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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in doubt as to the action you should take in relation to this document, please consult your
stockbroker, banker, legal adviser or other professional adviser immediately. This document is issued in
compliance with the Listings Requirements of the Botswana Stock Exchange to the shareholders of
Choppies Enterprises Limited (“Choppies” or the “Company”), for the purpose of explaining (a) 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 (b) 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.
ACTION REQUIRED:
1
If you have disposed of all of your Choppies Ordinary Shares, this circular should be sent to the
agent, stockbroker or other adviser through whom you have disposed of such Choppies Ordinary
Shares, for onward delivery to the purchaser of those Choppies Ordinary Shares.
2
Attached to this Circular is the Notice (the “Notice”) convening the Extraordinary General Meeting
of Choppies shareholders (“EGM”), to be held at 14h30 on Thursday, 23 April 2015 at Lansmore,
Masa Square, Plot 54353, CBD, Gaborone and the relevant form of proxy. Shareholders who are
unable to attend the EGM should complete the attached form of proxy and return it to the Company
Secretary, Corporate Services (Proprietary) Limited, Unit 5, Kgale Mews, Kgale Hill, Gaborone so
as to be received by no later than 14h30 on Tuesday, 21 April 2015. Submission of a form of proxy
will not preclude shareholders from attending and voting in person at the EGM, should they so
desire.
_____________________________________________________________________________________
CHOPPIES ENTERPRISES LIMITED
(Incorporated under the Companies Act in the Republic of Botswana)
Registration number 2004/1681
BSE Ordinary Share Code: CHOPPIES
(“Choppies” or the “Company”)
1
CIRCULAR TO SHAREHOLDERS
In respect of an intended specific issue of Ordinary Shares of the Company for cash,
comprising a private placement by way of an offer for subscription to Selected and Qualifying
Institutional Investors.
Incorporating:
an explanation and motivation;
a Notice of the Extraordinary General Meeting of the Company scheduled for 14h30 on
Thursday, 23 April 2015 at Lansmore, Masa Square, Plot 54353, CBD, Gaborone; and
a Form of Proxy.
2
CORPORATE INFORMATION AND ADVISERS
Board of Directors:
Company Secretary and
Registered Office:
Executive Directors:
Farouk Essop Ismail
Corporate Services (Pty) Limited
Ramachandran Ottapathu
Registration Number 85/822
Manikandan Madakkavil
Unit 5, Kgale Mews, Kgale Hill
Gaborone
Non-Executive Directors:
His Excellency Festus Gontebanye Mogae (Chairman),
Former President of the Republic of Botswana
Transfer Secretary:
Dorcas Ana Kgosietsile
Grant Thornton Business Services (Pty) Limited
Robert Neil Matthews
Registration Number 1923
Sydney Alan Muller
Plot 50370, Acumen Park
Peter Baird
Fairgrounds Office Park
P O Box 1157, Gaborone
Botswana
Legal Adviser:
Sponsoring Broker:
Collins Newman & Co.
Motswedi Securities (Pty) Limited
Dinatla Court, Plot 4863
Plot 113, Unit 30, Kgale Mews
P O Box 882, Gaborone
Private Bag 000223, Gaborone
Botswana
Botswana
3
DEFINITIONS AND INTERPRETATION
In this Circular and its annexures, unless otherwise stated or the context otherwise indicates, the following
terms have the meanings provided next to them; words and expressions in the singular shall include the
plural and vice versa; words incorporating natural persons shall include corporations and associations of
persons, whether incorporated or unincorporated and vice versa; a reference to a clause is to a clause of
this Circular, and any reference to one gender shall include the others:
“Botswana”
the Republic of Botswana;
“BSE”
the Botswana Stock Exchange;
“Circular”
this circular, including all annexures hereto, dated 31 March 2015;
“Company”
Choppies Enterprises Limited (registration number 2004/1681), a public
company duly registered and incorporated in accordance with the laws of
Botswana;
“Companies Act”
the Companies Act [CAP 42:01], as amended from time to time;
“Constitution”
the amended constitution of Choppies, adopted by special resolution on 5
December 2014;
“Directors”
the directors of the Company, constituting its board of directors as at the
Last Practicable Date, being the persons whose names are set forth in the
section of this Circular headed “Corporate Information and Advisers”;
“Effective Date”
the date upon which the Transaction comes into force, being the issue of the
Subscription Shares on the date of the Secondary Listing;
