Wrap Text
Listing Of Stadio On The Main Board Of The JSE Limited And Abridged Pre-Listing Statement
STADIO HOLDINGS LIMITED
(Previously Embury Holdings Proprietary Limited)
(Incorporated in the Republic of South Africa)
Registration number: 2016/371398/06
JSE share code: SDO
ISIN ZAE000248662
(“STADIO”)
LISTING OF STADIO ON THE MAIN BOARD OF THE JSE LIMITED (“JSE”) AND
ABRIDGED PRE-LISTING STATEMENT
1. INTRODUCTION
1.1. Curro Holdings Limited (“Curro”) is currently the largest
for-profit independent school group in Africa, providing
education services to approximately 47 000 learners in
127 schools across South Africa and Namibia. Curro has been
a proud provider of pre-school and school-based education
since 1998 and was listed on the JSE in 2011.
1.2. In 2013, Curro acquired the Embury Institute for Higher
Education Proprietary Limited (“Embury”), a registered
private higher education institution, which offers
accredited undergraduate teacher-education qualifications.
The acquisition of Embury was Curro’s first investment in
the post-school education environment.
1.3. In light of the opportunities presented in the post-school
education market, it was a natural progression for Curro to
develop and further expand its higher education offering.
The Latin word “Curro”, can be translated into English as “I
run” and the Italian word “Stadio”, can be translated into
English as “stadium”. In ancient Rome, long-distance races
required athletes to run from stadium to stadium to reach
the finish line. The progression from Curro to STADIO,
symbolises the fact that STADIO is the way in which the race
for education will be continued. It also epitomises the ethos
of “continuing” (lifelong) learning.
1.4. On 28 February 2017, Curro announced its intention to
unbundle its entire interest in STADIO and to list STADIO on
the JSE.
1.5. Curro released a further announcement today, advising its
shareholders (“Curro Shareholders”) that the board of
directors of Curro (“Curro Board”) has resolved to unbundle
410 561 153 ordinary shares in STADIO (“STADIO Shares”) to
Curro Shareholders in the ratio of one STADIO Share for every
one ordinary share in the share capital of Curro held on the
record date of the unbundling (“the Unbundling”), comprising
91.7% of the issued share capital of STADIO (the remaining
8.3% of the issued share capital of STADIO is held by the
vendors of the South African School of Motion Picture Medium
and Live Performance Proprietary Limited (“AFDA”), that was
acquired by STADIO prior to the date of this announcement).
1.6. Shareholders are herewith advised that the JSE has granted
STADIO a listing by way of introduction of all its issued
ordinary shares on the main board of the JSE (“the Listing”),
under the abbreviated name “STADIO”, share code “SDO” and
ISIN ZAE000248662, with effect from the commencement of trade
on Tuesday, 3 October 2017 (“Listing Date”). STADIO will be
listed in the “Specialised Consumer Services” sector of the
main board.
2. PUBLICATION AND DISTRIBUTION OF PRE-LISTING STATEMENT
2.1. The pre-listing statement in relation to the Listing, which
contains detailed information regarding STADIO (“Pre-listing
Statement”), was published today, Friday, 15 September 2017
on STADIO’s website (www.stadio.co.za).
2.2. STADIO will distribute the Pre-listing Statement to Curro
Shareholders (who will receive STADIO Shares in terms of the
Unbundling) on Monday, 18 September 2017.
2.3. Terms appearing in title case in this announcement and that
are not otherwise defined herein, shall bear the meanings
assigned to them in the Pre-listing Statement. Shareholders
are referred to the footnotes and references contained in
the Pre-listing Statement for the sources of the various
statistics and facts contained in this announcement.
3. SALIENT DATES AND TIMES RELATING TO THE UNBUNDLING AND LISTING
The salient dates and times relating to the Unbundling and the
Listing are set out below:
2017
Unbundling declaration and finalisation Friday, 15 September
announcement published by Curro on SENS on
Abridged Pre-listing Statement published Friday, 15 September
on SENS on
Unbundling declaration and finalisation Monday, 18 September
announcement published by Curro in the
press on
Abridged Pre-listing Statement published Monday, 18 September
in the press on
Last day to trade for Curro Shareholders Monday, 2 October
to be entitled to participate in the
Unbundling
Listing of STADIO Shares under the Tuesday, 3 October
abbreviated name “STADIO”, share code “SDO”
and ISIN ZAE000248662, on the main board
at commencement of trade on
Record date for the Unbundling on Thursday, 5 October
Accounts at CSDP or Broker updated in Friday, 6 October
respect of Dematerialised Shareholders on
Share certificates posted to Certificated Friday, 6 October
Shareholders by registered post on or about
Notes:
1. The above dates are subject to change. Any such change will be
announced on SENS.
