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Abridged Pre-Listing Statement
CAPITAL APPRECIATION LIMITED
Incorporated in the Republic of South Africa on 3 December 2014
(Previously Firefly Investments 285 Proprietary Limited)
(Registration number 2014/253277/06)
JSE share code: CTA ISIN: ZAE000208245
("Capital Appreciation" or "Company")
www.CapitalAppreciation.co.za
ABRIDGED PRE-LISTING STATEMENT
THIS ABRIDGED PRE-LISTING STATEMENT RELATES TO:
- the listing of Capital Appreciation as a SPAC in the "Speciality Finance" sector of the Main Board of the JSE; and
- a Private Placement to be undertaken in connection with the listing of Capital Appreciation, by way of an offer
for subscription by Capital Appreciation, subject to certain conditions, to qualifying persons who fall within one
of the specified categories listed in section 96(1)(a) of the Companies Act, to whom the offer will be addressed
specifically, and by whom the offer will be capable of acceptance, of the Offer Shares at the Offer Price of R1.00
per Offer Share, to raise at least R500 million, being the minimum amount required to be raised in order to list
as a SPAC on the Main Board of the JSE.
The minimum capital amount of R500 million is fully underwritten. The Company will raise substantially more than
R500 million if investor demand warrants.
This Abridged Pre-Listing Statement does not constitute an offer, or an invitation or solicitation of an offer, to the
general public to subscribe for, or otherwise acquire, the Offer Shares in any jurisdiction and is issued in compliance
with the JSE Listings Requirements for the purpose of providing information in relation to Capital Appreciation to
selected persons.
The offer is a private placement to qualifying persons, including institutions and brokers.
The JSE has granted the Company a listing as a SPAC in respect of all of the Ordinary Shares subscribed for
and issued by the Company in the "Speciality Finance" sector of the Main Board, under the abbreviated name:
"CAPPREC", JSE ordinary share code: "CTA" and ISIN: ZAE000208245, with effect from the commencement
of trade on 16 October 2015, subject to the Company having satisfied the minimum free float requirement, as
prescribed by the JSE Listings Requirements.
This Abridged Pre-Listing Statement highlights selected information from the pre-listing statement issued or to be
issued by the Company on 28 September 2015 ("Pre-Listing Statement"). It is not complete and does not contain
all of the information that readers of this Abridged Pre-Listing Statement should consider before subscribing for any
Offer Shares. Investors should read the Pre-Listing Statement carefully in its entirety. See Paragraph 8 below for
instructions on how to access a printed or electronic copy of the Pre-Listing Statement.
Capitalised terms have the meaning ascribed to them in the Pre-Listing Statement.
1. INTRODUCTION TO CAPITAL APPRECIATION
Capital Appreciation is a Special Purpose Acquisition Company ("SPAC") established in order to pursue the
acquisition of Viable Assets. A SPAC has 24 months (or such longer period as the JSE may permit) to make
an acquisition once listed or the funds raised in the Private Placement (plus interest thereon, minus certain
permitted expenses) will be returned to the SPAC's shareholders. Funds raised by a SPAC must be held in
escrow until an acquisition of Viable Assets is approved by shareholders.
2. ACQUISITION CRITERIA
The collective operational, commercial, financial and investment experience of the Company's leadership
is extensive and multifaceted and includes, inter alia, financial services, insurance, healthcare, metals and
mining, telecommunications, media, technology, property, manufacturing and education. This experience will
inform the Company's investment efforts.
While the Company's efforts in identifying prospective Viable Assets will not be limited to a particular industry or
geographic region within South Africa and/or Africa, the Company expects to focus on acquiring a controlling
interest in a company or business in the services sector but not mining operations. "Viable Assets" in the context
of a listing of a SPAC on the Main Board means assets that would independently allow the Company to qualify for
a Main Board listing.