“EGM”
the extraordinary general meeting of Shareholders, to be held at 14h30 on
Thursday, 23 April 2015 at Lansmore, Masa Square, Plot 54353, CBD,
Gaborone;
“EGM Results
Announcement”
the announcement of the results of the EGM (assuming the grant of the
Shareholder Approval), a draft of which is incorporated into this Circular as
Annexure 3;
“Financial Statements”
the Company’s audited financial results in respect of a given Financial Year;
“Financial Year”
the financial year of the Company ended and as at 30 June each year;
4
“Form of Proxy”
the Shareholder form of proxy in respect of the EGM, incorporated into this
Circular as Annexure 2;
“Interim Financial
Statements”
the Company’s unaudited financial results in respect of a given period of 6
months after each Financial Year, ended and as at 31 December each year;
“JSE”
the JSE Limited (registration number 2005/022939/06), a public company
duly incorporated and registered with limited liability under the company laws
of South Africa, licensed to operate an exchange under the South African
Financial Markets Act (Act No. 9 of 1933) as amended from time to time;
“JSE Listings
Requirements”
the listings requirements of the JSE as amended from time to time;
“Last Practicable Date”
the last practicable date prior to finalisation of this Circular, being Monday,
30 March 2015;
“Listings Requirements”
the listings requirements of the BSE, as amended from time to time;
“Notice”
the notice convening the EGM, incorporated into this Circular as Annexure 1;
“Offer for Subscription”
an offer for subscription by Choppies to Selected and Qualifying Institutional
Investors in South Africa, Botswana and other jurisdictions of Subscription
Shares, to whom the offer will be specifically addressed and only be capable
of acceptance by, subject to certain conditions;
“Ordinary Shares”
ordinary shares of no par value in the Stated Capital of the Company, being
the only class of shares of the Company in issue as at the Last Practicable
Date;
“Pricing Date”
the date on which the price of the Subscription Shares is determined by the
Directors of the Company;
“Related Party
Requirements”
the related party requirements in section 10 of the Listings Requirements;
“Rule 5.80 Requirements”
has the meaning ascribed to it in clause 4.1;
“Secondary Listing”
the admission of the Ordinary Shares to the JSE’s main board for listed
securities in accordance with the JSE Listings Requirements;
5
“Selected and Qualifying
Institutional Investors”
in relation to Botswana, investors qualifying in terms of section 297(a) of the
Companies Act; in relation to South Africa, investors qualifying in terms of
section 96(1)(a) of the South African Companies Act; and, in relation to other
jurisdictions, investors qualifying in accordance with the applicable rules of
the relevant jurisdiction;
“South African Companies
Act”
the South African Companies Act, (Act No. 71 of 2008), as amended from
time to time;
“Shareholder(s)”
holders of the Ordinary Shares in the Stated Capital of the Company from
time to time;
“Shareholder Approval”
has the meaning ascribed to it in clause 10.1;
“South Africa”
the Republic of South Africa;
"Stated Capital"
has the meaning ascribed to it in Section 5 of the Companies Act and, in
relation to the Company, comprises of 1 174 207 583 Ordinary Shares as at
the Last Practicable Date;
“Subscription Shares”
up to a maximum of 10% of the Stated Capital of the Company, being
117 420 758 new Ordinary Shares that may be offered for subscription by
Choppies in terms of the Offer for Subscription; and
“Transaction”
has the meaning ascribed to it in clause 1.2.
6
CIRCULAR
1
INTRODUCTION
1.1
The Company, which is an established mass grocery retailer listed on the BSE, and the
1
leading supermarket chain in Botswana targeting lower to middle-income consumers, intends
to effect the Secondary Listing. The Secondary Listing is subject to the approval of the JSE
and is to be made in accordance with the JSE Listings Requirements.
1.2
Pursuant to the Secondary Listing, the Company may, inter alia, effect an issue of Ordinary
Shares for cash in terms of a private placement to Selected and Qualifying Institutional
Investors in South Africa, Botswana and other jurisdictions (the “Transaction”). The
Transaction requires the Shareholder Approval, which is the subject matter of this Circular.
1.3
The Secondary Listing does not require the approval of the Shareholders and is recorded in
this Circular for information and disclosure purposes only.