2. All references to dates and times are to local dates and times
in South Africa.
3. Share certificates may not be dematerialised or re-
materialised between Tuesday, 3 October 2017 and Thursday,
5 October 2017, both dates included.
4. ABRIDGED PRE-LISTING STATEMENT OF STADIO
The Abridged Pre-Listing Statement appearing below, is not an
invitation to the public to subscribe for STADIO Shares, but
is issued in compliance with the JSE Listings Requirements for
the purpose of providing information to the public and
investors in respect of STADIO.
4.1. INDUSTRY BACKGROUND
4.1.1. “Education is the civil rights struggle of our generation
requiring the biggest expansion of educational opportunity
in modern history”.
4.1.2. Education is indisputably fundamental for the development
of the necessary skills and intellectual capital that will
ultimately promote economic growth and development. Access
to education plays a pivotal role in promoting equality,
democracy and ultimately, social justice.
4.1.3. Whilst the early childhood development and basic education
sectors are vitally important to laying the educational
foundation for individuals, it is acknowledged that
students who further their post-school education obtain a
wide range of financial, personal and other lifelong
benefits. Similarly, taxpayers and society as a whole
derives a multitude of direct and indirect benefits when
citizens have access to post-school education.
4.1.4. An expanding post-school education system has become a
norm of modernisation and the demand for post-school
education continues to grow.
4.1.5. Globally, the number of students enrolled, specifically at
higher education institutions, more than doubled between
2000 to 2015, from 99.7 million students to 213.7 million
students.
4.1.6. This growth has arisen mainly from:
4.1.6.1. a growing population (including a growing middle-class
population);
4.1.6.2. an increase in the number of school leavers qualifying
to participate in post-school education; and
4.1.6.3. an increase in the actual Gross Tertiary Enrolment Rate
(“GTER”) of students typically attending higher
education institutions (GTER defined as total student
enrolments divided by the school leaver age-cohort in
the national population i.e. the population typically
between the ages of 18 and 24 years). The global average
of the GTER was 32.9% increasing to 34% in 2014 and is
expected to reach about 50% by 2034. GTER rates are on
average 76,6% in Northern and Western Europe, 43.9% in
Latin America and the Caribbean and 8.2% in Sub-Saharan
Africa.
4.1.7. In South Africa, the higher education market is made up of
26 public higher education institutions (with an aggregate
of 985 212 students in 2015) and 124 private higher
education institutions (with an aggregate of 147 210
students in 2015), which collectively had a total of
1 132 422 students in 2015.
4.1.8. As with global trends, the demand for higher education in
South Africa has also increased, with the number of total
students enrolled in higher education institutions more
than doubling from approximately 557 000 students in 2000
to 1 132 422 students in 2015.
4.1.9. Over the same period the number of first-time students
enrolled at public higher education institutions increased
by approximately 75%, from 98 095 in 2000 to 171 930 in
2015, with the bulk of the growth arising from UNISA (a
dedicated distance learning institution) and North West
University (with its newly introduced distance learning
focus).
4.1.10. Private higher education institutions only account for 13%
of the total higher education market in South Africa, with
147 210 enrolled students in 2015, up from 90 767 enrolled
students in 2009. In Brazil and Chile, for example, total
enrolments in private higher education are closer to 71%
in 2012 and 84% in 2013, respectively. For Organization
for Economic Cooperation and Development (OECD) countries,
the corresponding figure was approximately 31% in 2013.
4.1.11. It is an indisputable fact that the demand for private
higher education in South Africa continues to increase, as
is evident from the following facts:
4.1.11.1. the number of school leavers qualifying for post-school
education has increased by 25% from approximately
334 718 students in 2009 to 442 672 students in 2016;
4.1.11.2. even with the introduction of two new public higher
education universities in the Northern Cape and
Mpumalanga in 2014, at least 60% of school leavers per
annum who qualify for further study cannot be
accommodated by the public higher education sector. With
the increasing numbers of successful school leavers, the
impact of this shortfall is compounded every year; and
4.1.11.3. in 2015, the GTER for South African universities was
approximately 19% up from 14% in 2000. The National
Development Plan (NDP) has set a target to increase
higher education participation to 1.6 million students
in 2030, however, to meet the global average GTER, STADIO
estimates that the number of participants should
increase to approximately 2 million students.
