Wrap Text
Announcement regarding Brimstone's participation in a private placement of Stadio Holdings Limited ("STADIO") shares
Brimstone Investment Corporation Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/010442/06
Share Code: BRT ISIN: ZAE000015277
Share Code: BRN ISIN: ZAE000015285
(“Brimstone” or “the Company”)
ANNOUNCEMENT REGARDING BRIMSTONE’S PARTICIPATION IN A PRIVATE PLACEMENT
OF STADIO HOLDINGS LIMITED (“STADIO”) SHARES
1. Introduction
Brimstone shareholders are advised that the Company has entered into an irrevocable
undertaking and underwriting agreement (“the Agreement”) with STADIO to participate,
through a wholly-owned special purpose vehicle (“Brimstone SPV”), in a private placement of
STADIO ordinary no par value shares (“STADIO Shares”) (“the B-BBEE Transaction”).
2. Details of the B-BBEE Transaction
The B-BBEE Transaction will be structured as follows:
2.1 the private placement of STADIO Shares with an aggregate value of R100 million by
STADIO with the Brimstone SPV (“the Brimstone Placement”); and
2.2 the private placement of STADIO Shares with an aggregate maximum value of
R100 million by STADIO with black people as defined in the Broad-Based Black
Economic Empowerment Act, No 53 of 2003, as amended (“Black People”) (“the
Individual Placement”), which Individual Placement will be fully underwritten by the
Brimstone SPV.
The price at which the STADIO Shares will be placed and issued in terms of the B-BBEE
Transaction will be the lower of:
- R2.96 per STADIO Share; and
- the volume weighted average price of a STADIO Share for the 30 trading day period
immediately following the date of listing of STADIO on the main board of the JSE
Limited (“JSE”) (“VWAP period”), which is expected to be on Tuesday, 3 October 2017
(“the STADIO Listing Date”), less a 20% discount (“the Discounted Trading Price”).
Should the Discounted Trading Price be lower than R2.50 per STADIO Share, the
board of directors of STADIO will have the right, in its sole discretion, to decide
whether or not to proceed with the B-BBEE Transaction.
The effective date of the B-BBEE Transaction will be the 5th business day after the closing
date of the Individual Placement or such other date as advised by STADIO.
3. Description of Stadio
STADIO is currently a 91.7% held subsidiary of Curro Holdings Limited (“Curro”). On
28 February 2017, Curro announced its intention to unbundle its interest in STADIO and to list
STADIO on the JSE (“the STADIO Unbundling and Listing”).
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.
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.
In addition, 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.
At the STADIO Listing Date, the STADIO Group will have:
- 3 registered higher education institutions, namely Embury Institute of Higher
Education Proprietary Limited, the South African School of Motion Picture Medium
and Live Performance Proprietary Limited (AFDA) and the Southern Business School
Proprietary Limited;
- 5 faculties, namely Education, Commerce and Business, IT, Law and 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 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. Rationale for the B-BBEE Transaction
Brimstone has assessed the fundamentals of the South African higher education landscape
and believes the opportunity to invest in it to be attractive. Brimstone is confident of STADIO’s
prospects given its qualified, highly-skilled and experienced leadership team, the quality, well
established higher education brands that are already part of the STADIO stable and the strong
existing shareholder base of STADIO.
STADIO, in turn, recognises the importance of social and economic transformation in South
Africa and has chosen Brimstone as its long-term strategic partner towards achieving its
transformation objectives.
5. Subscription consideration
The total subscription consideration (“Consideration”) payable by the Brimstone SPV in terms
of the B-BBEE Transaction is as follows:
5.1 R100 million for the Brimstone Placement; and
5.2 up to a maximum of R100 million for the Individual Placement, to the extent that the
Individual Placement is not fully subscribed for by Black People.
The Consideration will be settled by the Brimstone SPV from available cash resources.
6. Conditions precedent
The Agreement is subject to the following conditions precedent:
6.1 that STADIO is listed on the JSE by no later than 13 October 2017, it being recorded
that the targeted STADIO Listing Date is 3 October 2017;
6.2 the prospectus to be issued by STADIO for purposes of the Individual Placement is
issued no later than 15 November 2017 and will provide for a closing date of the
Individual Placement of no later than 1 December 2017; and
6.3 if the Discounted Trading Price is lower than R2.50 per STADIO Share, the board of
directors of STADIO confirms in writing by no later than 3 days after the VWAP period
ends, that it wishes to proceed with the B-BBEE Transaction.
7. Value of net assets and profits attributable to the B-BBEE Transaction
It should be noted that there was no activity in STADIO other than an issue of STADIO
Shares to Curro for the year ended 31 December 2016, consequently the information below
has been based on the value of the B-BBEE Transaction.
The value of the net assets that are the subject of the B-BBEE Transaction is between R100
million and R200 million for the year ended 31 December 2016 as follows:
- R100 million for the Brimstone Placement; and
- between R0 and R100 million for the Individual Placement, with Brimstone’s portion
being dependent on the extent of the subscription by Black People in the Individual
Placement.
It should be noted that Brimstone’s investment in STADIO will be accounted for as an
investment at fair value through profit or loss on a mark-to-market basis in accordance with
International Financial Reporting Standards (“IFRS”) at the end of Brimstone’s financial
reporting period. Had IFRS required the investment to be equity accounted then the profits
attributable to the net assets that are the subject of the B-BBEE Transaction could be
derived from the pro forma financial information of STADIO for the year ended 31 December
2016 as set out in the pre-listing statement of STADIO which is available electronically at
www.stadio.co.za today, 15 September 2017.
The pro forma financial information of STADIO referred to above is based on the audited
historical financial information of STADIO for the year ended 31 December 2016, which were
prepared in accordance with IFRS.
8. Categorisation of the B-BBEE Transaction
The B-BBEE Transaction is categorised as a Category 2 transaction in terms of the JSE
Listings Requirements.
15 September 2017
Cape Town
Investment Bank, Corporate Advisor and Sponsor
Nedbank Corporate and Investment Banking
Legal Advisor
Werksmans Attorneys
Date: 15/09/2017 04:46:00 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.
Sharenet Sites 