2
RATIONALE FOR THE SECONDARY LISTING
Choppies anticipates that the Secondary Listing will have the following benefits for Choppies and its
stakeholders:
provide 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;
increase analyst research coverage to support a fair market value for the Ordinary Shares; and
enhance Choppies’ public profile in the South African market.
1
Briggs & Associates, 2014
7
3
THE RATIONALE FOR THE TRANSACTION
In the event that the Offer for Subscription is made, the rationale for the proposed specific issue of
new Ordinary Shares for cash would be to enable the Company to raise capital to accelerate its
expansion into existing and new markets, which will include:
organic growth through the development of new stores;
acquisitive growth; and
investment in new distribution centres and additional capacity.
4
SALIENT TERMS AND FINANCIAL EFFECTS OF THE TRANSACTION
Salient Terms
4.1.
On the basis that the Offer for Subscription is made, in accordance with the provisions of
Rule 5.80 of the Listings Requirements (the “Rule 5.80 Requirements”):
4.1.1.
it is recorded that the Subscription Shares are Ordinary Shares, and therefore of
a class of securities already in issue by Choppies;
4.1.2.
it is recorded that the Subscription Shares are to be issued to Selected and
Qualifying Institutional Investors in terms of the Offer for Subscription;
4.1.3.
the maximum number of Subscription Shares to be issued is 10% of the Ordinary
Shares in issue, being 117 420 758 Ordinary Shares;
4.1.4.
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; and
4.1.5.
the issue of the Subscription Shares is subject to the grant of the Shareholder
Approval referred to in clause 10.1 of this Circular.
4.2.
The Transaction will become effective on the Effective Date.
8
4.3.
The Offer for Subscription is subject to the approval of the BSE and, in the context of the
Secondary Listing, to, inter alia, the approval of the JSE (and is to be made in accordance
with the JSE Listings Requirements).
4.4.
The grant of the Shareholder Approval will ensure compliance by the Company with its
obligations under the Rule 5.80 Requirements, the provisions of clause 6.1 of the
Constitution and section 52 of the Companies Act.
Financial Effects
4.5.
The Offer for Subscription will result in an increase in the number of Ordinary Shares in
issue.
4.6.
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.
4.7.
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.
4.8.
The unaudited pro forma financial effects of the Offer for Subscription and the assumptions
in connection therewith are set out in Annexure 4 to this Circular.
9
5.
MAJOR SHAREHOLDERS
The following Shareholders hold the highest percentages of the Ordinary Shares of the Company,
as at the Last Practicable Date.
Ordinary
Shareholder
Ramachandran
Number of Ordinary
Number of Ordinary
Shares held directly
Shares held indirectly
Percentage of Ordinary
prior to the Offer for
prior to the Offer for
Shares held prior to the
Subscription
Subscription
Offer for Subscription
326 956 136
210 500
27.9% of the Ordinary
Ottapathu
Farouk Ismail
Shares
263 068 920
448 880
22.4% of the Ordinary
Shares
Standard Chartered
150 000 000
12.7% of the Ordinary
Private
Shares
Equity(Mauritius) III
Limited
The Shareholders above intend to vote in favour of the Transaction.
10
6.
DIRECTORS’ INTERESTS IN THE COMPANY AND DIRECTORS’ DETAILS
6.1. The Directors held the following interests in the Company's Ordinary Shares as at the
Last Practicable Date:
Number of
Percentage of
Number of Ordinary Shares
Ordinary Shares
Ordinary Shares
held directly prior to the
held indirectly
held prior to the
Offer for Subscription
prior to the Offer
Offer for
for Subscription
Subscription
326 956 136
210 500
27.9%
Farouk Ismail
263 068 920
448 880
22.4%
Manikandan
25 000
Name
Executive Directors
Ramachandran
Ottapathu
0.0%
Madakkavil
Totals
590 050 056 Ordinary
659 380 Ordinary
50.3% of the
Shares
Shares
Ordinary Shares
Independent Non-executive
Directors
His Excellency Festus
29 000 000
288 800
2.5%
Dorcas Kgosietsile
565 000
15 064
0.05%
Robert Neil Matthews
21 816
Gontebanye Mogae, the
Former President of the
Republic of Botswana
0.0%
Sydney Alan Muller
Totals
400 000
0.03%
29 586 816
303 864
2.58% of the
Ordinary Shares
Ordinary
Ordinary Shares
Shares
11
6.2. 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.
6.3. The Directors who hold Ordinary Shares in Choppies intend to vote in favour of the
Transaction.