4.1.12. The future growth of student enrolments in South African
public universities is however constrained by the limited
infrastructure and other resource capacity issues. It is
estimated that the expected current maximum capacity of
first-year enrolments at public higher education
institutions is approximately 180 000 students.
4.1.13. Adding a further constraint to cater for the increased
demand is the enrolment cap based on the limited available
budget from the national fiscus that is applied to public
higher education institutions by the DHET. This cap
dictates the maximum new students that may be admitted
annually that will be subsidised by the state.
4.1.14. Over and above the capacity (i.e. infrastructure and
financial) shortages, public higher education institutions
face the following further material challenges:
4.1.14.1. High drop-out rates, low graduation rates and the long
time to graduate
Since 1994, the increase in the number of students
accessing higher education has been significant,
particularly amongst previously marginalised groups.
However, the success rates of these higher student
numbers have not been proportionately evident. Instead,
the higher access rates are accompanied by equally higher
attrition rates (mainly as a consequence of low output
and throughput rates). In 2013, the CHE reported that as
many as 55% of students never graduated. In 2015, the
statistics from DHET indicated that average graduation
rates at public higher education institutions ranged
between 13% and 43% (with an overall 3.3% increase from
2014).
4.1.14.2. Limited articulation possibilities
Given the constraining impact of the enrolment cap on
public higher education institutions, students who drop
out and/or are academically cancelled have limited
opportunities to further their studies within the public
sector due to a lack of nationally applicable
articulation arrangements allowing them to continue
their studies at other institutions in the post school
sector.
4.1.14.3. Increase in operational costs of public higher education
institutions
The operating expenses of public higher education
institutions increase annually, which means that further
pressure will be placed on government to increase funding
to these institutions. If the state cannot increase its
funding, these institutions will have to look to other
sources of income to support themselves, including
student fees.
4.1.15. Noting the challenges confronting public higher education
and training, and the acknowledgement of the critical
importance of higher education in growth and development,
the private sector is an ideal partner to support and
assist the state to address and mitigate its risks vis-à-
vis post-school education and training. This view is
supported by the DHET, which has recognised the critical
role of private institutions in expanding opportunities
specifically for higher education and training in South
Africa. By 2030, the DHET would like to see 1 million
students at private higher education institutions as an
element of national growth and development.
4.2. BUSINESS RATIONALE OF STADIO
4.2.1. The current unemployment rate in South Africa remains
critically high at 27.7%.
4.2.2. Education and training remains vitally important to reduce
unemployment and promote economic growth.
4.2.3. Research further indicates that in South Africa, the
graduate unemployment rate is at about 5%, implying that
a degree or post school qualification dramatically
increases the probability of securing a job and therefore
economic security and stability.
4.2.4. As such, the board of directors of STADIO (“STADIO Board”)
believes that STADIO, through its subsidiaries, can play
a meaningful role by:
4.2.4.1. Widening access to higher education, by:
- investing capital to create capacity to accommodate
the increasing demand for higher education (i.e. with
competing socio-economic demands the government does
not have the financial and operational resources to
address this demand);
- providing seamless access and articulation pathways
through a compendium of qualifications that will allow
for progression from higher certificate to degree
qualifications;
- ensuring a sufficiently diverse programme and
qualification mix that caters to both school-leavers,
working adults and the post-graduate student, within
the framework of lifelong learning; and
- enhancing the use of distance learning which is both
more affordable and will increase the breadth of
access;
