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BEG/BEGP2 - Beige Holdings Limited - Abridged pre-listing statement

Release Date: 06/05/2011 11:10
Code(s): BEG BEGN
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BEG/BEGP2 - Beige Holdings Limited - Abridged pre-listing statement Beige Holdings Limited (Incorporated in the Republic of South Africa) (Registration No: 1997/006871/06) Share Code: BEG ISIN: ZAE000034161 Share Code: BEGP2 ISIN: ZAE000154787 ("Beige" or "the company") ABRIDGED PRE-LISTING STATEMENT Abridged pre-listing statement relating to the proposed listing of up to 25 000 000 variable rate, cumulative, non-participating, convertible, redeemable preference shares ("preference shares") on the Alternative Exchange of the JSE Limited ("the JSE") with effect from the commencement of business on Monday, 16 May 2011. This abridged pre-listing statement is not an invitation to the public to subscribe for preference shares in Beige, but is issued in compliance with the Listings Requirements of the JSE for the purpose of providing information to the public with regard to Beige. 1. INTRODUCTION Shareholders are referred to the announcements dated 9 November 2010, 1 April 2011 and 4 April 2011 detailing the announcement by Beige of its intention to raise R25 million by way of a partially underwritten renounceable rights offer of 25 000 000 preference shares. The preference shares, which have a par value of R0.01, have been offered to existing shareholders for subscription by way of a rights offer in the ratio of 1.53203 new preference shares for every 100 Beige ordinary shares held at the close of business on Friday, 15 April 2011, at an issue price of R1.00 per share. Letters of allocation in respect of the preference shares were listed on the JSE on Monday, 11 April 2011 under share code BEGN and ISIN: ZAE000154795 and may be traded on the JSE until close of business on Friday, 6 May 2011. 25 000 000 preference shares will be listed and commence trading on the JSE at 09:00 on Monday, 9 May 2011 under the share code: BEGP2 and ISIN: ZAE000154787 and the rights offer will close at 12:00 on Friday, 13 May 2011. The preference shares subscribed for in terms of the rights offer will, for the time being, be the only preference shares in issue. Shareholders will be advised of the final number of preference shares subscribed for in an announcement to be published on SENS on Monday, 16 May 2011. The salient features of the preference shares are set out in paragraph 6 below. 2. OVERVIEW OF THE BUSINESS OF BEIGE Operational overview: Beige operates though a number of subsidiaries and divisions, but within four separate, but clearly focused areas, being: (i) the contract manufacturing of branded personal care products including cosmetics and cosmetic application products (cosmetic brushes and applicators, facial sponges, cotton wool and buff puffs), bath products (soaps, fizzing bath balls, bath soaks, bubble baths, bath brulees and bath salts and crystals), depilatory products, body scrubs and lotions and bath accessories (sponges, massage bars and loofahs). These operations are mainly conducted out of the company`s Johannesburg operations; (ii) the contract manufacturing of branded home care products including dishwashing liquids, home disinfectants, home surface cleaning products and washing powders. These products are mainly manufactured out of the company`s Durban operations. (iii) the manufacturing of injection moulded, injection stretch blow moulded and blow moulded rigid bottle containers for the beverage, personal care and allied industries. The company utilises the containers it manufactures in its own operations, which enables it to provide both the product and the packaging to its contract manufacturing client, but also supplies plastic bottles and closures into this sector in HDPE, PVC and PET, primarily to markets in Gauteng and Kwa-Zulu Natal. The packaging operations are conducted out of the company`s Johannesburg-based Kliprivier facility; and (iv) the contract manufacturing of branded nutra-ceutical and complimentary health care products. These products are manufactured out of the company`s MCC-approved manufacturing facility in Cape Town. Diversification of Products and Markets: The diversification of Beige`s product base from contract manufacturing to the manufacture and supply of packaging has provided the Group with improved economies of scope and supply-chain co-ordination and a higher degree of control over the entire value chain. It enables the Company to provide a complete manufacturing and packaging solution for its customers through its ability to provide customers with a fully integrated service, from the design, printing and manufacture of the packaging to the manufacture and insertion of the filling and the distribution of the completed product. Empowerment: During 2006, the Company concluded an empowerment transaction with Thebe Investment Corporation (Pty) Ltd ("Thebe") in terms of which Thebe acquired a 25% interest in Beige. This empowerment transaction both embraces and complies with the spirit of the Black Economic Empowerment Act, on a basis which is commercially sustainable for Beige and represented a major milestone for the transformation of the contract manufacturing industry. The partnering of Beige with Thebe has enhanced the group`s strategy to become one of the leading contract manufacturing and packaging companies for the home and personal care industry and pro-actively addresses the broader requirements for empowerment and transformation within the South African economy. Beige is currently rated as a Level 3 B-BBEE contributor. 