6.4. The relevant personal details as to the Directors are set forth in Annexure 5 to this Circular.
7. MAJOR SHAREHOLDERS’ AND DIRECTORS’ INTERESTS IN THE TRANSACTION
7.1. None of (i) the Major Shareholders listed in clause 5 or (ii) the Directors listed in clause 6
has any interest directly or indirectly in the Offer for Subscription.
7.2. The Transaction will not result in the variation of the remuneration of the Directors.
8.
THE EGM
8.1.
The implementation of the Transaction is subject to, inter alia, the Shareholder Approval
being given at the EGM.
8.2.
The EGM will be held at 14h30 on Thursday, 23 April 2015 at the Lansmore, Masa Square,
Plot 54353, CBD, Gaborone. The Notice convening the EGM is attached to this Circular.
8.3.
Shareholders who are unable to attend the EGM but wish to be represented are requested
to complete and return the attached Form of Proxy in accordance with the instructions
contained thereon. The Company Secretary must receive completed Forms of Proxy by no
later than 14h30 on Tuesday, 21 April 2015.
8.4.
The results of the voting at the EGM will be announced substantially in the form of the EGM
Results Announcement.
9.
INDEPENDENT REVIEW
For the reasons stated at clause 4.1.4, there is no requirement for an independent professional
adviser to conduct a fair and reasonable review in relation to the Offer for Subscription.
10.
REASONS FOR THE EGM
10.1.
The Rule 5.80 Requirements stipulate that a 75% majority of the votes of all Shareholders
present or represented by proxy at the EGM, excluding controlling Shareholders, their
associates, any party acting in concert and, if applicable, any Shareholder who is
12
participating in the issuance and who is not regarded as being public (all as defined in the
BSE Listings Requirements), must be cast in favour of the resolution (set forth in the
Notice) to issue the Subscription Shares (the “Shareholder Approval”).
10.2.
It is recorded that, as at the Last Practicable Date, the Company has no controlling
Shareholder, no party acting in concert (insofar as the Directors are aware) and no existing
Shareholder which is a non-public Shareholder participating in the Offer for Subscription.
11.
OPINIONS AND RECOMMENDATIONS
The Directors of Choppies are of the opinion that the terms and conditions of the Transaction are fair
and reasonable and will be to the long-term benefit of Choppies and its Shareholders. Accordingly,
the Directors recommend that Shareholders vote in favour of the Transaction and give the
Shareholder Approval necessary to approve and implement the Transaction.
12.
DIRECTORS’ RESPONSIBILITY
12.1.
The Directors, whose names are given in the section of this Circular headed “Corporate
Information and Advisers”, collectively and individually accept full responsibility for the
accuracy of the information given and certify that to the best of their knowledge and belief
there are no other facts the omission of which would make any statement false or
misleading, that they have made all reasonable enquiries to ascertain such facts and (if
applicable) that this Circular contains all information required by law.
12.2.
The Directors confirm that this Circular includes all such information within their knowledge
(or which it would be reasonable for them to obtain by making enquiries) as investors and
their professional advisers would reasonably require and reasonably expect to find for the
purpose of making an informed assessment of the subject matter of this Circular and for
giving the Shareholder Approval.
13.
ADVISERS’ CONSENTS
The Sponsoring Broker, and the Legal Adviser have each consented in writing to act in the capacities
stated and to their names being stated in this Circular and had not withdrawn their consent prior to
the publication of this Circular.
14.
DOCUMENTATION AVAILABLE FOR INSPECTION AND/OR INCORPORATED BY REFERENCE
INTO THIS CIRCULAR
Copies of the documents listed below will be available for inspection during normal business hours
on business days from 09h00 on Monday 31 March 2015 until 17h00 on Thursday 23 April 2015 at
the principal offices of Company Secretary, Unit 5, Kgale Mews, Kgale Hill, Gaborone:
13
14.1.
this Circular;
14.2.
the letter of consent from the Sponsoring Broker;
14.3.
the letter of consent from the Legal Adviser;
14.4.
the Constitution of the Company;
14.5.
the Financial Statements for the Financial Years ended and as at 30 June 2012, 30 June
2013 and 30 June 2014 respectively and the unaudited Interim Financial Statements for the
6 month period ended and as at 31 December 2014, all of which are incorporated by
reference into and form part of the Circular; and
14.6.
all other materials and information required in terms of section 7.G.1 of the Listings
Requirements.
