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Abridged Prospectus and notice of general meeting
SA FRENCH LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1982/009174/06)
Share code: SFH
ISIN: ZAE000108890
(SA French)
MIRROR LISTING OF SA FRENCH AND RELATED CORPORATE ACTIONS:
POSTING OF CIRCULAR, NOTICE OF GENERAL MEETING AND ABRIDGED
PROSPECTUS OF TORRE INDUSTRIAL HOLDINGS LIMITED (Torre)
1. INTRODUCTION
Shareholders are referred to the announcements released on
SENS on 28 June 2012 (the First Announcement) and 21 August
2012(the Second Announcement) detailing, inter alia:-
1.1 the restructuring of SA French through a mirror listing
to be implemented by way of a scheme of arrangement (the
Scheme), proposed by the SA French board, between SA
French and its shareholders, in terms of which, if
implemented, Torre will acquire all the ordinary shares
in SA French in exchange for 1 (one) Torre share for
every 10 (ten) SA French shares disposed of in terms of
the Scheme, following which SA French will become a
wholly owned subsidiary of Torre (the Mirror Listing);
1.2 the specific issue of 30 000 000 Torre shares for cash at
a subscription price of R1.00 (one Rand) per share,
amounting to a total consideration of R30 million, to the
investors identified in the Second Announcement (the
Cash Issue);
1.3 the specific issue of 40 000 Torre shares at a
subscription price of R1.00 (one Rand) per share,
amounting to an aggregate total consideration of R40 000
to J de Bruyn and S Swana in lieu of SA French directors
fees (the Specific Issue of Shares to Directors);
1.4 the specific issue of 462 251 Torre shares for cash at a
subscription price of R1.00 (one Rand) per share,
amounting to a total consideration of R462 251 to Mowana
Investments Proprietary Limited (Mowana), which
subscription price will be set-off against the amount
owed to Mowana in terms of its loan claim against Torre
(the Shareholder Loan Conversion);
1.5 the acquisition by Torre of 100% of the ordinary shares
and claims in Forktech Proprietary Limited, a Cape Town
based company engaged in forklift rentals, from Mr Johann
van Tonder and the trustees for the time being of the Van
Tonder Family Trust for a total purchase consideration of
R15 million, subject to adjustment as contemplated in the
First Announcement (the Acquisition), which purchase
consideration includes the amount of R1 million due in
terms of the VAT Warranty Consideration, as defined in
the circular referred to in paragraph 2 below;
1.6 the specific issue of 7 500 000 Torre shares to SR
Midlane at a subscription price of R1.00 (one Rand) per
share, which subscription price will be lent and advanced
by Torre to SR Midlane (the Midlane Subscription); and
1.7 the adoption of the Torre Industrial Holdings Limited
Share Plan.
(collectively hereinafter referred to as the Corporate
Actions).
2. POSTING OF CIRCULAR
Shareholders are advised that a circular, which will include
further details of the Corporate Actions as well as a notice
of a general meeting of SA French shareholders, a form of
proxy and a form of surrender and transfer in relation to
Torre (the Circular), will be posted to SA French
shareholders today, 14 September 2012 (the Posting Date).
The Circular also incorporates a prospectus, which was
registered with the Companies and Intellectual Property
Commission (CIPC) on 7 September 2012 ("the Prospectus"),
in respect of the listing of the entire issued share capital
of Torre on the JSE Limited (JSE). The Circular, including
the Prospectus, will also be available on SA Frenchs website
at www.safrench.co.za from the Posting Date. Shareholders
are advised to review the Circular for the full terms and
conditions of the Corporate Actions.
3. NOTICE OF GENERAL MEETING OF SA FRENCH SHAREHOLDERS
Notice is hereby given that a general meeting of SA French
shareholders will be held at 11:00 on Wednesday, 17 October
2012 at 461 Flower Close, Greenhills Industrial Park, Tunney
Extension 9, Germiston (the "General Meeting") for the
purpose of considering and, if deemed fit, passing with or
without modification, the resolutions set out in the notice
of the General Meeting included in the Circular.
