DISTELL GROUP HOLDINGS LIMITED - Abridged prospectus

Release Date: 22/05/2018 11:00
Code(s): DGH
 
Wrap Text
Abridged prospectus

DISTELL GROUP HOLDINGS LIMITED
previously BUSINESS VENTURE INVESTMENTS NO 1997 LIMITED
(Incorporated in South Africa)
(Registration number 2016/394974/06)
JSE share code: DGH ISIN: ZAE000248811
(“DGHL” or “the Company”)

ABRIDGED PROSPECTUS

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION OR
REQUIRE DGHL TO TAKE ANY FURTHER ACTION

The information in this abridged prospectus (“Abridged Prospectus”) has been extracted, in summarised form, from the full
prospectus issued by DGHL on Wednesday, 20 September 2017 (“Prospectus”).

This Abridged Prospectus is not complete and does not contain all of the information that investors should consider. Investors
should read the Prospectus in its entirety, including the “risk factors” section in the Prospectus, which describes certain risk
factors that should be considered before making an investment decision.

The full Prospectus is available on the Distell and Capevin websites respectively, at www.distell.co.za/investor-centre and
www.capevin.com.

This Abridged Prospectus is not an invitation to the general public to subscribe for securities in DGHL, but is issued
in compliance with the Companies Act, the Regulations and the Listings Requirements, for the purpose of providing
information to Scheme Participants regarding DGHL and to provide information to Scheme Participants with regards
to the Transaction.

Capitalised words and expressions used in this Abridged Prospectus shall, unless expressly defined herein or indicated
otherwise by the context, bear the meanings given to them in the Prospectus.

Abridged Prospectus

in relation to –
  •    the restructuring of Distell’s ownership structure through inter alia Schemes of Arrangement between Distell and the
       Distell Minorities, and Capevin and the Capevin Shareholders, in each case to which DGHL is a party, pursuant to
       which an aggregate 222 382 356 DGHL Ordinary Shares will be issued to the Distell Minorities and the Capevin
       Shareholders in exchange for all their shares in Distell and Capevin, respectively, and 124 226 613 B Shares in
       DGHL will be issued to Remgro Beverages; and
  •    the listing of the DGHL Ordinary Shares in DGHL on the JSE.

Pursuant to implementation of the Transaction, the Distell Shares and the Capevin Shares will be delisted from the Main
Board of the JSE.

The issue of DGHL Ordinary Shares in DGHL to the Distell Minorities and Capevin Shareholders in terms of the Schemes
could constitute an offer to the public in terms of section 95(1)(h) of the Companies Act. The Prospectus and this Abridged
Prospectus are issued in compliance with the Companies Act, more specifically section 99(2) of the Companies Act, the
Regulations and the Listings Requirements, for the purpose of providing information with regard to DGHL and the Transaction
(including the Schemes), and the listing of 222 382 356 DGHL Ordinary Shares, and should be read with the Distell Circular
and the Capevin Circular issued by Distell and Capevin, respectively, on Wednesday, 20 September 2017.

The Transaction does not contemplate the raising of any capital in respect of DGHL. In the circumstances, the listing of the
DGHL Ordinary Shares is not subject to a minimum amount being raised. The DGHL Ordinary Shares which are the subject
of the Schemes are not subject to any conversion or redemption provisions.

The JSE has granted the Company a Main Board listing of 222 382 356 DGHL Ordinary Shares in the “Beverages” sector of
the JSE lists with the abbreviated name “Distell”, JSE share code DGH and ISIN ZAE000248811 which, in respect of the
DGHL Ordinary Shares to be issued in terms of the Capevin Scheme, will be with effect from the commencement of business
on Wednesday, 30 May 2018, and in respect of the DGHL Ordinary Shares to be issued in terms of the Distell Scheme, will
be with effect from the commencement of business on Friday, 1 June 2018.

The DGHL Ordinary Shares will only be traded on the JSE trading system in electronic form.

The DGHL Group will, upon implementation of the Transaction, consist of DGHL, the Distell Group (being Distell and its
Subsidiaries), Capevin and RCI (as holding companies of Distell).

