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INTERNATIONAL HOTEL GROUP LIMITED - Abridged pre-listing statement - Offer to subscribe for shares on the SA register and secondary listing on the AltX

Release Date: 07/10/2015 08:00
Code(s): IHG     PDF:  
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Abridged pre-listing statement - Offer to subscribe for shares on the SA register and secondary listing on the AltX

International Hotel Group Limited
(previously RBDL Investments Limited)
(Incorporated in the British Virgin Islands)
(Company number 1862176)
(JSE share code: IHG)
(ISIN: VGG7396G1046)
(“IHGL” or “the company”)


ABRIDGED PRE-LISTING STATEMENT – OPENING OF OFFER TO INVITED INVESTORS TO SUBSCRIBE FOR SHARES ON THE SOUTH AFRICAN
REGISTER OF THE COMPANY AND THE SECONDARY LISTING OF IHGL ON THE ALTERNATIVE EXCHANGE (“ALTX”) OF THE JSE


Abridged pre-listing statement relating to:

-    a capital raising of up to approximately R247 000 000 (GBP12 350 000) by way of a private placement of up to
     approximately 12 350 000 private placement shares in the company at an issue price payable in Rand which is
     equivalent to £1.00 per private placement share determined at the prevailing GBP:ZAR exchange rate at 17:00 on
     Wednesday, 7 October 2015; and

-    the subsequent listing of all the issued shares of the company by way of a secondary listing on the AltX (“listing”).

IHGL’s shares are listed on the Euro MTF Market of the LuxSE, which constitutes its primary listing.

This abridged pre-listing statement is not an invitation to the public to subscribe for shares in the company, but
is issued in compliance with the JSE Listings Requirements, for the purpose of giving information to the public
in relation to IHGL and to invited investors in relation to the private placement.

Invited investors will be contacted by and will receive application forms to participate in the private placement
on the South African share register from the bookrunner, Java Capital. Invited investors who wish to
participate in the private placement on the European register will be contacted by the company’s registrar and
listing agent.

This announcement contains the salient information in respect of IHGL, which is more fully described in the pre-
listing statement (“the full pre-listing statement”) which will be made available to invited investors on the AltX from
today. For a full appreciation and understanding of IHGL, the private placement and the listing, the full pre-listing
statement should be read in its entirety.

Terms defined in the full pre-listing statement bear the same meaning in this abridged pre-listing statement.

1.     Introduction

       The LuxSE granted the company a listing of 2 650 000 shares on the Euro MTF Market of the LuxSE with
       effect from the commencement of trade on 31 July 2015.

       The JSE has granted IHGL a listing of up to approximately 15 000 000 shares on the AltX of the JSE under the
       abbreviated name “Int Hotel” and JSE share code “IHG”, with effect from the commencement of trade on
       Wednesday, 14 October 2015, subject to the company maintaining a spread of public shareholders acceptable to
       the JSE at the point of listing on the AltX, being public shareholders holding not less than 10% of the issued
       share capital of the company

2.     Incorporation and nature of business

       IHGL was incorporated as a business company in the British Virgin Islands on 10 February 2015. The
       company’s financial year end is 31 August. IHGL’s shares were listed on the LuxSE on Friday, 31 July 2015.

       On 31 March 2015, the company acquired all the shares in Sandgate which owns the Worcester Whitehouse
       Hotel. On 28 August 2015, the company completed the acquisitions of all the shares in Redefine Belvedere and
       Redefine Dunstable which own the Holiday Inn Express, Dunstable and Travelodge, Belvedere, respectively.
                                                                                                                        
3.   Investment and growth strategy

     The company will seek to invest in newly acquired established hotels and in hotel development projects where
     it will create and own the finished product. It will target hotels which are let on long leases to good covenants as
     well as hotels under management contracts to the Redefine BDL Hotel Group and other highly regarded
     management companies. The company aims to acquire assets that can deliver consistent cash returns of circa
     7% on equity per annum. The focus will be on the limited service budget and mid-tier hotel sectors, generally
     with hotels with over 100 rooms. There will be no investment in luxury or 5 star assets.

     The company will target assets situated in the UK and European countries, with current pipeline assets being
     situated mainly in the UK. The company will focus on countries with a stable political and economic outlook,
     clear property title, rule of law, a relatively diversified economy, strong urbanisation trends and strong GDP
     growth. The company will endeavour to focus on first tier cities in each country with some exposure to second
     tier cities.