4.2.4.2. Offering innovative curricula and programmes that are
relevant and relate to the world of work and the needs
of society i.e. programmes that will provide students
with a real chance of finding or creating employment
post-qualification but which will equally ensure that
STADIO graduates have a fundamental understanding of
responsible citizenship and global awareness; and
4.2.4.3. Focussing on graduate success and throughput (i.e.
access with success), as follows:
- STADIO recognises that a number of higher education
students do not progress academically as a result of
not achieving examination admission. STADIO believes
that, having registered a student, the higher
education institution must take all reasonable and
responsible steps to facilitate the success of such
student, including the implementation of the ‘credit
retry’ principle as an integral element of its
teaching and learning methodology. The ‘credit retry’
principle focuses on identifying students at risk of
not achieving examination admission and providing
adaptive further academic support and/or formative
assessment opportunities that will improve their
chances to sit for the examination, pass the
examination and graduate successfully; and
- Private higher education institutions and STADIO
particularly, introduce an opportunity for students
who drop out and/or are academically cancelled, to
ensure that no learning is wasted. STADIO’s academic
ethos promotes articulation and mobility between and
among its own institutions as well as the public
higher education sector through the application of
existing DHET policies of credit accumulation and
transfer, recognition of prior learning, and
recognition and equivalence of degrees.
4.2.5. Notwithstanding STADIO’s aforementioned intentions, STADIO
is also cognisant that although increasing infrastructure
is one pillar in the “access” discussion, a second pillar,
given that further state funding is an unlikely option, is
sustainable financial support for students. STADIO is
considering several models that may be implemented
individually or collectively and includes academic merit
and needs bursaries and scholarships (estimated at between
1% and 3% of revenue per annum). Furthermore, STADIO
believes that successful businesses in both the listed and
unlisted environments can use their corporate, social
responsibility funds to provide bursaries for students to
study programmes which will provide young adults with the
skillsets relevant to the world of work. By monitoring the
learning success of these students, these companies will
find comfort that their money is appropriately used for
the benefit of the country.
4.2.6. The intention of the Unbundling and Listing is to create
a separate listed business, focussing on higher education,
with a strong management team and a dedicated anchor
shareholder (namely PSG Group Limited) in order to become
a leader in the higher education market in South Africa.
4.2.7. To achieve its goal, STADIO intends to create a
“Multiversity”. A Multiversity is defined as a large,
diverse institution of higher learning created to educate
for life and for a profession, and to grant degrees,
(including higher certificates and diplomas). Whereas a
university implies “sameness” and the integration of all
knowledge, a Multiversity implies a DIVERSITY of knowledge
with diverse institutions catering for the diverse and
relevant needs of the South African market place. The
concept of a Multiversity further respects the uniqueness
of every student.
4.2.8. As a Multiversity, STADIO will own various registered
higher education institutions, which will retain their own
brands, campuses and management teams, but will share a
common ethos and benefit from the synergies,
infrastructure and shared services arising from the STADIO
Group structure.
4.2.9. STADIO is an investment holding company that focusses on
the acquisition of, investment in, growth and development
of higher education institutions to assist in meeting the
demand for quality and relevant higher education
programmes in Southern Africa. It intends to acquire and
grow existing registered higher education brands, fund
further expansions of existing brands and oversee the
greenfield development of new campuses.
4.2.10. STADIO, through its subsidiaries, will have diverse
offerings including undergraduate and post graduate
programmes (higher certificates, diplomas and degrees),
geared to providing students with a real chance of creating
their own employment opportunities (entrepreneurship) or
finding employment post-qualification. As the investment
holding company of the various education institutions,
STADIO will monitor the business success and drive
efficiencies, innovations and best practices across the
STADIO Group.
4.2.11. The STADIO Group is committed to being relevant to the
higher educational needs of the country and the broader
African higher educational and development agenda,
however, the STADIO Group aims equally to be a recognised
and valued participant in the international milieu of
higher education. For this and other reasons, as a business
STADIO will provide education through its various
institutions and brands in the English language.
4.2.12. At the Listing Date, the STADIO Group will have:
- 3 registered higher education institutions, namely
Embury, AFDA and the Southern Business School (as more
fully described below) that have been operating for
between 17 and 23 years;
- 5 faculties, namely (i) Education; (ii) Commerce and
Business; (iii) IT; (iv) Law and (v) Arts;
- 28 accredited programmes, ranging from higher
certificates and diplomas to post graduate degrees
(including masters’ degrees);
- approximately 22 new courses/programmes in the process
of development and accreditation, which will be offered
by the STADIO Group from the commencement of the 2018,
2019 or 2020 academic years;
- 10 registered campuses/sites, including sites in
Gauteng, the Western Cape, Kwa-Zulu Natal, Eastern
Cape, Botswana (Gaborone) and Namibia (Windhoek); and
- approximately 12 979 registered students.