A copy of the Prospectus was registered by CIPC on Friday, 15 September 2017.
The Prospectus is available in English and can also be obtained from Distell and Capevin’s websites at www.distell.co.za and
www.capevin.com, respectively.

Transaction

Distell currently has a multi-tiered ownership structure, in which Remgro International and Capevin hold a material interest
via RCI. Remgro International and Capevin each hold 50% of the shares in RCI, and RCI holds 52.8% of the Distell Shares.
Remgro International also holds 19.0% of the Capevin Shares.

It is proposed that the multi-tiered shareholding structure of Distell be restructured and simplified through the Transaction.
The Transaction will not entail the raising of any amount as contemplated in Regulation 70 and, effectively, amounts to a
swapping of Distell Shares and Capevin Shares for DGHL Ordinary Shares in DGHL.

A diagrammatic representation of Distell’s ownership structure pre- and post- the Transaction is available in the full Prospectus
as well as in the PDF version available on the Distell and Capevin websites respectively, at www.distell.co.za/investor-centre
and www.capevin.com.

Issue and allotment of DGHL Ordinary Shares

Each participant in the Distell Scheme will be issued and allotted 1 DGHL Ordinary Share for every 1 Distell Share held.

Each participant in the Capevin Scheme will be issued and allotted 0.066667 (see Note 1 below) DGHL Ordinary Share for
every 1 Capevin Share held.

In respect of any fractional entitlements that may arise as a result of the above issue and allotment in terms of the Capevin
Scheme, all allocations of DGHL Ordinary Shares will be rounded down to the nearest whole number. This will result in
allocations of whole DGHL Ordinary Shares only, with a cash payment for the fractional entitlements to be paid out to Capevin
Shareholders.

In accordance with the Listings Requirements of the JSE, the cash value of the fractional entitlements will be calculated as
the volume weighted average price of DGHL Ordinary Shares traded on the JSE on Wednesday, 30 May 2018, less a discount
of 10%.

Note 1: In order for exactly 117 348 000 DGHL Ordinary Shares to be issued, as is required in terms of the Capevin Scheme,
the entitlement ratio had to be rounded to 6 decimal places, which rounding has been authorised by the JSE.

Rationale for the Transaction

The Capevin Independent Board and the Distell Independent Board believe that, although the Transaction will provide the
Remgro Group with specific rights regarding control of DGHL, the Transaction will nonetheless be beneficial to Distell, the
Distell Minorities, Capevin and the Capevin Minorities, respectively, as it will, inter alia:
i.    result in the elimination of the current multi-tiered ownership structure of Distell, leaving a single entry point to
      investing in Distell (namely DGHL);
ii.   likely unlock value for the Capevin Shareholders by eliminating all or part of the historical trading discount evident
      between the Capevin share price and the see-through value of Capevin’s interest in Distell;
iii.  likely improve the demand, liquidity and marketability of the DGHL Ordinary Shares, by comparison to the equivalent
      for Distell Shares and Capevin Shares respectively;
iv.   result in an increased free float of DGHL Ordinary Shares, which should enhance the weighting thereof in stock
      market indices both on the JSE and internationally;
v.    simplify Distell’s capital structure and thereby likely improve Distell’s investment appeal to both foreign and local
      investors;
vi.   simplify DGHL’s ability to raise capital, should it need to do so to support Distell’s long-term growth strategy; and
ii.   retain the stability and continuity which follows as a result of the Remgro Group remaining as an anchor shareholder
      of DGHL.

Overview of DGHL

History of DGHL
DGHL was incorporated in South Africa under the name Business Venture Investments No 1997 Proprietary Limited on 9
September 2016. DGHL has been a shelf company, not conducting any business, from the date of its incorporation until
implementation of the Transaction. DGHL became a public company on 30 June 2017.

The name change of “Business Venture Investments No 1997 Limited” to “Distell Group Holdings Limited” was effected on
Monday, 14 May 2018.

