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MVS - Mvelaserve Limited - Abridged Pre-Listing Statement
Mvelaserve Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/003610/06)
(Registration date: 19/02/1999)
JSE Share code: MVS ISIN: ZAE000151353
("Mvelaserve" or "the Group")
Mvelaserve Limited - Abridged Pre-Listing Statement
Abridged pre-listing statement relating to the listing of Mvelaserve on the
securities exchange operated by the JSE Limited ("JSE") with effect from the
commencement of business on Monday, 29 November 2010 ("Listing"), and the
subsequent unbundling of the ordinary shares of Mvelaserve ("Mvelaserve shares")
to Mvelaphanda Group Limited ("Mvela Group") ordinary shareholders
("Unbundling").
This abridged pre-listing statement is not an invitation to the public to
subscribe for Mvelaserve shares, but is issued in compliance with the Listings
Requirements of the JSE for the purpose of providing information to the public
with regards to Mvelaserve. This abridged pre-listing statement contains
extracts of the salient features of the Mvelaserve pre-listing statement dated
27 October 2010 ("Pre-listing Statement"), which extracts are contextualised by,
and should be read with, that Pre-listing Statement.
1. Introduction
The separate Listing and subsequent Unbundling of Mvelaserve shares is
subject to the fulfilment of the following inter-conditional conditions
precedent:
- the registration of the special resolutions passed by Mvelaserve
ordinary shareholders relating to the alteration of the share capital
of Mvelaserve, by the Company and Intellectual Property Registration
Office ("CIPRO");
- the passing of the requisite resolutions required to approve the
Unbundling, by Mvela Group shareholders at the Mvela Group combined
general meeting to be held on Thursday 18 November 2010 ("General
Meeting"); and
- the registration of any special resolutions passed by Mvela Group
shareholders relating to the Unbundling by CIPRO (if required).
Approximately 141 561 673 Mvelaserve ordinary shares of no par value each
will be listed on the main board of the JSE in the "Business Support
Services" sector, with effect from the commencement of business on Monday,
29 November 2010 ("Listing Date"). Subject to Mvela Group shareholder
approval, Mvela Group will unbundle its entire shareholding in Mvelaserve.
Accordingly, Mvela Group shareholders who are recorded on the Mvela Group
shareholder register on Friday, 3 December 2010 will receive 25 Mvelaserve
shares for every 100 Mvela Group ordinary shares held on such date.
2. Business of Mvelaserve
Mvelaserve is a leading provider of integrated outsourced business support
services in South Africa through its network of operating subsidiaries,
employing approximately 30 000 people.
Mvelaserve offers a wide range of services in the areas of facilities
management, security, catering and cleaning. It also provides services in
the gambling, pie manufacturing, franchising and freight markets.
The Mvelaserve group of companies operates four business units, namely:
- facilities management;
- security;
- catering and cleaning; and
- diversified services.
Mvelaserve has a decentralised management structure to afford substantial
autonomy to the business units where the focus is on expansion through
growth.
Mvelaserve`s key strengths include:
- Balanced business portfolio
Mvelaserve has a balanced portfolio across its markets and regions of
operation. It has a diverse client portfolio including both private
sector and government organisations.
- Proven financial performance
Mvelaserve has consistently achieved significant year-on-year growth,
margin enhancement and increased profitability. This has resulted in
strong cash flows and improved returns to shareholders.
.
- Operational advantages
Mvelaserve`s operational advantages include, inter alia,:
- well established, recognised brands;
- strong portfolio of blue chip clients;
- leading position in attractive markets;
- preferred supplier status in many industries;
- established national footprint;
- experienced, entrepreneurial and skilled senior management, with
a proven track record;
- diversified offering of outsourced services;
- a committed and loyal workforce;
- consistently strong corporate governance practices;
- long-standing business relationships;
- entrenched cross-selling capability; and
- thorough understanding of the markets in which it operates.
Mvelaserve`s strategy is to continue to grow and build the business
into the recognised leader in integrated outsourced business support
services in South Africa and the rest of the continent.
3. Mvelaserve`s prospects
The outsourced support services industry in South Africa is intrinsically
linked to the growth in global gross domestic product ("GDP") as well as
South African GDP, particularly as it relates to business and consumer
growth. After the adverse economic conditions created by the global
financial crisis experienced in the past two years, South Africa appears to
be on the path to economic recovery. However, the rate thereof remains
uncertain. Improved fundamentals of a lower interest rate and lower
inflation environment, and improved consumer demand will assist in speeding
up the recovery.
It is the opinion of the directors of Mvelaserve ("Directors") that as
primarily business-to-business outsourced support service providers, with
some exposure to the consumer market, Mvelaserve was not adversely affected
by the global financial crisis in the past two years and is well positioned
to take advantage of further economic growth in South Africa and the rest
of the continent. The Group will continue to seek to partner with clients
in the management of their assets, affording clients the room to
concentrate on their core business, while Mvelaserve delivers a value-for-
money basket of non-core services. Mvelaserve will, with strategic
acquisitions, internal development and internal growth, improve service
offerings to its client base.
4. Rationale for the Listing
The Directors believe that Mvelaserve has the operational and financial
capacity to pursue its intended vision and mission independently. The
Listing will allow Mvelaserve to achieve the following:
- enhance Mvelaserve shareholder value;
- enhance the public profile and general public awareness of Mvelaserve;
- provide Mvelaserve with a further source from which capital can be
raised, if required, to facilitate future expansion; and
- afford institutions, private clients, other business associates of
Mvelaserve and members of the public the opportunity to participate
directly in the equity of Mvelaserve.