The Company will seek to acquire Viable Assets that will provide a platform for future growth and expansion,
either directly in its commercial sector or in related sectors. In evaluating acquisition alternatives the Company
will consider the scalability and growth potential of the target as well as the Company's ability to add value.
The Company has not, and at the Listing Date will not have, entered into any formal and binding acquisition
agreement in relation to the Acquisition of Viable Assets. The acquisition of Viable Assets is subject to approval
by a majority of disinterested Directors and a majority of shareholders' votes cast at a meeting of the Company.
3. FOUNDERS
Names and prior experience of Founders are set out below:
Subscription
Underwriter Prior experience commitment
Michael Pimstein - 30+ years of experience as a senior executive in the steel,
engineering and manufacturing sector
Joint Chief Executive - CEO of Macsteel Service Centres SA from 1999 to 2013
- Has served as President of the Steel and Engineering Industries
Federation of Southern Africa, President of the Southern African
Stainless Steel Development Association and President of the
Association of Steel Service Centres
Bradley Sacks - 20+ years of experience in the financial services and investment
business sector and is presently Managing partner of Centric
Capital Ventures LLC
Joint Chief Executive - Previously a Managing Director, Global Head of Technology,
Media and Telecommunications Mergers & Acquisitions for Bank
of America Subscription
- Has been involved in evaluating, advising and investing in of any
strategic and financing transactions with an aggregate value amounts
exceeding US$100 billion required to
Michael (Motty) - 45+ years of experience as a senior advisor to executives and as meet the
Sacks an executive in various industries minimum of
R500 million,
part of which
Non-Executive - Held Executive and Non-Executive office in various business includes
Chairman sectors, including healthcare, financial services, technology, a firm
education, property and manufacturing commitment,
- Co-founder of Netcare Limited, having served as its Executive together with
Chairman for 12 years and thereafter as Non-Executive Chairman the other
and Non-Executive Director Underwriters,
- Co-founder and Chairman of Aplitec Limited (now Net 1) for a
minimum
- Co-founder of and mentor to BEE controlled Afrocentric Investment subscription
Corporation Limited of R60 million.
- Served as Chairman and/or Director on several Boards including,
Fedsure Holdings, Federated Employers Mutual, The Automobile
Association, Clinic Holdings, Advtech Limited, The International
Association of Political Consultants and more recently, Adcock
Ingram Limited
Alan Salomon - 35+ years of experience as a senior executive in an array of
financial services and industrial sectors
Chief Financial Officer - CEO of Bidvest Bank 2006 – 2013,
- Executive Director of The Bidvest Group 1990 – 2012
- Previously CEO of AFCOM Group Limited
- Previously Non-Executive Director of Transpaco Limited, Voltex
Limited and Enviroserv Holdings Limited
PIC
Daniel Matjila - Chief Executive Officer of the PIC
- 15+ years experience in the investment management industry
- 20+ years experience in senior management roles, both in the
private sector and in academia The PIC's
- Currently a Non-Executive Director and board member at Afrisam Subscription
Limited, Entabeni Holdings (Chairman) and Harith General commitment
Partners is R250
Roshan Morar - Non-Executive Deputy Chairman of the PIC million
- Non-Executive Deputy Chairman of Airports Company (SOC)
- Non-Executive Director of the South African National Road Agency
and Adcock Ingram Holdings Limited
CAET
- Trust specifically created by the Company for the recognition and
benefit of black individuals and other historically disadvantaged R50 million
South Africans
4. ADDITIONAL COMMITTED INVESTORS
African Rainbow Capital Proprietary Limited, a wholly black-owned investment company, the directors of which
are, inter alia, Mr Patrice Motsepe and Mr Johan van Zyl, has agreed to subscribe for 50 million Offer Shares
at the Offer Price.
The Capital Appreciation 67 Entrepreneurial Scheme, a scheme to recognise the academic record of deserving
students, has agreed to subscribe for 6.7 million Offer Shares at the Offer Price.
