| Wed 21 Feb 2007, 8:00 | | AET - Alert - Abridged Prospectus |
|
JSE
AET
AET - Alert - Abridged Prospectus
Alert Steel Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/005144/06)
(JSE code: AET & ISIN: ZAE000092847)
("Alert" or "the company")
Alert Steel Holdings Limited - Abridged Prospectus
This abridged prospectus is not an invitation to the public to subscribe
for shares in Alert, 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 Alert on 16 February 2007 ("the detailed prospectus"), which is
available as set out in paragraph 8. At the date of listing the authorised
share capital of Alert comprises 500 million ordinary shares with a par
value of 0.01 cent each, of which, after a private placement of Alert
ordinary shares by way of an offer by the company for the subscription of
20 000 000 ordinary shares at an issue price of 100 cents per ordinary
share in the share capital of Alert thereby raising R20 million before
expenses and an offer for sale of 50 000 000 ordinary shares by the
existing shareholder at a price of 100 cents per ordinary share (together,
"the private placement"), 245 million shares will be in issue.
ABRIDGED PROSPECTUS
Listing of Alert ordinary shares ("shares") on JSE Limited ("the JSE").
1. INCORPORATION AND HISTORY
1.1 The business conducted by Alert Steel was established, by Wynand
Schalekamp an entrepreneur with extensive experience in the steel and
construction industries, on a part-time basis 27 years ago as a small
one-man business operating from a garage and providing a variety of
steel products to the building industry.
1.2 Alert Steel was incorporated as a private company in 1988, at which
time it acquired the abovementioned business.
1.3 In 1996 Alert Steel expanded its geographical footprint outside of
Pretoria with the acquisition of a further two retail outlets in
Pietersburg and Louis Trichardt.
1.4 The group made a strategic decision 10 years ago to diversify its
product range by adding building materials and hardware products to
its product range.
1.5 In 2001 the group again extended its product range by including
plumbing materials.
1.6 Today the group has 11 retail branches in Gauteng, the Limpopo
Province, Mpumalanga and the North West Province.
1.7 The group also has two rebar manufacturing facilities in Polokwane and
Pretoria.
1.8 Alert was incorporated as a private company on 3 March 2003 with the
name Micromatica 855 (Pty) Limited. On 25 January 2006, Micromatica
855 (Pty) Limited changed its name to Alert Steel Built It (Pty)
Limited and on 11 December 2006, Alert was converted to a public
company and changed its name to Alert Steel Holdings Limited.
1.9 With effect from 1 November 2006, the group was rationalised and
restructured with Alert acquiring 100% of the entire issued share
capital of Alert Steel, Alert Brits and Alert Tshwane, 51% of the
entire issued share capital of Alert Hazyview and 50% of the entire
issued share capital of Alert Polokwane from the existing shareholder.
2. NATURE OF THE COMPANY`S BUSINESS AND INDUSTRY
2.1 Alert, through its operating subsidiaries, conducts business as
retailers of prime steel, building materials, plumbing and hardware
products, operating 11 retail branches and 2 rebar manufacturing
plants.
2.2 The group is gradually migrating steel sales in the main to the supply
of building, plumbing materials and other hardware products.
2.3 Approximately 80% of the group`s revenue is derived from steel sales.
It is expected that by 2008 this will reduce to 60%. The group
currently sells approximately 9 500 tons of steel per month.
2.4 The group also has the capacity to manufacture rebar steel in excess
of 3 000 tons per month from the Polokwane and Pretoria operations.
3. PROSPECTS
3.1 The group`s strategy is to expand the business geographically in
Gauteng, the North West, the Limpopo Province and Mpumalanga over the
next couple of years where significant infrastructural development
will occur, with specific focus on the large infrastructural projects
such as power stations and platinum mines.
3.2 The group will also enlarge and diversify its current product range in
all the geographic areas where it currently operates to enable it to
supply a complete product range to its customers.
3.3 It is envisaged that, as part of the listing process, suitable BEE
investors will be identified to participate in the private placement.
A BEE partner will position the group favourably when tendering for
the large parastatal contracts in South Africa.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
The summarised historical and forecast financial information of Alert
for the financial year ended 30 June 2006, the financial years ending
30 June 2007 and 30 June 2008, the preparation of which is the
responsibility of the directors, are set out below. This financial
information must be read in conjunction with the independent reporting
accountants` report thereon reproduced in the detailed prospectus.