As at the date of issue hereof, Remgro Beverages is DGHL’s sole shareholder. Remgro Limited is the sole shareholder of
Remgro Beverages.
DGHL’s Business
Upon implementation of the Transaction, DGHL’s only assets will be 100% of the Capevin Shares and 47.2% of the Distell
Shares. Capevin’s sole asset will, in turn, be 100% of the shares in RCI; and RCI’s sole asset will be 52.8% of the Distell
Shares.

Both Capevin and RCI have, historically, served solely as vehicles for the holding of Distell Shares.

DGHL will serve primarily as an investment holding company, holding shares in Distell (directly and indirectly via Capevin and
RCI).

Distell and Distell’s Business

Distell was created through the merger of Distillers Corporation (SA) Limited and Stellenbosch Farmers Winery Group Limited
in 2001. Distell became a public company on 11 October 1988. There has been no material change in the business of Distell
during the 3 (three) years preceding the implementation of the Transaction. Distell is a listed holding company which holds
equity interests directly and indirectly in various operating companies in South Africa and abroad. The Distell Group is South
Africa and Africa’s leading producer and marketer of wines, spirits, ciders and other ready-to-drink (RTD) beverages, sold
across the world. With a diverse portfolio of brands with rich provenance and authenticity, its products are priced across the
pricing continuum to cater to a broad spectrum of consumers.

Many of Distell’s brands are household names to consumers in Africa and select international markets. These brands include
Amarula, Hunter’s, Klipdrift, Nederburg, Richelieu, Savanna and Viceroy, among others. Amarula is South Africa’s most widely
distributed international alcoholic beverage brand. Distell’s wines are sold on every continent.

Impact of the Transaction on Distell

The Distell Directors have considered the impact of the Transaction on Distell and have concluded that none of Distell’s
material contracts will be affected.

Directors

The details of the Final Directors are set out below:

Name, age, nationality                          Qualification                  Business Address
Richard Rushton#, 54, South African             BCom                           Aan-de-Wagenweg,
                                                                               Stellenbosch, 7600

Lucas Verwey#, 43, South African                BCompt (Hons),                 Aan-de-Wagenweg,
                                                CA (SA), CFA                   Stellenbosch, 7600

Piet Beyers*, 67, South African                 BCom LLB, MBA                  Aan-de-Wagenweg,
                                                                               Stellenbosch, 7600

Gugu Dingaan*, 42, South Africa                 BCom (Accounting), H           WIPHOLD, 29 Central
                                                Dip Acc, CA(SA)                Street, Houghton, 2198

Dr Prieur du Plessis*, 62, South African        BSc (QS), MBA (Cum             Plexus Holdings, OptiVest
                                                Laude), DBA (Doctor of         House, 9 Queen Street,
                                                Business                       Durbanville, 7550
                                                Administration –
                                                Finance), Chartered
                                                Director (SA)

Jannie Durand, 51, South African                BAcc Hons, MPhil               Millennia Park, 16 Stellentia
                                                (Oxon), CA(SA)                 Avenue, Stellenbosch, 7600

Pieter Louw (Alternate), 49, South African      CA(SA)                         Millennia Park, 16 Stellentia
                                                                               Avenue, Stellenbosch, 7600

Joe Madungandaba*, 59, South African            CPA(SA)                        Block 5, Ashlea Gardens
                                                                               Office Park, 180
                                                                               Grasfontein Road, Ashlea
                                                                               Gardens, Pretoria

Ethel Matenge-Sebesho, 62, South                MBA (Brunel University         Home Loan Guarantee
African                                         of London) and                 Company, 180 Beyers
                                                CAIB(SA)                       Naude Drive, Risidale,
                                                                               2195

Chris Otto, 68, South African                   BCom LLB                       1st Floor, Ou Kollege, 35
                                                                               Church Street,
                                                                               Stellenbosch, 7600

André Parker*, 66, South African                MCom                           Aan-de-Wagenweg,
                                                                               Stellenbosch, 7600

Catharina Sevillano- Barredo*, 54, South        BCom (Hons), CA(SA)            Universal House, 15
African                                                                        Tambach Road, Sunninghill
                                                                               Park