These commitments together with other Company related commitments brings the total committed capital to
more than R420 million.
5. BOARD AND SPECIAL ADVISOR
Names, ages, nationalities, and designations are set out below. All directors are South African. Bradley Sacks
is also a US citizen.
Director Designation Business address of Directors
Michael Pimstein (60), BCom Joint Chief Executive Officer 11th Floor, Sandton City Office Towers,
Acc 5th Street, Sandton, 2196
Bradley Sacks (48), BEconSc, Joint Chief Executive Officer 590 Madison Avenue, New York, NY,
MBA/JD (Hons) 10022
Alan Salomon (66), BSc Hons, Chief Financial Officer 11th Floor, Sandton City Office Towers,
CA(SA) 5th Street, Sandton, 2196
Motty Sacks (72), CA(SA), Non-Executive Chairman 11th Floor, Sandton City Office Towers,
AICPA (Isr) 5th Street, Sandton, 2196
Bukelwa Bulo (38), BBusSc, Independent Non-Executive Unit 7 One on Cross, 1 Cross Street,
CA(SA) Director Bryanston, 2196
Meyer Kahn (76), BA (Law), Lead Independent Non-Executive 11th Floor, Sandton City Office Towers,
MBA, DCom (hc) Director 5th Street, Sandton, 2196
Dr Daniel Matjila (53), PhD, Non-Executive Director Block C , Riverwalk Office Park,
MSc, BSc Hons 41 Matroosberg Road, Ashlea Gardens
Extension 6, Menlo Park, Pretoria
Roshan Morar (48), CA(SA), Non-Executive Director Ground Floor, Nedbank
CFE House, 161 Pietermaritz Street,
Pietermaritzburg 3201
Viktor Sekese (49), BCom, Independent Non-Executive 20 Morris Street East, Woodmead, 2191
BAcc, CA(SA) Director
Charles Valkin (81), BCom Independent Non-Executive 165 West Street, Sandton, 2196
LLB, H Dip Tax Director
Mervyn E King SC (78), BA, Special Advisor to the Board
LL.B. (Cum Laude), PhD (hc)
in Law, Hon LLD (Law), Higher
Diploma Income Tax
6. PRIVATE PLACEMENT
6.1 Particulars of the Private Placement
The Private Placement comprises an offer for subscription by Capital Appreciation to qualifying investors
of at least 500 million Offer Shares at the Offer Price of R1.00 per Offer Share. The Company reserves the
right to raise more than R500 million and increase the number of Offer Shares issued.
6.2 Conditions to the Private Placement
The first R500 million of the Private Placement has been underwritten by the Underwriters to guarantee
a Main Board listing. The Private Placement and Listing remain subject to the JSE minimum free float
requirement being attained. In this regard, 20% of the Ordinary Shares must be held by the public on the
Listing Date. The Private Placement and Listing will not proceed if the JSE's minimum free float requirement
is not attained, and any acceptance in relation to the Private Placement will not take effect and no person
will have any claim whatsoever against the Company or any other person as a result of the Private
Placement not taking effect.
6.3 Allocation
The basis of allocation of the Offer Shares will be determined by the Company and the Bookrunner. It is
intended that notice of the allocations will be given on or before 9 October 2015. Applicants may receive
no Offer Shares or fewer than the number of Offer Shares applied for. Any dealing in Offer Shares prior to
delivery of the Offer Shares is at the risk of the applicant.
6.4 Dates and times of the Private Placement
Opening date of the Offer 09:00 on Monday, 28 September 2015
Expected last date for indication of interest for the purposes
of the bookbuild 17:00 on Friday, 9 October 2015
Successful applicants advised of allocations Friday, 9 October 2015
Publication date of the final number of Offer Shares Monday, 12 October 2015
Expected Listing Date 09:00 on Friday, 16 October 2015
7. INVESTMENT STRUCTURE
- Qualifying and invited investors and the Founders will subscribe for Ordinary Shares.