4. IMPORTANT DATES AND TIMES RELATING TO THE SCHME
The important dates and times relating to the Scheme are set
out below. Capitalised terms used in this paragraph 4 bear
the meanings ascribed to them in the Circular:-
2012
Circular posted to SA French shareholders on Friday, 14 September
Last day to trade in SA French shares in
order to be recorded in the register to vote
at the General Meeting (see note 1 below) on Friday, 5 October
Voting Record Date to vote at the General
Meeting by close of trading on Friday, 12 October
Last day to lodge forms of proxy in respect
of the General Meeting by 11:00 on Monday, 15 October
Last date and time for SA French shareholders
to give notice, in terms of section 164 of
the Act, to SA French objecting to the
special resolution approving the Scheme by Wednesday, 17
11:00 (see note 3 below) on October
General Meeting to be held at 11:00 on Wednesday, 17
October
Publication of results of the General Meeting Wednesday, 17
on SENS on October
If the Scheme is approved by shareholders at
the General Meeting:
Last date on which shareholders can make
application to the court in terms of section Wednesday, 31
115(3) of the Act October
Last date for SA French to send objecting
shareholders notices of the adoption of the
special resolution approving the Scheme, in Wednesday, 31
terms of section 164 of the Act October
If no shareholders exercise their rights in
terms of section 115 of the Act:
Finalisation Date expected to be on Friday, 16 November
Finalisation announcement released on SENS on Friday, 16 November
Last day to trade to participate in Scheme
Consideration on Friday, 23 November
Suspension of listing of SA French shares at
commencement of trading on Monday, 26 November
Expected listing of Torre shares (including
Scheme Consideration) on the JSE under the
abbreviated name of Torre, JSE Code TOR
and ISIN ZAE000169322 at the commencement of Monday, 26 November
Scheme Consideration Record Date, being the
date on which Scheme Participants must be
recorded in the register to receive the
Scheme Consideration, by close of trading on Friday, 30 November
Operative Date of the Scheme is expected to Monday, 3 December
be on
Scheme consideration expected to be
paid/posted to certificated Scheme
Participants (if Documents of Title are
received on or prior to 12:00 on the Scheme
Consideration Record Date) on or about Monday, 3 December
Dematerialised Scheme Participants expected
to have their accounts (held at their CSDP or
broker) updated or the Scheme Consideration
Shares posted to them on or about Monday, 3 December
Expected termination of listing of SA French
shares at the commencement of trading on or Monday, 3 December
Notes:
1. Any changes to the above dates and times will be subject to
approval by the JSE and/or the TRP, to the extent required,
and will be published on SENS.
2. Shareholders should note that, as trade in SA French shares
on the JSE is settled through Strate, settlement of trades
takes place five business days after the date of such trades.
Therefore, shareholders who acquire shares on the JSE after
the last day to trade in SA French shares in order to be
recorded in the register on the Voting Record Date will not
be entitled to vote at the General Meeting.
3. Shareholders who wish to exercise their Appraisal Rights are
referred to Annexure 10 of the Circular for purposes of
determining the relevant timing for the exercise of their
Appraisal Rights.
4. Dematerialised shareholders, other than those with own-name
registration, must provide their CSDP or broker with their
instructions for voting at the General Meeting by the cut-off
time and date stipulated by their CSDP or broker in terms of
their respective custody agreements.
5. No dematerialisation or re-materialisation of shares may take
place from the business day following the Scheme LDT, being
Friday, 23 November 2012.
6. If the General Meeting is adjourned or postponed, forms of
proxy submitted for the initial General Meeting will remain
valid in respect of any adjournment or postponement of the
General Meeting.
7. Although the salient dates and times are stated to be subject
to change, such statement may not be regarded as consent or
dispensation for any change to time periods which may be
required in terms of the Companies Regulations, where
applicable, and any such consents or dispensations must be
specifically applied for and granted. In this regard, the
TRP granted SA French an extension in respect of the Posting
Date within 20 business days as required by regulation 102(2)
of the Companies Regulations in order to allow for the
registration of the Prospectus with the CIPC.
8. All times referred to in this announcement are references to
South African time.
5. UPDATED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS
5.1 The Scheme, the Cash Issue, the Shareholder Loan Conversion,
the Acquisition and the Midlane Subscription are collectively
referred to as the Transactions for purposes of this
paragraph 5.
5.2 Since the publication of the Second Announcement, the
unaudited pro forma financial effects of the Transactions on
shareholders have been updated as follows:
After
Share- After
Before the After holder Cash After
Transactions Scheme Loan Issue Acquisition
(1) (2) Conversion (3) (5) % change
Profit for
the period 219 219 219 219 2 219 913.24%
Headline
(loss)/ear
nings per
share -916 -916 -916 -916 1 084 218.34%
Net asset
value per
share
(cents) 9.06 90.57 90.65 91.18 92.84 2.51%
Net
tangible
asset
value per
share
(cents) 9.06 90.57 90.65 91.18 87.87 -2.99%
Basic
earnings
per share
(cents) 0.04 0.39 0.38 0.49 2.22 473.30%
Headline
(loss)/ear
nings per
share
(cents) -0.16 -1.62 -1.60 -0.71 1.08 166.96%
Weighted
and actual
number of
shares in
issue at
the end of 566 375 56 637 57 099 94 599 100 099
the period 689 569 820 820 820
5.3 The unaudited pro forma financial effects of the Transactions
on shareholders are the responsibility of the SA French
directors.