4.1.1 Extracts from the historical and forecast income statements
Aggrega Forecast Forecast
ted (3) 30 June
30 June 30 June 2008
2006 2007 R`000
R`000 R`000
Revenue (4) 469 993 618 129 764 503
Gross profit 110 331 161 630 189 526
Other income 57 - -
Operating costs (80 (113 634) (128
954) 591)
EBITDA 29 434 47 996 60 935
Depreciation (3 921) (4 550) (4 587)
Profit before interest 25 513 43 446 56 348
and taxation
Loss on disposal of non- (67) - -
current assets
Net interest (2 143) 712 3 239
(paid)/received
Profit before taxation 23 303 44 158 59 587
Taxation (7 321) (12 806) (17 280)
Profit after taxation 15 982 31 352 42 307
Outside shareholders` (1 861) (5 438) (7 069)
interest (4)
Earnings attributable to 14 121 25 914 35 238
ordinary shareholders
Reconciliation of
headline earnings:
Profit attributable to 14 121 25 914 35 238
ordinary shareholders
Loss on disposal of non- 34 - -
current assets
Headline earnings 14 155 25 914 35 238
attributable to ordinary
shareholders
Pro forma weighted 225 000 231 630 1 245 000
average shares in issue 000 37 000
on which earnings are
based (1)
Pro forma earnings per 6.3 11.2 14.4
share (cents)
Pro forma headline 6.3 11.2 14.4
earnings per share
(cents)
Notes:
(1) The pro forma weighted average number of shares in issue for
30 June 2006 is based on the sub-division and increase of
the ordinary shares in issue into 225 000 000 ordinary
shares in issue on the last practicable date as set out in
the detailed prospectus.
(2) The assumptions upon which the forecast income statements
are based are set out in the detailed prospectus.
(3) The profit forecast for 30 June 2007 includes the aggregated
results of the restructured group until 31 October 2006 and
will not be comparable to numbers that will appear in the
audited annual financial statements.
(4) Inter-company transactions and outside shareholders
interests have been accounted for in aggregated financial
information in order that the income statements prior to and
post the group restructure are comparable.
(5) The new group structure is effective from the 1 November
2006 and includes the aggregated historical audited results
of Alert Steel, Alert Brits, Alert Polokwane and Alert
Tshwane.
5. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
5.1 Full names, ages, business addresses and functions of the board of
directors of Alert
Director Age Function Business address
Wynand Frederik 57 Chairperson 12 Gompou Street,
Schalekamp ([21.6) and Managing East Lynne,
Director Pretoria, 0186
Willem Wouter 51 Financial 12 Gompou Street,
Mentz Director East Lynne,
Pretoria, 0186
Ethan Dube* 47 Non-executive Vunani House
Director Freestone Park,
135 Patricia Road,
Sandown, Sandton,
2196
Owen Vernon Jevon* 52 Non-executive Farm Rietfontein,
Director Trichardt
* Non-executive
All directors are South African citizens.
5.2 Company secretary and registered office are:
W W Mentz (CA (SA))
12 Gompou Street
East Lynne
0186
(PO Box 29607, Sunnyside, 0132)
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) 0.01
Premium per ordinary share (cents) 99.99
Number of ordinary shares offered by 20 000 000
the company for subscription in
terms of the private placement
Issue consideration to be received R20 million
by the company before expenses
Number of ordinary shares offered 50 000 000
for sale by the existing shareholder
in terms of the private placement
Total consideration to be received R50 million
by the existing shareholder
The opening and closing dates of the private placement are
as follows:
Opening date of the private Wednesday,
placement at 09:00 on 21 February 2007
Closing date of private placement at Thursday,
12:00 on 22 February 2007
Anticipated listing date on ALTx at Thursday, 1 March
commencement of trade on 2007
Note:
These dates are subject to change at the discretion of the company. Any
changes will be released on SENS.
6.2 Alert holds irrevocable undertakings from various selected investors
to subscribe for 70 000 000 shares in terms of the private placement,
amounting to 100% of the private placement shares.
6.3 The private placement of 70 000 000 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 placement has not been underwritten and is not subject to a
minimum subscription, being achieved.
7. LISTING ON THE JSE
Subject to the required spread of public shareholders in terms of the
Listings Requirements being obtained pursuant to the private
placement, the JSE has approved the listing of 245 million shares on
ALTx with effect from the commencement of business on Thursday,
1 March 2007. The shares will trade under the abbreviated name
"Alert" and the JSE code "AET" and ISIN ZAE000092847.
8. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained, during business
hours, from Wednesday, 21 February 2007, from the registered offices
of Alert, Exchange Sponsors (Pty) Limited and the transfer
secretaries, details of which are set out below:
- the registered office of the company - 12 Gompou Street, East
Lynne, 0186
- 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.
Johannesburg
21 February 2007
Designated Adviser
Exchange Sponsors (Pty) Limited
Auditors and reporting accountants
RSM Betty & Dickson (Tshwane)
Limited Assurance Provider
BDO Spencer Steward (Jhb) Inc.
Attorneys
Fluxmans Inc.
Date: 21/02/2007 08:00:03 Produced by the JSE SENS Department.
