Wrap Text
Abridged Pre-Listing Statement
SANDOWN CAPITAL LIMITED
(Incorporated in South Africa)
(Registration number 2000/013674/06)
JSE share code: SDC
ISIN: ZAE000249645
(“Sandown Capital” or “the company”)
ABRIDGED PRE-LISTING STATEMENT
This abridged pre-listing statement is not an invitation to the public to subscribe for shares. It is issued in compliance
with the JSE Listings Requirements for the purpose of giving information to shareholders of Peregrine Holdings
Limited (“Peregrine”) regarding Sandown Capital and the listing of 226 065 696 (two hundred and twenty-six
million, sixty-five thousand, six hundred and ninety-six) ordinary shares of no par value in the “Equity Investments”
sector on the Main Board of the JSE.
This announcement contains the salient information in respect of Sandown Capital which is more fully described in
the pre-listing statement (“pre-listing statement”) issued to Peregrine shareholders on Tuesday, 14 November 2017.
For a full appreciation and understanding of Sandown Capital the pre-listing statement should be read in its entirety.
Terms defined in the pre-listing statement bear the same meaning in this abridged pre-listing statement.
1. Introduction
Sandown Capital, a wholly-owned subsidiary of Peregrine prior to the unbundling, was incorporated in South
Africa on 28 June 2000 as PGR 29 Investments Proprietary Limited and was converted to a public company on
11 September 2017.
The JSE has granted Sandown Capital a listing of all of its issued ordinary shares in the “Equity Investments”
sector on the Main Board of the JSE, with effect from the commencement of trade on Wednesday,
29 November 2017, under the abbreviated name: “SandownCp”, JSE share code: “SDC” and ISIN:
ZAE000249645. Sandown Capital will list as an investment entity in terms of section 15 of the Listings
Requirements.
2. Overview of Sandown Capital
Sandown Capital is an investment holding company that aims to create long-term value for shareholders
through targeting selected investment opportunities which meet its investment strategy.
The members of the Sandown Capital board of directors are experienced investors who have successfully
concluded and realised investments across different industries and sectors, both within South Africa and
internationally. The board includes Sean Melnick, the founder and non-executive chairman of Peregrine and a
respected businessman and deal maker. In sourcing, managing and realising investment opportunities, the
company will utilise the investment skills and established networks of the board, complemented by a highly-
experienced investment management team.
Sandown Management Limited (the “investment manager”) has been appointed by Sandown Capital to
manage the investment of the company’s assets and to provide ongoing advice and assistance that will enable
the company to achieve its investment objectives.
3. Investment strategy
Sandown Capital will seek to create long term value for its shareholders by sourcing and holding investment
opportunities which the board feels are capable, over time, of producing compound annual growth in excess of
its minimum targeted return of 15% per annum.
Sandown Capital will seek to capitalise on its status as a permanent capital vehicle by patiently seeking out a
small number of investment opportunities that are capable of producing extraordinary compound returns over
time without being deterred by potential volatility or variability of returns on those investments in the shorter
term. Whilst, as a listed entity, the effects of this volatility may impact the company’s income statement from
time to time, the litmus test for each investment will remain its ability to provide a sustainable above-hurdle
level of compound returns in order to meet the board’s strategic imperative of achieving long-term growth in
net asset value (“NAV”) per share.
The current portfolio composition is effectively an inherited one, being assets held by Sandown Capital and the
surplus assets unbundled from the Peregrine group. Whilst the board are comfortable that the current portfolio
of hedge funds, direct property and listed property units as well as a funding stake into a South African
corporate through a black economic empowerment vehicle, is capable of generating acceptable long-term
growth in NAV per share, it is anticipated that the current portfolio will, over the next few years and in a stable,
measured manner as divestment opportunities arise, be realigned with the intention being to seek out fresh
opportunities across a wider investment landscape, encompassing listed as well as unlisted opportunities.
The geographical split of Sandown Capital’s investment portfolio, on a net asset value basis, is currently 30%
South Africa and 70% invested internationally. It is envisaged that the majority of new opportunities will
continue to be internationally focussed.
Shareholders should be aware that strategically there is a preference for investing in a few, high conviction
opportunities rather than building a more diversified portfolio. In principle, Sandown Capital would prefer to be
a meaningful cornerstone investor, actively engaging with management and adding strategic value rather than
be a holder of passive investment stakes. The deployment of permanent capital is seen as a clear advantage in
the pursuit of this strategy.
The company intends utilising leverage, where appropriate to augment its long-term returns. It also intends
retaining and reinvesting all net income from its investments in pursuit of this aim. To the extent that attractive
investment opportunities arise that are beyond current balance sheet capabilities, the company would seek to
raise further capital from shareholders.
4. Benefits of investment strategy
The implementation of the above investment strategy will allow Sandown Capital shareholders to access a
portfolio of high-quality, sector and geographically diversified investments designed to produce superior returns
over the long term. The mix of listed and unlisted investments, together with the ability to utilise debt and
equity capital where appropriate, and a focus on NAV per share growth, is designed to build shareholders value.