4.   Prospects

     The directors of the company believe that the company has excellent prospects. The board is confident the hotel
     properties that it has already acquired, together with the various potential investments in the pipeline, current
     market conditions and access to future deal flow, will provide the company with a yield in internationally stable
     currencies and high growth potential. This should in turn result in meaningful capital appreciation for investors
     from the company acquiring undervalued income generating assets and high growth development opportunities.

     The company will fund its pipeline through a combination of new debt and equity capital. The board anticipates
     that it will in the short-term be in a position to formally conclude agreements for a number of acquisitions in the
     UK. These acquisitions will be funded through substantial new capital raisings. In this regard, the company
     intends to raise up to approximately GBP20 million in the short-term.

5.   Directors

     Names, age and nationality          Business address          Qualification            Capacity
     Helder Pereira                      Redefine BDL Hotel        HCIMA – Higher           Chief executive officer
     60                                  Group, 10th Floor, The    National Diploma
     Portuguese/South African            Mille, 1000 Great         (Honours),
                                         West Road, Brentford,     Management
                                         London, TW8 9DW           Development
     
     David Hart                          Redefine BDL Hotel        CA, BSc (Honours),       Chief financial officer
     36                                  Group, 10th Floor, The    Mathematics,
     British                             Mille, 1000 Great         Statistics and
                                         West Road, Brentford,     Accounting
                                         London, TW8 9DW
     
     Peter Todd                          3rd Floor, La             B.Comm, LLB, H           Chairman, non-executive
     56                                  Croisette, Grand Baie,    Dip Tax                  director
     British/South African               Mauritius
    
     Miles Walton                        Coastal Building,         IMC, TEP, FCIS           Non-executive director
     51                                  Wickham’s Cay II,
     British                             Road Town, Tortola,
                                         British Virgin Islands
     Daniel Romburgh                     3rd Floor, La             Bachelor of              Independent non-executive
     33                                  Croisette, Grand Baie,    Commerce (Hons)          director
     South African                       Mauritius                 Financial Analysis
                                                                   and Portfolio
                                                                   Management


6.   Asset management

     The company has entered into an investment management agreement with RBDL Capital Managers Limited, as
     investment manager. Full details of the investment manager and the investment management agreement are set
     out in paragraph 3.3 and Annexure 7 of the full pre-listing statement.
                                                                                                                                                             
7.   Summarised forecast information

     Set out below are the summarised estimate statement of comprehensive income and forecast statement of
     comprehensive income (“summarised estimate and forecast”) for the period ended 31 August 2015
     (“estimate period”) and the year ending 31 August 2016 (“forecast period”), respectively. The summarised
     estimate and forecast information is based on the assumption that the private placement is fully subscribed and
     that GBP12 350 000 is raised through the issue of 12 350 0000 private placement shares in the company at an
     issue price of £1.00 per private placement share. The summarised estimate and forecast comprise forecast
     figures for the duration of the estimate period and forecast period.

     The summarised estimate and forecast, including the assumptions on which they are based and the financial
     information from which they are prepared, are the responsibility of the directors of IHGL.

     The summarised estimate and forecast have been prepared in compliance with IFRS and in accordance with
     IHGL’s accounting policies.

                                                                                               Estimate for the           Forecast for the
                                                                                               period ended 31            year ending
                                                                                               August 2015                31 August 2016
                                                                                                           GBP                         GBP
     Number of shares in issue                                                                       2 650 000                  15 000 000
     Weighted average number of shares in issue and to be issued                                     1 110 822                  15 000 000
     Basic and diluted basic earnings per share (pence)                                                 (11.71)                       5.03
     Headline and diluted headline earnings per share (pence)                                           (11.71)                       5.03
     Distribution per share (pence)*                                                                          -                        3.75
     * There are no reconciliation items between the profit for the period attributable to shareholders and earnings available for distribution.

     The figures set out above are extracted from detailed estimate and forecast for the period ended 31 August 2015
     and the year ending 31 August 2016 and have been reported on by the independent reporting accountant,
     Deloitte & Touche, Registered Auditors. The detailed estimate and forecast, the independent reporting
     accountants’ reports on the detailed estimate and forecast and the assumptions on which the detailed estimate
     and forecast are based, are set out in the full pre-listing statement.