Mark Bowman*, 51, South African                 BCom (Finance), MBA            2 Blommenwerf Road,
                                                (UCT)                          Silverhurst Estate,
                                                                               Constantia, Cape Town,
                                                                               7806
* Independent
# Executive

Share Capital of DGHL

Post implementation of the Transaction:

 Authorised DGHL Ordinary Share Capital (excluding B Shares)                                    20 000 000 000
 Issued DGHL Ordinary Share Capital (excluding B Shares)                                           222 382 356
 Authorised B Share Capital                                                                        300 000 000
 Issued B Share Capital                                                                            124 226 613

Major and Controlling Shareholders based on shareholdings as at Wednesday, 16 May 2018

Following implementation of the Transaction, the Shareholders of DGHL who will hold more than 5% (five percent) of the
economic interests or voting rights, as the case may be, in DGHL will likely be:

                                             Economic interests               Voting rights
 Remgro Beverages                            31.4%                            56.0%
 PIC                                         31.7%                            20.3%
 Coronation(1)                               12.8%                            8.2%

Note 1: representing clients of Coronation

King IV principles

The DGHL Directors have adopted the principles of the King Code, including particularly King IV. Distell’s website
www.distell.co.za/investor-centre contains an explanation of the 16 principles applicable in respect of King IV.
Foreign Shareholders

The distribution of DGHL Ordinary Shares to Foreign Distell Shareholders and Foreign Capevin Shareholders (“Foreign
Shareholders”), in terms of the Schemes, may be affected by the laws of such Foreign Shareholders’ relevant jurisdiction.
Those Foreign Shareholders should consult their professional advisers as to whether they require any governmental or other
consents or need to observe any other formalities to enable them to take up their entitlements.

It is the responsibility of any Foreign Shareholder (including, without limitation, nominees, agents and trustees for such
persons) wishing to take up their entitlement to DGHL Ordinary Shares to satisfy themselves as to full observance of the
applicable laws of any relevant territory, including obtaining any requisite governmental or other consents, observing any
other requisite formalities and paying any issue, transfer or other taxes due in such territories. Foreign Shareholders are
obliged to observe the applicable legal requirements of their relevant jurisdictions.

An Excluded Foreign Distell Shareholder or an Excluded Foreign Capevin Shareholder (collectively “Excluded Foreign
Shareholders”) includes any Foreign Shareholder who is unable to receive any of the DGHL Ordinary Shares to be issued
and allotted to them because of the laws of the jurisdiction of that shareholder, or any Foreign Shareholder that Distell or
Capevin is not permitted to issue and allot any of the DGHL Ordinary Shares to because of the laws of the jurisdiction of that
Foreign Distell Shareholder or Foreign Capevin Shareholder. The DGHL Ordinary Shares to which Excluded Foreign
Shareholders would be entitled in terms of the Schemes may be aggregated and disposed of on the JSE by the Transfer
Secretaries on behalf of and for the benefit of Excluded Foreign Shareholders as soon as is reasonably practical after the
implementation of the Schemes. It is the responsibility of Excluded Foreign Shareholders to notify the Transfer Secretaries
by no later than Thursday, 31 May 2018, in respect of the Capevin Scheme, and Monday, 4 June 2018, in respect of the
Distell Scheme, that they are Excluded Foreign Shareholders.

Excluded Foreign Shareholders will, in respect of their entitlement to the DGHL Ordinary Shares, receive the average
consideration per DGHL Ordinary Share (net of transaction and currency conversion costs) received by the Transfer
Secretaries pursuant to the sale process as set out in the preceding paragraph. The average consideration per DGHL Ordinary
Share due to each Excluded Foreign Shareholder will only be paid once all such DGHL Ordinary Shares have been disposed
of.

United States shareholders wishing to take up their entitlement to DGHL Ordinary Shares

Distell Shareholders and Capevin Shareholders in the United States of America (“US”) or US persons as defined in Regulation
S under the US Securities Act of 1933 wishing to receive DGHL Ordinary Shares must be qualified institutional buyers (QIBs)
as defined in Rule 144A under the Securities Act and also qualified purchasers (QPs) within the meaning of Section
2(a)(51)(A) of the US Investment Company Act of 1940 and must complete and return the appropriate Investor Letter by no
later than Thursday, 31 May, in respect of the Capevin Scheme, or Monday, 4 June, in respect of the Distell Scheme, in order
to confirm the aforementioned. The Investor Letters are available on the Distell and Capevin websites, respectively, at
www.distell.co.za/investor-centre and www.capevin.com.