4.2.13. STADIO will grow its business by focussing on:
4.2.13.1. the acquisition of reputable higher education
institutions, aligned with STADIO’s Multiversity
strategy and ethos, with the aim to accumulate a wide
spread of programmes and qualifications in various
fields of higher education;
4.2.13.2. optimising the utilisation of STADIO’s newly constructed
facilities, namely:
- Musgrave (Kwa-Zulu Natal) (contact learning capacity
of 2 700 students);
- Montana (Pretoria) (contact learning capacity of 1 700
students); and
- Waterfall (Midrand) (contact learning capacity of
1 700 students);
4.2.13.3. promoting the growth of existing brands (i.e. Embury,
AFDA, and the Southern Business School). This will
include:
- geographic expansion through rolling out the brands
to new locations;
- accrediting further undergraduate and post-graduate
degrees, diplomas and higher certificate
qualifications across various brands;
- investing in focused marketing across the various
brands and products of the STADIO Group; and
- expanding distance learning offerings across the
brands (key qualifications to be accredited on both
distance learning and contact learning modes of
delivery); and
4.2.13.4. expanding into greenfield opportunities by exploring its
offering into new faculties, such as Engineering as well
as Health and Sciences, in due course.
4.3. OVERVIEW OF THE STADIO GROUP
The various businesses of the STADIO Group are detailed
below:
4.3.1. Embury Institute for Higher Education Proprietary Limited
(Embury) (100%)
4.3.1.1. Embury is a South African registered higher education
institution (DHET registration number 2008/HE07/004)
which currently offers 8 accredited undergraduate
teacher-education qualifications through both contact
and distance learning modes, to prepare teachers for
working in South African schools. Embury currently has
approximately 1 100 students registered for contact and
distance learning qualifications at its Morningside
campus in Durban (Kwa-Zulu Natal). Currently the
Morningside campus is at capacity which has limited
Embury’s growth potential in Kwa-Zulu Natal to date.
During 2017, Embury (through STADIO) acquired and
developed the Musgrave campus in order to meet the
increased demand. The Musgrave campus will be able to
accommodate a maximum capacity of 2 700 students. The
current Embury Morningside campus will thus relocate to
the newly constructed Musgrave campus at the beginning
of 2018 and strongly position Embury for its next phase
of growth in Kwa-Zulu Natal.
4.3.1.2. Embury is in the process of expanding its national
footprint and academic programme offerings. The STADIO
Board believes that there exists a large opportunity for
teacher-education qualifications in Gauteng. As such in
January 2018, Embury will open two new campuses in
Gauteng, one in Waterfall Estate (Midrand) and the other
in Montana (Pretoria). It is estimated that these new
campuses will take between 3 and 4 years (i.e. between
2020 and 2021) to breakeven, as the Embury brand gains
traction in Gauteng, and thereafter both campuses are
expected to contribute meaningfully to the profits of
the STADIO Group.
4.3.1.3. Embury is also currently in the process of developing
17 new contact and distance learning qualifications for
its teacher education and economic and management
sciences faculties. Embury has developed and submitted
a number of economic and management sciences
qualifications, including its own PGDA, to the CHE for
accreditation. Embury is also in the process of obtaining
SAICA accreditation for this PGDA programme.
4.3.1.4. Furthermore, Embury has entered into an agreement to
acquire the business, intellectual property and
employees of CA Connect, with effect from
1 January 2018. CA Connect is a private education
business which currently collaborates with a higher
education institution in offering a one-year PGDA, which
allows students to write the “Initial Test of
Competence”, being the first of SAICA’s professional
exams for students on the path to becoming registered
Chartered Accountants. The CA Connect team will join and
assist in the development of Embury’s new economic and
management sciences faculty from 1 January 2018.
4.3.2. The South African School of Motion Picture Medium and Live
Performance Proprietary Limited (AFDA) (100%)
4.3.2.1. AFDA is a South African registered higher education
institution, (DHET registration no. 2001/HEO7/012) and
offers 9 fully accredited programmes ranging from higher
certificates to masters’ degrees, primarily focused on
the film, television and live performance industry.
4.3.2.2. AFDA was founded in 1994 by Garth Holmes, Bata Passchier
and Deon Opperman. Since then it has grown from
6 students, to a premier institution of its kind in the
world, with approximately 1 950 students on campuses in
Johannesburg, Cape Town, Durban and Port Elizabeth. AFDA
has grown its student numbers consistently from
approximately 1 570 students in 2015 to approximately
1 775 students in 2016 and to approximately 1 950
students currently enrolled at its 4 South African
campuses. These current campuses can accommodate an
approximate student capacity of 4 000 students. AFDA
will further look to expand its offerings to locations
such as Pretoria and Soweto over time.
