with the independent reporting
accountants" report thereon as set out in the pre-listing statement.
The profit forecast has been compiled using the accounting policies of
Zeder as set out in the report of the historical financial information
in the pre-listing statement.
Four months Twelve months
ending ending
February 2007 29 February 2008
R"000 R"000
Investment income 25 495 66 775
Fair value gains and losses 25 467 100 235
on financial instruments
Total revenue 50 962 167 010
Operating expenses (5 069) (19 299)
Net profit before taxation 45 893 147 711
Taxation (8 912) (27 894)
Net profit attributable to 36 981 119 817
ordinary shareholders
Number of ordinary shares in 571 319 571 319
issue ("000)
Weighted average number of 569 407 571 319
ordinary shares in issue
("000)
Headline earnings per share 6.49 20.97
Distribution per ordinary - 1.43
share (cents)
Notes:
Assumptions utilised in the profit forecast, and which are considered by
management to be significant, are disclosed below. However, the
assumptions disclosed are not intended to be an exhaustive list.
The forecasts incorporate the following material assumptions in respect
of revenue and expenses that can be influenced by the directors of
Zeder:
- Irrevocable undertakings received in terms of the first share swap
and second share swap which have not been effected as at 31 October
2006, were assumed to have been effected on Friday, 1 December
2006.
- Further acquisitions of shares in companies already included in the
investment portfolio as of 31 October 2006 have been assumed.
Target acquisitions set by Zeder have been assumed to occur evenly
throughout the period ending 28 February 2007 and the year ending
29 February 2008.
- Distribution of 100% of all cash dividend income received.
- Save for the shares issued as contemplated in respect of the share
swaps and further acquisitions, no further ordinary shares will be
issued during the forecast periods under review.
- Management fee comprises of a base fee of 2% on the net asset value
of the company less cash held per annum, 0.15% of all cash held,
and a performance fee of 10% of returns in excess of the benchmark
level.
The forecasts incorporate the following material assumptions in respect
of revenue and expenses that cannot be influenced by the Zeder
directors:
- Additional acquisitions of investments have been assumed to be
acquired at the share prices prevailing as at the respective
acquisition dates. For purposes of estimating future share prices,
individual share prices have been assumed to grow at 4% as from 31
October 2006 to 28 February 2007, and 12% as from 28 February 2007
to 29 February 2008. Future growth in share prices has been based
on the average historical 11-year compound annual growth rate of
the benchmark index as defined in the pre-listing statement.
- Dividends receivable on investments have been forecast to accrue at
the latest historical individual companies" dividend yields.
- Interest receivable on cash balances has been calculated based on
the BESA 30-year yield curve as of 23 October 2006.
- Interest earned on cash balances is taxed at the current corporate
tax rate of 29%.
- Deferred tax has been provided at the CGT rate of 14.5% based on
market to market revaluations of the investments.
- STC of 12.5% is payable on net dividends declared by Zeder.
8. COPIES OF THE PRE-LISTING STATEMENT
Copies of pre-listing statement can be obtained during normal business hours
from 12:00 on Monday, 27 November 2006 at the registered office of Zeder at
1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch and at Building 8,
Woodmead Estate, 1 Woodmead Drive, Woodmead, Johannesburg.
24 November 2006
Stellenbosch
PSG Capital Limited: Corporate Adviser and Joint Sponsor
BDO Questco (Proprietary) Limited: Lead Sponsor
Hofmeyr Herbstein & Gihwala Inc.: Legal Advisers
PricewaterhouseCoopers Inc.: Independent Reporting Accountants and Auditors
Date: 24/11/2006 12:12:27 PM Produced by the JSE SENS Department
