Documents obtained by the Sunday Standard show that Botswana Stock Exchange (BSE) listed company Choppies Enterprises Limited which operates a number of supermarket stores across Botswana and other SADC member states’ shareholders have approved the company’s resolution to have a secondary listing on the Johannesburg Stock Exchange (JSE).
The documents which were passed to Sunday Standard, were also sent to shareholders of Choppies “in compliance with the Listings Requirements of the Botswana Stock Exchange (BSE) for the purpose of explaining an intended specific issue of shares for cash comprising a private placement by way of an offer for subscription to selected and qualifying institutional investors and the intended admission of the Company’s securities by way of a secondary inward listing on the main board of the securities exchange operated by the JSE Limited.”
According to the documents, at the Extraordinary General Meeting held on 23 April 2015, the shareholders of Choppies were able to vote in terms of Rule 5.80 (g) of the Botswana Stock Exchange Listings Requirements, passed the resolution approving the specific issue by the Company of up to 10% of the Ordinary Shares in issue for cash, comprising a private placement by way of an offer for subscription by the Company to selected and qualifying institutional investors. Choppies anticipates that the proposed secondary listing on JSE will provide it and its shareholders access to an additional source of capital to support the Company’s continued expansion into existing and new markets; enhance the liquidity and tradability of the Ordinary Shares on the BSE and the JSE through a greater spread and diversity of investors. Other expected benefits are that the secondary listing will increase analyst research coverage to support a fair market value for the Ordinary Shares; and enhance Choppies’ public profile in the South African market.
The Choppies group, which targets the middle to lower ends of the market, has grown to become a recognizable brand in the sector. The Company states that on the basis that the offer for subscription is made, it is recorded that the subscription shares are ordinary shares, and therefore of a class of securities already in issue by Choppies; it is recorded that the subscription shares are to be issued to selected and qualifying institutional investors in terms of the offer for subscription.
The maximum number of Subscription Shares to be issued is 10% of the ordinary shares in issue, being 117 420 758 ordinary Shares; the discount, if any, at which the subscription shares are to be issued will not exceed 10% of the weighted average traded price of the ordinary shares over the 30 day period prior to the Pricing Date and therefore the Company will not be required to procure a fair and reasonable opinion by an independent professional expert. The offer for subscription is subject to the approval of the BSE and, in the context of the secondary listing, to the approval of the JSE (and is to be made in accordance with the JSE Listings Requirements).
On financial effects, the offer for subscription will result in an increase in the number of ordinary shares in issue, the company said. Shareholders that do not participate in the Offer for Subscription will continue to own the same number of Ordinary Shares which they owned prior to the Offer for Subscription, but their percentage shareholding in the Company will be diluted. “Shareholders are advised that the Offer for Subscription will impact, in relation to the Ordinary Shares, on the earning per share, net asset value per share and tangible net asset per share of the Company. The financial effects of the Offer for Subscription will depend on, inter alia, the number of Subscription Shares and the Company’s application of the net proceeds,” state the documents.
According to the documents, none of the directors has had any beneficial interest, whether direct or indirect, in any transactions which are or were unusual in their nature or conditions or material to the business of the Company, and which were effected by the Company during the current or immediately preceding Financial Year, or, during an earlier Financial Year and remain in any respect outstanding or underperformed. Choppies says the transaction will not result in the variation of the remuneration of the Directors.
The offer for subscription is assumed to raise gross proceeds of P466.2 million through the issue of 117 420 758 ordinary shares at P3.97 per share (being the closing price as at the last practicable date). Choppies enterprises listed on Botswana Stock Exchange in January 2012, with an Initial Public Offering of 1.2 billion shares being listed at an offer price of P1.15 per share. The IPO was said to be the largest on the BSE history, raising P350 million.