4.3.2.3. As a further part of its strategy to expand its brand
offering, and prepare graduates for the demands of a
digital economy, AFDA launched its business innovation
and technology degree offering, to address the exciting
exponential development of the creative economy.
4.3.2.4. It is the intention of AFDA to broaden the scope of its
offering in the connected creative ecology, by
increasing its choice of disciplines, including
interior, graphic and fashion design, advertising,
virtual reality, 3D printing, music, sound and
application development to produce innovative and
profitable business concepts, popular culture, media and
entertainment, for both local and global markets.
4.3.3. Southern Business School Proprietary Limited (Southern
Business School) (74%)
4.3.3.1. The Southern Business School is a South African
registered higher education institution (DHET
registration number: 2002/HE07/015), with its
Subsidiary, Southern Business School Namibia, being
recognised by the Namibian Qualification Authority. The
Southern Business School has 11 accredited distance
learning programmes (ranging from higher certificates to
masters’ degrees) with 3 academic schools, namely the
School of Business and Economics, the School of Safety
in Society and the School of Law, which offer dedicated
formal programmes as well as short courses.
4.3.3.2. Founded by Chris Vorster in 1996, the Southern Business
School, which originally opened its doors with
38 students in 1996, offers accredited programmes
through distance learning. The business has reflected
stellar growth in student numbers from approximately
6 905 students in 2015, to approximately 8 533 students
in 2016 and to approximately 9 956 students in 2017,
enrolled in South Africa and Namibia.
4.3.3.3. As a contributor to growth, in 2016, the Southern
Business School launched a Bachelor of Commerce (in Law)
degree as part of its strategy to expand its range of
programmes offered.
4.3.3.4. The Southern Business School will continue to seek out
growth opportunities (in South Africa and Namibia) by
introducing new programmes as well as increasing its
presence, through effective marketing, and extending its
reach geographically. Being a distance learning
provider, the Southern Business School will not require
the physical building infrastructure required, for
example, by the Embury or AFDA businesses. This business
is thus able to scale its operations and widen access
with investment in appropriate information technology
improvements over time.
4.4. RATIONALE FOR THE UNBUNDLING AND LISTING
4.4.1. In light of the significant opportunities in the post-
school education market and the capital required to pursue
these opportunities, the Curro Board undertook to separate
the “schools” and higher education businesses, to ensure
that each business has its own dedicated management team,
with a dedicated focus to effectively pursue their growth
strategies in separate distinct markets that both offer
attractive room for growth.
4.4.2. Thus, the ultimate rationale for the Unbundling and the
Listing is to:
4.4.2.1. provide STADIO with access to the equity and debt capital
markets in order to facilitate growth;
4.4.2.2. enable STADIO to raise funds from its Shareholders for
the planned expansion (acquisitive and organic) of
STADIO by way of a rights offer in a listed environment;
4.4.2.3. enhance STADIO’s deal making ability, as listed shares
can be more readily utilised for the purposes of
acquisitions;
4.4.2.4. provide additional credibility for STADIO to its clients
and debt funders; and
4.4.2.5. provide Shareholders with a liquid, tradable security
within a regulated environment, with a market determined
share price and an exit mechanism for those Shareholders
who wish to exit.
4.5. PROSPECTS
4.5.1. STADIO’s objective is to facilitate, through its
subsidiaries, access to quality higher education, giving
its students realistic opportunities of finding or
creating future employment.
4.5.2. Through implementing its growth strategy, the details of
which are set out in paragraph 4.2.13 above, the STADIO
Group’s objective is to increase its student enrolments
(across both the contact and distance learning modes of
delivery) initially to 35 000 students in the medium term
and then to approximately 56 000 students by 2026, earning
a profit after taxation of approximately R500 million
(also by 2026). STADIO believes that the aforementioned
target can be achieved through deploying: (i) the capital
of R840 million raised from the Rights Offer and the B-
BBEE Transaction; (ii) internally generated cash; and
(iii) debt funding.