5.4 The unaudited pro forma financial effects of the Transactions
have been prepared for illustrative purposes only to assist
shareholders in assessing the impact of the Transactions on
the unaudited interim results of SA French for the six months
ended 31 December 2011 and, due to its nature, may not give a
fair reflection of SA Frenchs financial position and results
after the Transactions.
5.5 The unaudited pro forma financial effects set out above and
the notes and assumptions detailed below should be read in
conjunction with the unaudited pro forma financial
information and the Independent Reporting Accountants report
thereon, as annexed at Annexure 5 and Annexure 6,
respectively, in the Circular.
Notes and assumptions:
1. The amounts set out in the Before the Transactions column
above have been extracted from the published unaudited
consolidated financial results of SA French for the six
months ended 31 December 2011.
2. Shareholders will receive the Scheme Consideration of 1 (one)
Torre share for every 10 (ten) Scheme Shares disposed of in
terms of the Scheme.
3. The Cash Issue is for an amount of R30 million in respect of
30 000 000 Torre shares issued at R1 (one Rand) each. The
effect of the Cash Issue is presented net of transaction fees
of R3 million. Accordingly, the Cash Issue will result in an
increase of R27 million in total NAV (89 cents per newly
issued share) and a decrease in NAV per newly issued share to
90.42 cents per share.
4. It has been assumed that:
(a) the Transactions had been implemented on 31 December 2011
for purposes of compiling the statement of financial
position and on 1 July 2011 for purposes of compiling the
statement of comprehensive income;
(b) the Cash Issue will be for an amount of R30 million;
(c) the earn out targets in respect of the Acquisition as
contemplated in paragraphs 4.2.1(ii) and (iii) of Section
B in the Circular are fully met (i.e. full contingent
consideration paid in respect of the Acquisition,
calculated in accordance with IFRS3);
(d) all the Transactions are implemented;
(e) transaction fees amount to R3 million and will be applied
against share capital;
(f) a portion of the proceeds from the Cash Issue were
utilised to settle R0.83 million interest bearing debt
resulting in a finance cost saving of R38 000. Interest
bearing debt carried an interest rate of 9% per annum
(calculation assumes monthly interest compounding); and
(g) the portion of the proceeds from the Cash Issue which
were not utilised to settle debt or fund the Acquisition
(R13.79 million) earned interest at 5% per annum
resulting in investment revenue of R348 000 (calculation
assumes monthly interest compounding).
5. Financial information relating to Forktech was extracted from
its audited financial statements for the period 1 July 2011
to 30 September 2011, and unpublished management accounts for
the period 1 October 2011 to 31 December (Forktech Financial
Information). For purposes of complying with paragraph
8.29(c)(iii) of the Listings Requirements, the Independent
Reporting Accountants will issue a review opinion on the
Forktech Financial Information, which will be published on
SENS prior to the General Meeting.
6. All adjustments have a continuing effect.
6. ABRIDGED PROSPECTUS OF TORRE
The information in this abridged prospectus has been
extracted from the detailed Prospectus to be issued as part
of the Circular. This abridged prospectus is not an
invitation to offer to purchase or subscribe for, or a
solicitation of an offer to purchase or subscribe for, any
shares in Torre, but is issued in compliance with the
Listings Requirements of the JSE for the purpose of providing
information to the public with regard to the listing of the
ordinary shares of Torre on the Alternative Exchange operated
by the JSE. Capitalised terms used below bear the meanings
ascribed to them in the Prospectus.
6.1 RATIONALE FOR LISTING
6.1.1 Following its rights issue and recapitalization in
2011, SA French embarked on a diversification strategy
in its core crane rental and sales business in order to
alleviate the risks of overexposure to the South
African construction sector. This, amongst other
initiatives, has positioned the business to have a
greater focus on the high growth African infrastructure
and resource sectors. In addition, as a result of cost
cutting and the implementation of new systems and
controls, SA French remains well positioned for a
recovery in its core South African market.
6.1.2 As announced on SENS on 19 March 2012, these efforts
resulted in SA French reporting a profit of R218 387
for the six months ended 31 December 2011. In order to
build on this operational recovery, the directors of SA
French have developed a strategy to diversify its
operations and refashion it as an industrial holding
company by way of the Mirror Listing, in terms of which
SA French will become one subsidiary amongst a
diversified portfolio of industrial businesses owned by
Torre.