3. PROSPECTS Beige is currently finalising its results for the year ended 31 March 2011. These results are expected to be released on SENS on or about 28 June 2011. The Group continues to make additional investments in infrastructure and capacity and both the Durban and Gauteng operations have been expanded in expectation of the future growth in demand for the goods and services it provides. These initiatives all form part of a strategic decision by the Group to grow market share in a controlled fashion. The long term benefits of this growth strategy include the optimisation of available production capacity, improvements in efficiency and the achievement of greater benefits resulting from consolidated procurement. 4. DIRECTORS The names, ages and business addresses of the directors are set out below: NON-EXECUTIVE BUSINESS ADDRESS BUSINESS FUNCTION DIRECTORS Monwabisi Fandeso Thebe House, 166 Non-executive Chairman of (52) Jan Smuts Avenue, Beige Rosebank, 2194 Mathys du Preez 86A Marian Street, Non-executive director, (63) Lynwood Glen, 0081 Chairman of the Audit Committee and member of the Risk Committee Lionel Karp (65) 25 Rudd Road, Independent non-executive Illovo, director, Chairman of the Johannesburg Remuneration Committee and member of the Audit Committee
Lindiwe Gadd (40) Thebe House, 166 Non-executive director and Jan Smuts Avenue, member of the Risk Committee Rosebank, 2194 Ronald Weissenberg 214 Barry Hertzog Independent Non-executive (45) Avenue, Greenside, director, Chairman of the 2006 Risk Committee and member of the Audit and Remuneration Committees
EXECUTIVE BUSINESS ADDRESS BUSINESS FUNCTION DIRECTORS Mark Di Nicola 5 Brine Road, Chief Executive Officer (41) Chloorkop Extension 1, 1624 Michael Easter 5 Brine Road, Financial Director (45) Chloorkop Extension 1, 1624
5. SALIENT FEATURES OF THE PREFERENCE SHARES The following definitions apply to the preference shares: - Issue Date: means the date of issue of the preference shares as determined by the directors, being 16 May 2011
- Conversion Date: means a date not less than 3 years and one day after the Issue Date - Final Conversion Date: means seven days after the Conversion Date
- Redemption Date: means seven days after the Final Conversion Date - Redemption Price: means R1.00 plus all cumulative preference dividends not yet declared and cumulative preference
dividends declared but not yet paid - The preference shares are variable rate, cumulative, non- participating, convertible, redeemable, preference shares - The preference shares have a par value of R0.01 and will be issued at R1.00 per preference share - The preference shares shall confer on the holder thereof the right to receive, out of the profits of the company, an annual preferential cash dividend calculated at prime plus 2% per annum on the issue price of the preference shares - In the event that the company has insufficient profits or reserves to pay the declared preference dividend, it will be obliged to pay interest on the arrear dividends calculated at prime plus 8% - The right to dividends will lapse on the third anniversary of the Issue Date - The preference shares shall, at the election of the Holder, be convertible on the Final Conversion Date into ordinary shares of the company in the ratio of 20 new ordinary shares for every one preference share held - Preference shares not converted will be automatically redeemed seven days after the Final Conversion Date - Preference shares may be converted into ordinary shares at the election of the preference shareholder on a date to be determined, which date will not be less than three years and one day after the date of issue of the preference shares - The full terms of the preference shares are set out in the rights offer circular referred to below. 6. RIGHTS OFFER CIRCULAR A circular setting out the detailed terms of the rights offer and the preference shares and enclosing, where applicable, a form of instruction, was posted to shareholders on Monday, 18 April 2011. An electronic copy of the Rights Offer circular may be downloaded from the Beige website (www.beige-holdings.co.za), whilst hard copies may be obtained during normal business hours from Monday, 18 April 2011 until Friday, 16 May 2011, at the following addresses: BEIGE ARCAY MOELA SPONSORS 5 Brine Road Arcay House II Chloorkop Number 3 Anerley Road Extension 1 Parktown 1624 2193 Johannesburg 6 May 2011 Designated Advisor Arcay Moela Sponsors (Proprietary) Limited Date: 06/05/2011 11:10:01 Supplied by www.sharenet.co.za 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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