- Investors' funds are to be held in escrow until the acquisition of Viable Assets (24 month Initial Period to
acquire Viable Assets).
- Shareholders have the right to vote to approve an acquisition of Viable Assets.
- In the event that no acquisition is made in the Initial Period, shareholders' Ordinary Shares will be redeemed
and shareholders will receive the initial subscription price plus any residual interest accrued thereon, less
certain permitted expenses.
- Shareholders have the right to vote on the retention of residual capital by the Company, being capital in
excess of the requirements for the acquisition of Viable Assets.
- The Founders (other than CAET) are prohibited from disposing of the Ordinary Shares that they acquire
as part of the Private Placement until the first anniversary of the Completion of an acquisition of Viable
Assets. CAET is prohibited from disposing of the Ordinary Shares that it acquires as part of the Private
Placement until the second anniversary of the Completion of an acquisition of Viable Assets.
- The Founders subscribed for Founders Initial Ordinary Shares at a nominal price prior to Private Placement
entitling the Founders to a 20% fully diluted interest in the Company.
- The Founders (other than CAET) are prohibited from disposing of their Founders Initial Ordinary Shares
until the later of (i) the first anniversary of the Completion of the acquisition of Viable Assets by the
Company and (ii) the date upon which the Company's Ordinary Shares have traded on the JSE at a volume weighted
average price of at least R1.20 per share for 20 out of 30 consecutive trading days after the Completion of
the acquisition of Viable Assets by the Company. CAET is prohibited from disposing of its Founders Initial
Ordinary Shares until the later of (i) the second anniversary of the Completion of the acquisition of Viable
Assets by the Company and (ii) the date upon which the Company's Ordinary Shares have traded on the
JSE at a volume weighted average price of at least R1.20 per share for 20 out of 30 consecutive trading
days after the Completion of the acquisition of Viable Assets by the Company.
8. COPIES OF THE PRE-LISTING STATEMENT
The Pre-Listing Statement is only available in English. Copies of the Pre-Listing Statement may be viewed on the
Company's website (http://www.CapitalAppreciation.co.za) or obtained, by qualifying investors, during normal
business hours from the registered office of the Company (165 West Street, Sandton, 2196, Johannesburg) and
the offices of the Bookrunner (Macquarie First South Capital Proprietary Limited, 1 Sandton Drive, Sandton,
2196), Sponsor (Investec Bank Limited, 100 Grayston Drive, Sandown, Sandton, 2196, Johannesburg) and the
Transfer Secretaries (Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street,
Marshalltown, 2107, Johannesburg) from the date of issue hereof until 9 October 2015.
Johannesburg
28 September 2015
Financial Advisor and Bookrunner
Macquarie
Attorneys to the Bookrunner
Webber Wentzel
in alliance with Linklaters
Auditors and Reporting Accountants
Ernst & Young
Attorneys to the Company
Bowman Gilfillan Africa Group
Sponsors
Investec
Specialist Bank
This Abridged Pre-Listing Statement, and the information contained herein, is not for publication, distribution,
or release, directly or indirectly, outside of South Africa. This Abridged Pre-Listing Statement does not constitute
an offer to the public for the sale of or subscription for, or an advertisement or the solicitation of an offer to
buy and/or subscribe for, securities as defined in the Companies Act, 2008 as amended ("the Act") or otherwise and
will not be distributed to any person in South Africa in any manner which could be construed as an offer to the
public in terms of the Act. Furthermore, this Abridged Pre-Listing Statement does not constitute an advertisement
or a prospectus registered and/or issued under the Act. This Abridged Pre-Listing Statement contains statements
about the Company that are or may be deemed to be forward-looking statements. All statements, other than statements
of historical fact are, or may be deemed to be, forward-looking statements. These forward-looking statements are
not based on historical facts, but rather reflect current views concerning future results and events and generally
may be identified by the use of forward-looking words or phrases such as "believe", "aim", "expect", "anticipate",
"intend", "foresee", "forecast", "likely", "should", "planned", "may", "estimated", "potential" or similar words
and phrases. Examples of forward-looking statements include statements regarding a future financial position or
future profits, cash flows, corporate strategy, anticipated levels of growth, estimates of capital expenditures,
acquisition strategy, prospects, future expansion projects or future capital expenditure levels and other economic
factors, such as, among other things, interest and exchange rates. By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and depend on circumstances that may or may not
occur in the future. The Company cautions that forward-looking statements are not guarantees of future performance.