6.1.3 The Mirror Listing will provide Torre with the ability
to ring-fence its holdings in SA French as well as
other businesses that will be acquired, allowing for
more efficient capital structures and a reduction of
risk for the Torre group as a whole.
6.2 THE SCHEME
The Prospectus has been prepared on the assumption that the
Corporate Actions will be approved by SA French shareholders
at the General Meeting and that the Scheme will become
operative.
6.3 OVERVIEW OF TORRE
Torre is a newly incorporated public holding company which
was established specifically for purposes of holding SA
French and Forktech as wholly-owned subsidiaries pursuant to
the implementation of the Transactions and the Mirror
Listing, together with a diversified portfolio of industrial
businesses it may acquire in the capital equipment,
industrial consumables and asset finance sectors in future,
in terms of the strategy of the directors of SA French to
diversify operations and refashion itself as an industrial
holding company.
6.4 LISTING ON JSE
SA French is currently listed on the JSE. The JSE has
granted Torre a listing by way of introduction of all its
issued ordinary shares (being the Scheme Consideration
Shares) on the JSE under the abbreviated name Torre, share
code TOR and ISIN ZAE000169322 with effect from the
commencement of trade on Monday, 26 November 2012, which
listing will replace the current listing of SA French. Torre
will be listed on the Alternative Exchange of the JSE.
6.5 SHARE CAPITAL
On the listing date, the total authorised ordinary share
capital of Torre will comprise 1 000 000 000 ordinary no par
value shares and the issued share capital of Torre will
consist of 61 179 138 ordinary no par value shares. Upon the
issuing of the Consideration Shares, the issued share capital
of Torre will be 104 681 389 ordinary no par value shares.
The stated capital of Torre on the issuing of Consideration
Shares will be R104 681 389. No Torre shares are held in
treasury.
6.6 TORRE DIRECTORS
6.6.1 The full names, ages, business addresses and capacities
of the directors of Torre are provided below:
Director Age Business address
Peter John van Zyl 35 1 Silverwood Close, Steenberg
(Chairman)*>= Office Park, Tokai, 7945
Charles Edward Pettit 31 1 Silverwood Close, Steenberg
(Group Chief Executive Office Park, Tokai, 7945
Officer)~^
Stephen Roy Midlane 46 1 Silverwood Close, Steenberg
(Group Financial Office Park, Tokai, 7945
Director)>=
Quentin Cecil 60 461 Flower Close, Greenhills
Alexander van Breda Industrial Park, Tunney Extension
(Group Technical 9, Germiston, 1410
Director)>=
Joseph William Leo 40 22 Hurlingham Road, Illovo, 2196
Murphy Fizelle#<>
Sandile Swana#+ 44 461 Flower Close, Greenhills
Industrial Park, Tunney Extension
9, Germiston, 1410
Craig Warwick John 42 13 Porter Avenue, Melrose, 2196
Lyons#=
*Non-executive
#Independent non-executive
+Lead independent director
~Interim appointment
^British
<Irish
>Director of SA French
=Director of Forktech
6.6.2 Save where indicated, all Torre directors are South
African.
6.6.3 None of the Torre directors are partners with unlimited
liability.
6.6.4 Details of other directorships held by the Torre
directors are included in Annexure Torre4 to the
Prospectus.
6.7 COPIES OF THE PROSPECTUS
Copies of the Prospectus will be available for inspection
during normal office hours from the Posting Date until
Wednesday, 17 October 2012 at the registered offices of Torre,
being AfrAsia House, Block F, The Terraces, 1 Silverwood
Close, Steenberg Office Park, Tokai. The Prospectus, as
incorporated in the Circular, will also be available on SA
Frenchs website at www.safrench.co.za.
6.8 TRANSFER SECRETARIES
Details of Torres transfer secretaries are as follows:
Link Market Services South Africa Proprietary Limited
Physical Address: 13th Floor, Rennie House, 19 Ameshoff
Street, Braamfontein
Postal Address: PO Box 4844, Johannesburg, 2000
Telephone: (011) 713 0800
Facsimile: 086 674 4381
E-mail: info@linkmarketservices.co.za
7. RESPONSIBILITY STATEMENT
The independent board of SA French accept responsibility for
the information contained in this announcement. To the best
of their knowledge and belief, the information contained in
this announcement is true and nothing has been omitted which
is likely to affect the importance of the information
included.
Johannesburg
14 September 2012
Corporate advisor: AfrAsia Corporate Finance Proprietary
Limited
Designated advisor: PSG Capital Proprietary Limited
Date: 14/09/2012 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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