PLEASE NOTE THAT THE AFOREGOING STATEMENT OF STADIO’S
OBJECTIVE HAS NOT BEEN REVIEWED OR REPORTED ON BY STADIO’S
AUDITORS OR BY AN INDEPENDENT REPORTING ACCOUNTANT NOR IS
SAME GUARANTEED. IT IS HOWEVER AN OBJECTIVE THAT STADIO
WISHES TO ACHIEVE BY 2026.
4.5.3. Over time however, STADIO’s vision is to increase its reach
to 100 000 students.
4.5.4. Given the opportunities in the sector and the demand for
quality higher education, the STADIO Board is of the
opinion that STADIO’s prospects are very favourable.
4.6. CAPITAL RAISING
4.6.1. STADIO will, following the Listing and concurrently with
the B-BBEE Transaction, raise capital from its
Shareholders by way of the Rights Offer. STADIO intends
raising approximately R640 million through the
aforementioned Rights Offer and up to R200 million through
the B-BBEE Transaction (details of which are set out in
paragraph 4.7 below), resulting in a total capital raising
of up to R840 million. The details of the Rights Offer
will be disclosed to Shareholders in a SENS announcement
to be published on or about 3 October 2017 and in the
Rights Offer Circular to be published by STADIO on or about
9 October 2017.
4.6.2. PSG Financial Services Limited (“PSG Financial Services”),
who will hold approximately 51% of STADIO post the
Unbundling, has irrevocably undertaken that it and/or PSG
Alpha Investments Proprietary Limited (a subsidiary of PSG
Financial Services), will follow all of their rights in
terms of the Rights Offer. PSG Financial Services has also
irrevocably undertaken to underwrite the balance of the
Rights Offer.
4.6.3. The capital raised in terms of the Rights Offer will be
used to fund the cash settled portions of the purchase
considerations payable in terms of the AFDA Acquisition
and the SBS Acquisition. It will further be utilised to
fund the further acquisitions which are in various stages
of negotiation, the transaction costs related to the
various acquisitions as well as the costs of the capital
raising and the Listing.
4.6.4. The capital raised in terms of the B-BBEE Transaction will
be used to fund the acquisition of land and the development
of existing campuses to facilitate growth, for working
capital purposes and to build up the capital resources for
future opportunities.
4.6.5. Assuming all the aforementioned capital is successfully
raised, post settlement of the purchase considerations
payable in terms of the AFDA Acquisition and the SBS
Acquisition, STADIO will have excess cash on hand of
approximately R430 million, which will specifically be
utilised to fund further acquisitions that are in various
stages of negotiations. STADIO believes that this capital
will be fully invested within the next 6 to 12 months.
4.7. BROAD-BASED BLACK ECONOMIC EMPOWERMENT STRATEGY
4.7.1. STADIO recognises the importance of social and economic
transformation in the South African environment and
intends, shortly after the Listing and concurrently with
the Rights Offer, to implement the B-BBEE Transaction by
way of a private placement of STADIO Shares to Black People
and Brimstone Investment Corporation Limited
(“Brimstone”), as part of its larger B-BBEE strategy.
4.7.2. Brimstone is a black controlled and managed investment
holding company listed on the JSE, with investments across
various sectors including financial services, food and
healthcare.
4.7.3. On 23 August 2017, Shareholders approved the B-BBEE
Transaction on the following terms:
4.7.3.1. STADIO will use its reasonable endeavours to place
Placement Shares up to a maximum value of R100 million
with Black People, including Black Employees
(the “Individual Placement”);
4.7.3.2. Placement Shares to the value of R100 million will be
placed with Brimstone (the “Brimstone Placement”);
4.7.3.3. Brimstone has irrevocably agreed to underwrite the
Individual Placement and will subscribe for all
Placement Shares which are not placed with Black People,
including Black Employees, in terms of the Individual
Placement;
4.7.3.4. the minimum subscription amount per Black Employee in
terms of the Individual Placement shall be R20 000;
4.7.3.5. the minimum subscription amount per Black People,
excluding Black Employees, in terms of the Individual
Placement is R50 000;
4.7.3.6. the price at which the Placement Shares will be issued
will be the lower of:
- R2.96 per Placement Share; and
- the VWAP of a STADIO Share for the 30 trading day
period after the Listing Date, less a 20% discount
(“Discounted Price”), provided that if the Discounted
Price is lower than R2.50 per Placement Share, the
STADIO Board will have the right, in its sole
discretion, to decide whether or not to proceed with
the proposed B-BBEE Transaction; and
4.7.4. all Placement Shares issued as part of the B-BBEE
Transaction will be subject to a lock-in period of seven
years, during which period, participants in the B-BBEE
Transaction shall only be allowed to sell their Placement
Shares to other Black People, which have been verified by
STADIO.