Salient dates and times
                                                                                                                    2018

 Implementation of the RCI Exchange and B Share Issuance                                                  Monday, 21 May

 Last day to trade (in respect of Capevin) in order for Capevin Shareholders to be                       Tuesday, 29 May
 recorded on Capevin's securities register on the Capevin Record Date

 Capevin Shares expected to be suspended on the JSE trading system                                     Wednesday, 30 May

 117 348 000 DGHL Ordinary Shares to be issued to Capevin Shareholders listed on                       Wednesday, 30 May
 the JSE under the JSE Code: DGH and ISIN: ZAE000248811

 Capevin Shareholders can trade their entitlement to DGHL Ordinary Shares                              Wednesday, 30 May

 Announcement released on SENS in respect of the cash payment applicable to
 fractional entitlements based on the volume weighted average price of DGHL                             Thursday, 31 May
 Ordinary Shares traded on the JSE on Wednesday, 30 May 2018, discounted by
 10%

 Last day to trade (in respect of Distell) in order for Distell Shareholders to be                      Thursday, 31 May
 recorded on Distell's securities register on the Distell Record Date

 Distell Shares expected to be suspended on the JSE trading system                                        Friday, 1 June
                                                                                                          
 105 034 356 DGHL Ordinary Shares to be issued to Distell Shareholders listed on                          Friday, 1 June
 the JSE under the JSE Code: DGH and ISIN: ZAE000248811
                                                                                                          
 Distell Shareholders can trade their entitlement to DGHL Ordinary Shares                                 Friday, 1 June

 Expected Capevin Record Date on which Capevin Shareholders must be recorded                              Friday, 1 June
 in the Capevin securities register to participate in the Capevin Scheme

 Implementation of the Capevin Scheme                                                                     Monday, 4 June

 Dematerialised Capevin Shareholders' CSDP or Broker accounts updated to reflect                          Monday, 4 June
 their DGHL Ordinary Shares
 
 Expected termination of the listing of Capevin Shares at commencement of trade on                       Tuesday, 5 June
 the JSE

 Expected Distell Record Date on which Distell Shareholders must be recorded in                          Tuesday, 5 June
 Distell's securities register to participate in the Distell Scheme
 
 Implementation of the Distell Scheme                                                                  Wednesday, 6 June

 Dematerialised Distell Shareholders’ CSDP or Broker accounts updated to reflect                       Wednesday, 6 June                       
 their DGHL Ordinary Shares 

 Expected termination of the listing of Distell Shares at commencement of trade on                      Thursday, 7 June
 the JSE

Notes:
    1.   All times shown above are South African local times.
    2.   Capevin Shares may not be dematerialised or rematerialised after Tuesday, 29 May 2018 and Distell Shares may not be dematerialised or
         rematerialised after Thursday, 31 May 2018.
    3.   Please have regard to the Distell Circular and the Capevin Circular for further detail regarding the surrender of your Distell Shares and/or Capevin
         Shares, as may be appropriate.

By order of the board

Stellenbosch
Monday, 22 May 2018

Financial Adviser, Merchant Bank, and Transaction Sponsor to Distell and DGHL
Transaction Originator and Coordinator
Rand Merchant Bank, a division of FirstRand Bank Limited

Legal Adviser to DGHL
Edward Nathan Sonnenbergs Inc.

Legal Adviser to Distell
Cliffe Dekker Hofmeyr Inc.

Independent expert to the Distell Independent Board
Ernst & Young

Financial Adviser and Transaction Sponsor to Capevin
PSG Capital Proprietary Limited

Legal Adviser to Capevin
Cliffe Dekker Hofmeyr Inc.

Independent expert to the Capevin Independent Board
BDO Corporate Finance Proprietary Limited

Date: 22/05/2018 11:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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