| Wed 28 Feb 2007, 7:00 | | SOH - South Ocean Holdings Limited - Abridged Pre- |
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SOH
SOH - South Ocean Holdings Limited - Abridged Pre-Listing Statement
South Ocean Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 2007/002381/06)
JSE code: SOH ISIN:ZAE000092748
("South Ocean" or "the Company")
South Ocean Holdings Limited - Abridged Pre-Listing Statement ("JSE")
1. Introduction
South Ocean began manufacturing electric power cables 17 years ago and has
since grown into a medium sized cable company that manufactures a
comprehensive range of electric power cables at its factory in Alrode, near
Johannesburg. South Ocean focuses on the low voltage general-purpose cable
market distributing its products through electrical wholesalers and cable
distributors.
The Company has a strong market share in its defined markets and the economic
prospects of the Company are strongly linked to the boom in the construction
industry and specifically infrastructure development in South Africa. Growth
of the manufacturing facility has been consistent with the demand for the
product locally and South Ocean has consistently increased its market share
since inception. Today the Company employs over 200 people and has grown its
revenue by 25% annually compounded over the last three years with a consistent
increase in profit margins.
Growth is mainly due to increased customer demand. South Ocean provides its
customers with a high level of service, competitive pricing, excellent product
quality and technical backup resulting in significant customer loyalty. The
Company`s management has an established track record in the manufacturing of
electric cables and experience in the electrical sector in South Africa.
Management also creates value for its customers by drawing on the significant
experience of its Taiwanese shareholder.
Hong-Tai Electric Industrial Limited ("Hong-Tai"), a company established in
1968 and listed on the Taiwan Stock Exchange since 1993 is involved in the
cable manufacturing industry in Taiwan. On date of Listing, after the
successful completion of the Offer as described below, Hong-Tai will own
directly and indirectly approximately 22% of the issued share capital of South
Ocean. South Ocean will have no controlling shareholder after the Offer.
2. Purpose of the Pre-Listing Statement, Private Placing and Listing
The main purpose of the listing is to:
* provide a further funding mechanism through which South Ocean can
structure and fund opportunities in the Public and Construction sector
both organically and through acquisitions, thereby facilitating further
growth.
* enable the group to enter new markets and broaden its customer base.
* create value for shareholders by providing strong return on capital for
new and existing shareholders.
* enhance investor and general public awareness of South Ocean.
3. The Offer
The Offer comprised an offer in respect of the issue and/or sale of 52 500 000
South Ocean shares at between R6.30 and R7.20 per South Ocean share ("the
Offer price") in terms of a Private Placement, of which:
- 18 700 000 South Ocean shares were offered for subscription by South
Ocean to potential investors to subscribe for South Ocean shares; and
- 33 800 000 South Ocean shares were offered by way of an offer for sale to
potential investors (collectively, "the Offer")
The Private Placing was substantially over subscribed and the shares were
placed/issued at R7.00 per South Ocean share in terms of the book building
process. As a result R367 500 000 was raised through the Private Placing. The
Listing Date of the South Ocean shares on the JSE will be Wednesday, 28
February 2007.
4. Financial information
The table below sets out the unaudited pro forma balance sheet of South Ocean
as published in the Pre-Listing Statement of South Ocean. The pro forma
balance sheet has been prepared for illustrative purposes only and because of
its nature may not fairly reflect the balance sheet of South Ocean after the
acquisition of South Ocean Electric Wire Company (Pty) Limited ("SOEW") (as
described in the pre-listing statement) and the subscription offer. The pro
forma balance sheet is the responsibility of the Directors of South Ocean and
incorporates the issue of 18 700 000 new South Ocean shares at the value of
R7,00 per share.
Pro forma
Rands After
subscription
offer
ASSETS
Non-current assets 64 307 736
Tangible assets 64 307 736
Current assets 302 216 873
Inventory 65 657 329
Trade and other receivables 105 025 766
Cash and cash equivalents 131 533 778
Total assets 366 524 609
EQUITY AND LIABILITIES
Capital and reserves 247 027 670
Share capital 896 964
Share premium 164 949 064
Retained earnings 81 181 642
Non-current liabilities 14 693 653
Interest bearing borrowings 5 207 367
Deferred taxation 9 486 286
Current liabilities 104 803 286
Trade and other payables 28 027 177
Current portion of interest bearing 5 050 022
borrowings
Taxation 1 128 788
Shareholders for Dividends 10 649 453
Bank overdraft 59 947 846
Total equity and liabilities 366 524 609
Notes:
1. Extracted from the audited financial statements of South Ocean at 31
January 2007 and the audited financial statements of SOEW for the period ended
31 December 2006.
2. The above takes into account the subscription offer at an issue price of
R7.00 per share.
3. The above represents the pro forma consolidated balance sheet of South
Ocean after the reverse acquisition by SOEW (as described in the Pre-Listing
Statement). The pro-forma balance sheet is based on the assumption that the
reverse acquisition by SOEW and the Subscription Offer were effective on 31
December 2006.
5. Directors
Name, age and nationality Business address Occupation /
Function
Johannes Bhekumuzi 42 Addison Drive Chairman
Magwaza(64) La Lucia Ridge (Independent, non-
South African executive)
Edward Hwei Ti Pan (60) 12 Botha Street Chief Executive
Brazilian Alrode Officer
Johannesburg
Jacobus 12 Botha Street Chief Financial
Petrus Bekker (50) Alrode Officer
South African Johannesburg
Ethan Gilbert Dube (47) Vunani House, Freestone Director
South African Park, 135 Patricia (Independent, non-
Road, Sandton executive)
Paulo Jose Monteiro 12 Botha Street Executive Director
Ferreira (37) Alrode
South African Johannesburg
David Ko (46) 20 F, No.65 Tunhwa Road Director
Taiwanese Section 2 (Independent, Non-
Taipei executive)
Taiwan
Chung Hsiang Pan (Hong-Tai) 20 F, No.65 Tunhwa Road Director
(50) Section 2 (Non-executive)
Taiwanese Taipei
Taiwan
Robert Paul Walley (50) 12 Botha Street Executive Director
South African Alrode
Johannesburg
Chi-Ying Wu (Hong-Tai) (41) 20 F, No.65 Tunhwa Road Director
Taiwanese Section 2 (Non-executive)
Taipei
Taiwan
6. Listing on the JSE
The JSE has approved the listing of 118 700 000 South Ocean ordinary shares in
the "Electronic and Electrical Equipment" sector of the JSE list with effect
from the commencement of business on Wednesday, 28 February 2007. The shares
will trade under the abbreviated name "S.OCEAN" and the JSE code "SOH".
7. Pre-Listing Statement
Copies of this Pre-Listing Statement may be obtained from the registered
office of South Ocean, the sponsors or transfer secretaries:
- South Ocean: 12 Botha Street, Alrode, Johannesburg, 1451
- Investec Corporate Finance: Second Floor, 100 Grayston Drive, Sandown,
Sandton, 2196
- Computershare: Ground Floor, 70 Marshall Street , Johannesburg, 2001
Johannesburg
28 February 2007
Legal adviser Auditors and reporting
Bookrunner, Investment Bank accountants
and sponsor
(Investec Corporate Finance) (Roodt Inc.) (PricewaterhouseCoopers)
Date: 28/02/2007 07:00:01 Produced by the JSE SENS Department.