4.8. STATEMENT AS TO LISTING ON THE JSE
4.8.1. The JSE has granted STADIO a listing of all its issued
STADIO Shares on the main board of the JSE under the
abbreviated name “STADIO”, share code “SDO” and ISIN
ZAE000248662 with effect from the commencement of trade on
Tuesday, 3 October 2017. STADIO will be listed in the
“Specialised Consumer Services” sector of the main board.
4.8.2. Shareholders are advised that their STADIO Shares may only
be traded on the JSE in Dematerialised form. Accordingly,
Shareholders who receive STADIO Shares in certificated
form in terms of the Unbundling, will need to Dematerialise
their STADIO Shares into an account held at a suitable
service provider, in order to trade their STADIO Shares on
the JSE. This can be either one of the CSDPs that offers
a trading service or a JSE-registered Broker. The process
takes a few days, depending on the volumes of certificates
to be authenticated. While such STADIO Shares are
undergoing Dematerialisation, the Shareholder will be
unable to trade them.
4.9. SHARE CAPITAL
The authorised and issued share capital of STADIO,
immediately prior to the Listing Date, is set out below:
Number of R
Shares
Authorised share capital
Ordinary Shares of no par 1 000 000 000 -
value
Issued share capital
Stated capital – ordinary 447 580 089 441 963 964
Shares of no par value
Treasury Shares - -
Total 447 580 089 441 963 964
4.10. DIRECTORS
The full names, ages, business address and capacities of the
Directors of STADIO are provided below:
Full name Age Capacity Business Address
Christiaan 55 Chief executive Unit 13, San Domenico,
Rudolph van officer 10 Church Street,
der Merwe Durbanville, 7550
Samara Totaram 38 Chief financial Unit 13, San Domenico,
officer 10 Church Street,
Durbanville, 7550
Divya Singh 52 Chief academic Unit 13, San Domenico,
officer 10 Church Street,
Durbanville, 7550
Rolf Heinrich 71 Independent non- 5 Clingendael Close,
Stumpf executive Tokai, Cape Town, 7945
Director
Renganayagee 52 Independent non- Unit 13, San Domenico,
Kisten executive 10 Church Street,
Director Durbanville, 7550
Khayelihle 31 Independent non- 18 Gladiolus Road,
Sibusiso executive Avoca Hills, Durban,
Sithole Director 4051
Pieter 42 Non-executive 2nd Floor, Ou Kollege,
Nicolaas de Director 35 Church Street,
Waal Stellenbosch, 7600
Andries Mellet 33 Alternate non- 2nd Floor, Ou Kollege,
executive 35 Church Street,
Director to PN Stellenbosch, 7600
de Waal
4.11. COPIES OF THE PRE-LISTING STATEMENT
Copies of the Pre-listing Statement are available in English
and may be obtained during normal business hours from Friday,
15 September 2017 until Tuesday, 3 October 2017 (both days
inclusive), from the registered office of STADIO at Unit 13,
San Domenico, 10 Church Street, Durbanville, 7550 and from
the offices of PSG Capital Proprietary Limited, the
Transaction Advisor and Sponsor, at 1st Floor, Ou Kollege,
35 Kerk Street, Stellenbosch, 7600 and 2nd Floor, 11 Alice
Lane (Bowmans Building), Sandhurst, Sandton, 2196. A copy of
the Pre-listing Statement will also be available on STADIO’s
website (www.stadio.co.za) from Friday, 15 September 2017.
Durbanville
15 September 2017
Transaction Advisor and Sponsor: PSG Capital Proprietary Limited
Independent Sponsor: Questco Proprietary Limited
Independent Reporting Accountant and Auditor of STADIO and Embury:
PricewaterhouseCoopers Incorporated
Independent Reporting Accountant in respect of Embury 2014 and
2015 historical financial information: Grant Thornton Durban
Partnership CA(SA)
Independent Reporting Accountants in respect of AFDA and
Intraframe historical financial information: Middel & Partners
Centurion Partnership CA(SA)
Date: 15/09/2017 04:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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