5. Directors of Mvelaserve as at the Listing Date
Name, age and Business address Occupation/
nationality function
MSM Xayiya, (49), 1st Floor, 30 Executive
South African1 Melrose Boulevard, Chairman
Melrose Arch,
Johannesburg, 2076
JMS Ferreira, (52) , 28 Eddington Chief Executive
South African Crescent, Highveld Officer
Technopark,
Centurion, 0169
GE Roth, (53), South 1st Floor, 30 Chief Financial
African Melrose Boulevard, Officer
Melrose Arch,
Johannesburg, 2076
OA Mabandla, (47), 7 Sweetgum Lead
South Africa1 Crescent, Fourways Independent Non-
Gardens, Fourways, executive
2055 Director
S Masinga (43), South 38 Centre Road, 14 Independent Non-
African1 Crystal Court, executive
Morningside, 2057 Director
N Mbalula (32), South 1 Medborn Street, Independent Non-
African1 Midstream Estate, executive
Midstream, 1685 Director
FN Mantashe (49), 9 Steenveld Road, Independent Non-
South African1 Freeway Park, executive
Boksburg, 1459 Director
GD Harlow (53), South 6 Cowie Road, Independent Non-
African1 Forest Town, executive
Johannesburg, 2193 Director
Notes:
1. Appointment effective on the Listing Date
6. Financial information
Mvelaserve`s historical audited consolidated financial information for the
year ended 30 June 2010 and the reviewed consolidated financial information
for the years ended 30 June 2009 and 2008 are fully disclosed in the Pre-
listing Statement. Additionally, the pro-forma financial information for
the year ended 30 June 2010 is also included in the Pre-listing Statement.
The table below shows the following:
- The audited historical profit history of Mvelaserve for the year ended
30 June 2010; and
- The unaudited pro forma profit history of Mvelaserve for the year
ended 30 June 2010, adjusted for the transactions detailed below, for
the full year from 1 July 2009 to 30 June 2010.
The pro forma statement of comprehensive income has been prepared to show
the impact of the acquisition of 75% of the issued share capital of Zonke
Monitoring Systems (Proprietary) Limited from Mvela Group, the debt
restructuring and the Listing and Unbundling. The accounting policies
applied in preparing the pro forma financial information are consistent
with those applied by Mvelaserve. This unaudited pro forma financial
information is presented for illustrative purposes only and, because of its
nature, may not fairly reflect the results of Mvelaserve going forward.
This information should be read in conjunction with the financial
statements and financial information from which it is prepared and the
related notes to the historical and pro forma financial information as set
out in the Pre-Listing Statement.
Historical Pro forma
Statement of (Audited) (Unaudited)
comprehensive income
30 June 2010
R`000 R`000
Revenue 4 061 998 4 111 948
Profit from operations 291 287 260 160
Interest income - 3rd 14 888 947
party
Interest treasury 2 561
Interest expense - 3rd (77 943) (100 397)
party
Share of profit from 6 075 6 075
associates
Net fair value (2 726) (2 726)
adjustments and
profit/(loss) from
investments
Profit before taxation 234 142 164 059
Taxation expense (80 282) (57 502)
Profit for the year from 153 860 106 557
continuing operations
Profit for the year from 1 155 1,155
discontinued operations
Total comprehensive 155 015 107 712
income for the year
Weighted average number 100 141 561 673
of ordinary shares in
issue
Earnings per ordinary 1,517,980 0.71
share (R)
Headline earnings per 1,514,127 0.71
ordinary share (R)
Diluted earnings per 1,517,980 0.71
ordinary share (R)
Diluted headline 1,514,127 0.71
earnings per ordinary
share (R)
Notes to the historical and pro forma statement of comprehensive income are
set out in the Pre-Listing Statement.
7. Listing on the JSE
The JSE has approved the listing of 141 561 673 Mvelaserve ordinary shares
in the "Business Support Services" sector of the JSE under the abbreviated
name "Mvelasv" and the JSE code "MVS", subject to the conditions precedent
outlined in paragraph 1 above, with effect from the commencement of
business on Monday, 29 November 2010.
8. Pre-Listing Statement
A Mvela Group circular dated 27 October 2010, including the notice
convening the General Meeting, together with the Pre-listing Statement,
which documents contain full details of the Listing and Unbundling, were
posted to Mvela Group shareholders on 27 October 2010. Copies of these
documents will be available on the Mvela Group (www.mvelagroup.co.za) and
(www.mvelaserve.co.za) Mvelaserve websites, and may be obtained during
normal business hours from Wednesday, 27 October 2010 until Friday, 3
December 2010 (both days inclusive), at the following addresses:
Mvelaserve Investec Corporate Computershare Investor
28 Eddington Crescent Finance Services 2004
Highveld Technopark Second Floor (Proprietary) Limited
Centurion 100 Grayston Drive Ground Floor
0169 Sandown 70 Marshall Street
Sandton Johannesburg
2196 2001
Johannesburg,
27 October 2010
Investment bank and transaction sponsor
Investec Bank Limited
Legal advisers
Cliffe Dekker Hofmeyr
Reporting accountants and auditors
PKF (Jhb) Inc
Communications adviser
College Hill
Debt restructure advisers
Nedbank Capital
Date: 27/10/2010 07:53:01 Supplied by www.sharenet.co.za
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