5. Directors
Director name, age and Qualification
nationality Role Business address
Lawrie Zev Brozin (61) Independent non- B.Comm, B.Acc, 6A Sandown Valley Crescent,
South African executive CA(SA) Sandown, Sandton, 2196
chairman
Sean Alan Melnick (48) Chief Executive B.Com (Hons), CFA 6A Sandown Valley Crescent,
British/South African Officer Sandown, Sandton, 2196
Sean Kevin Jelley (52) Chief Financial B.Comm, G.Dip.Acc 6A Sandown Valley Crescent,
British/South African Officer CA(SA) Sandown, Sandton, 2196
Duncan James Randall (43) Independent non- B.Arts (African 6A Sandown Valley Crescent,
South African executive director (Politics) Oxford. Sandown, Sandton, 2196
Andrew James Independent non- Politics), DPhil 6A Sandown Valley Crescent,
Hannington (61) executive director B.Comm (Hons), CTA, Sandown, Sandton, 2196
South African CA(SA)
Mandy Yachad (56) Non-executive B.Comm, LLB 6A Sandown Valley Crescent,
South African director Sandown, Sandton, 2196
6. Investment manager
Sandown Capital has entered into an investment management agreement with the investment manager, in terms
of which the investment manager has been appointed, on an exclusive basis, to identify and recommend
investment opportunities that meet the criteria set out in the company’s investment strategy. Where the
company elects to pursue investment opportunities, the investment manager will do all things necessary to
execute such investments, including managing the due diligence process. The investment manager will provide
ongoing advice for the period that the investment is held by the company, reporting on the status and value of
each investment at regular intervals, as agreed with the board. When the company decides to dispose of an
investment, the investment manager will manage the disposal process on behalf of the company.
In return for providing these services, the investment manager will charge the company an annual investment
fee, payable, quarterly in advance, of the greater of R16 000 000 or 0.95% of the company’s annual average net
asset value. In addition, the company will, subject to the compound average growth rate of the net asset value
per share of the company being equal to or exceeding a hurdle rate of 15% since commencement of the
investment management agreement, pay the investment manager a performance fee equal to 10% of the growth
in net asset value achieved since commencement, less any performance fees paid in prior periods. The first
measurement period for the performance fee runs from the commencement date to 31 March 2019, and
thereafter is calculated annually. The investment manager may elect to apply the full amount of any
performance fee received to acquire ordinary shares in the company at a price per share equal to the audited
published net asset value per share of the company as determined at the end of the period to which the
performance fee relates.
7. Share capital and NAV
Immediately prior to and after listing:
- the authorised share capital of Sandown Capital will comprise of 500 000 000 ordinary shares of no par
value;
- the issued share capital of Sandown Capital will comprise of 226 065 696 ordinary shares of no par
value; and
- there will be no treasury shares in issue.
As at 31 October 2017, Sandown Capital had an NAV of R1 265 985 000 and a NAV per share of R5.60.
These figures are estimates as per the JSE Listings Requirements paragraph 8.40 and Sandown Capital would
accordingly like to advise shareholders that this information has not been reviewed or reported on by Sandown
Capital’s auditors and is the responsibility of the directors of Sandown Capital.
8. Salient dates and times
2017
Peregrine unbundling circular issued to Peregrine shareholders, together with this
pre-listing statement Tuesday, 14 November
Abridged pre-listing statement released on SENS Tuesday, 14 November
Announcement relating to the issue of the Peregrine circular and finalisation
information in respect of the unbundling released on SENS Tuesday, 14 November
Abridged pre-listing statement published in the press Wednesday, 15 November
Last day to trade in Peregrine shares in order to participate in the unbundling Tuesday, 28 November
Trading in Peregrine shares ‘ex’ the entitlement to participate in the unbundling
commences Wednesday, 29 November
Listing date - Sandown Capital shares listed and commence trading on the JSE (at
09:00) Wednesday, 29 November
The ratio apportionment of expenditure and market value in respect of the
unbundling released on SENS (by 11:00) Thursday, 30 November
Unbundling record date (at close of trade) Friday, 1 December
Sandown Capital shares credited to the accounts of Peregrine shareholders at their
CSDP or broker (at 09:00) Monday, 4 December
Notes:
1. The above dates and times are South African dates and times.
2. Peregrine shares may not be dematerialised or rematerialised between Wednesday, 29 November 2017 and Friday,
1 December 2017, both days inclusive.
9. Pre-listing statement
The pre-listing statement is available in English only. Copies of this pre-listing statement are available on the
company’s website at www.sandowncapital.com and may also be obtained from the offices of the company and
the corporate advisor (6A Sandown Valley Crescent, Sandown, Sandton, 2196) during normal office hours from
Tuesday, 14 November 2017 to Friday, 1 December 2017.
14 November 2017
Corporate advisor and sponsor Legal advisors
Java Capital Werksmans
Independent reporting accountants and auditors and Independent reporting accountants
independent transaction sponsor KPMG
Deloitte & Touche Sponsor
Date: 14/11/2017 04:36:00 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.