Actual results, financial and operating conditions and liquidity may differ materially from those made in, or
suggested by, the forward-looking statements contained in this Abridged Pre-Listing Statement. All these
forward-looking statements are based on estimates and assumptions made by the Company, all of which estimates
and assumptions are inherently uncertain although the Company believes them to be reasonable. Such estimates,
assumptions or statements may not eventuate. Factors which may cause the actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied
in those statements or assumptions include matters not yet known to the Company or not currently considered
material by the Company. Important factors that could cause actual events to differ materially from the Company's
expectations include the following: changes in political, economic, legal and social conditions in South Africa
and elsewhere; fluctuations in currencies; future legislation, including regulations and rules, as well as changes
in enforcement policies; and other factors beyond the Company's control. Any forward-looking statement made in
this Abridged Pre-Listing Statement or elsewhere is applicable only at the date on which such forward-looking
statement is made. New factors that could cause the business of the Company not to develop as expected may emerge
from time to time and it is not possible to predict all of them. Further, the extent to which any factor or
combination of factors may cause actual results to differ materially from those contained in any forward-looking
statement is not known. The Company has no duty to, and does not intend to, update or revise the forward-looking
statements contained in this Abridged Pre-Listing Statement after the date of this Abridged Pre-Listing Statement,
except as may be required by applicable. Each of the Company, Macquarie First South Capital Proprietary Limited
("Macquarie") and their respective affiliates expressly disclaims any obligation or undertaking to update, review
or revise any forward looking statement contained in this Abridged Pre-Listing Statement whether as a result of
new information, future developments or otherwise. None of Macquarie and any of its directors, officers, employees,
advisers or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty,
express or implied, as to the truth, accuracy or completeness of the information in this Abridged Pre-Listing
Statement (or whether any information has been omitted from the Abridged Pre-Listing Statement) or any other
information relating to the Company, whether written, oral or in a visual or electronic form, and howsoever
transmitted or made available or for any loss howsoever arising from any use of the Abridged Pre-Listing Statement
or its contents or otherwise arising in connection therewith. Macquarie is acting exclusively for the Company and
no-one else in connection with the Private Placement and Listing. It will not regard any other person as its
client in relation to the Private Placement and/or the Listing and will not be responsible to anyone other than
the Company for providing the protections afforded to their respective clients, nor for providing advice in
relation to the Private Placement and/or the Listing, the contents of this Abridged Pre-Listing Statement or
any transaction, arrangement or other matter referred to herein. In connection with the Private Placement
and/or the Listing, Macquarie and any of its affiliates, acting as investors for their own accounts, may
subscribe for or purchase shares and in that capacity may retain, purchase, sell, offer to sell or otherwise
deal for their own accounts in such shares and other securities of the Company or related investments in
connection with the Private Placement and/or Listing or otherwise. Accordingly, references in this Abridged
Pre-Listing Statement or the Pre-listing Statement to the shares being issued, offered, subscribed, acquired,
placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition,
placing or dealing by Macquarie and any of its affiliates acting as investors for their own accounts.
In addition Macquarie may enter into financing arrangements and swaps in connection with which it or its
affiliates may from time to time acquire, hold or dispose of shares. None of Macquarie and any of its
affiliates intends to disclose the extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligations to do so.
Date: 28/09/2015 07:30:00 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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