8.   Details of the private placement

     The private placement to raise up to approximately R247 000 000 (GBP12 350 000) is being undertaken by the
     company way of an offer for subscription to invited investors only for up to approximately 12 350 000 private
     placement shares in the company at an issue price payable in Rand which is equivalent to £1.00 per private
     placement share determined at the prevailing GBP:ZAR exchange rate at 17:00 on Wednesday, 7 October 2015.

     Applications must be for a minimum subscription of R1 000 000 per investor acting as principal.

     The private placement will not be underwritten.

     This abridged pre-listing statement primarily concerns invited investors who may apply to subscribe for private
     placement shares that will be listed on the South African share register. Invited investors who wish to apply for
     private placement for shares to be listed on the European share register are advised to contact the LuxSE listing
     agent, further details of which are set out in the Corporate Information section of the full PLS, for further
     instructions

9.   Purposes of the private placement

     The main purposes of the private placement and the listing are to:

     -    enhance potential investors’ awareness of the company;

     -    improve the depth and spread of the shareholder base of the company, thereby improving liquidity in the
          trading of its securities on the AltX;

     -    provide invited investors the opportunity to participate directly in the income streams and future capital
          growth of the company; and

     -    provide invited investors with an additional market for trading the company shares on the AltX.
                                                                                                                                         

      The private placement is open to invited investors only.

      The following parties may not participate in the private placement:

      -    any person who may not lawfully participate in the private placement; and/or

      -    any investor who has not been invited to participate; and/or

      -    any person acting on behalf of a minor or deceased estate.

      The private placement shares issued in terms of the full pre-listing statement will be allotted subject to the
      provisions of the MoA and the AoA and will rank pari passu in all respects including dividends, with all
      existing issued shares in the company.

      There are no convertibility or redemption provisions relating to any IHGL shares.

      The private placement shares will not be issued in certificated form.

      No fractions of private placement shares will be offered in terms of the private placement.

10.   Salient dates and times

                                                                                                                           2015
      Opening date of the SA private placement (09:00) on                                                  Wednesday, 7 October

      Closing date of the SA private placement (17:00) on                                                  Wednesday, 7 October

      Results of the SA private placement released on SENS on                                               Thursday, 8 October

      Notification of allotments by                                                                         Thursday, 8 October

      Listing of shares on the AltX on                                                                    Wednesday, 14 October

      Listing of the private placement shares on the Euro-MTF market at the
      commencement of trade on                                                                            Wednesday, 14 October

      Accounts at CSDP or broker updated and debited in respect of
      dematerialised shareholders                                                                         Wednesday, 14 October
      The dates and times in this abridged pre-listing statement are subject to change and any changes will be communicated on SENS and on
      the LuxSE website.

11.   Pre-commitments

      As at the last practicable date, the company has not received any pre-commitments.

12.   Application of proceeds

      The proceeds from the private placement together with existing cash resources will be used to settle the costs
      associated with the private placement, the listing on the LuxSE and the JSE and the purchase considerations
      payable for the Dunstable acquisition and the Belvedere acquisition.

13.   Condition to which the SA private placement and the listing are subject

      The SA private placement and the listing are subject to the company maintaining a spread of public
      shareholders acceptable to the JSE at the point of listing on the AltX, being public shareholders holding not less
      than 10% of the issued share capital of the company.
                                                                                                            
14.   Availability of the pre-listing statement

      Copies of the full pre-listing statement may be obtained between 8:30 and 17:00 (SA time) on business days
      from Wednesday, 7 October 2015 to Wednesday, 14 October 2015 at the following places and on the
      company’s website at www.internationalhotelgrouplimited.com:

      •     International Hotel Group Limited

            Coastal Building, Wickham’s Cay II, Road Town, Tortola, British Virgin Islands

      •     Java Capital Proprietary Limited

            6A Sandown Valley Crescent, Sandown, Sandton, South Africa

      •     Computershare Investor Services Proprietary Limited

            Ground Floor, 70 Marshall Street, Johannesburg, South Africa

      •     M Partners S.à r.1.

            56, rue Charles Martel, L-2134, Luxembourg


7 October 2015


Corporate advisor, JSE sponsor and bookrunner in respect of the SA private placement
Java Capital


LuxSE listing agent
M Partners


Independent reporting accountants and auditors
Deloitte



Date: 07/10/2015 08:00:00 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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