15.
EXPENSES RELATING TO THIS CIRCULAR AND THE EGM
The expenses incurred or to be incurred by Choppies in pursuance of obtaining the Shareholder
Approval are estimated in BWP, payable as follows:
Estimated expense (excl. VAT)
Amount (BWP)
(excluding VAT)
BSE documentation fee
10 000.00
Publication, printing, advertising and related expenses
50 000.00
Sponsoring brokers fees
70 000.00
Legal fees
250 000.00
Other expenses and costs
50 000.00
Total
16.
430 000.00
NO MATERIAL LITIGATION OR ARBITRATION
As at the Last Practicable Date, the Directors are not aware of any material litigation or arbitration
proceedings by or against the Company, whether pending, threatened or commenced, which may
have a negative impact on the Company’s trading or financial condition.
14
17.
NO RELATED PARTY TRANSACTION
As neither the major Shareholders listed in clause 5 of this Circular nor the Directors listed in clause
6 of this Circular are participating in the Offer for Subscription, the Transaction is not a related party
transaction (as defined in the Related Party Requirements) and the Related Party Requirements are
not applicable to it.
18.
NO MATERIAL ADVERSE CHANGE
The Directors advise that there has been no material adverse change to the Company’s trading or
financial position since the date of publication of its last audited financial results.
19.
NO TAKEOVER
As at the Last Practicable Date, to the best of the knowledge and belief of the Directors, the Company
is not the subject of an unannounced or expected take-over bid.
20.
MARKET VALUE OF ORDINARY SHARES
A table of the aggregate volumes traded and the highest and lowest prices traded in respect of the
Ordinary Shares for (i) each month over the 12 month period prior to the Last Practicable Date, (ii)
each quarter over the previous 2 year period prior to the Last Practicable Date and (iii) each day over
the 30 day period prior to the Last Practicable Date, is set forth in Annexure 6 to this Circular.
SIGNED BY, OR ON BEHALF OF, EACH OF THE DIRECTORS OF CHOPPIES, IN TERMS OF A
RESOLUTION TO THAT EFFECT PASSED BY SUCH DIRECTORS.
31 March 2015
CHOPPIES ENTERPRISES LIMITED
Unit 5, Kgale Mews
Kgale Hill
Gaborone
15
ANNEXURE 1
CHOPPIES ENTERPRISES LIMITED
(Incorporated under the Companies Act in the Republic of Botswana)
Registration number 2004/1681
BSE Ordinary Share Code: CHOPPIES
(“Choppies” or the “Company”)
NOTICE OF EXTRAORDINARY GENERAL MEETING
Notice is hereby given of an Extraordinary General Meeting of Shareholders of the Company to be
held at 14h30 on Thursday, 23 April 2015 at Lansmore, Masa Square, Plot 54353, CBD, Gaborone
for the following business:
Agenda
1.
To read the notice convening the meeting.
2.
To consider and if thought fit, approve with or without amendment the following resolutions:
2.1.
as a special resolution, that the proposed specific issue of up to a maximum of 10% of the
Stated Capital of the Company, being 117 420 758 new Ordinary Shares, on the terms set out
in the Circular accompanying this notice, be and is hereby approved; and
2.2.
as an ordinary resolution, that the directors of the Company be and are hereby authorised to
take such steps and sign all such other documents as are necessary to give effect to the
aforesaid resolution passed at this meeting.
A Shareholder entitled to attend and vote may appoint a proxy to attend and vote for him/her on his/her
behalf, and such proxy need not also be a Shareholder of the Company. The instrument appointing such a
proxy must be deposited with the Company Secretary at the registered office of the Company, Unit 5, Kgale
Mews, Kgale Hill, Gaborone not less than 48 hours before the meeting.
By Order of the Board
Choppies Enterprises Limited
Unit 5, Kgale Mews, Kgale Hill, Gaborone, Botswana.
16
ANNEXURE 2
CHOPPIES ENTERPRISES LIMITED
(Incorporated under the Companies Act in the Republic of Botswana)
Registration number 2004/1681
BSE Ordinary Share Code: CHOPPIES
(“Choppies” or the “Company”)
FORM OF PROXY
For completion by holders of Ordinary Shares of the Company.
Please read the notes attached to this form before completing it.
For use at the Extraordinary General Meeting of Shareholdings of the Company to be held at 14h30 on
Thursday 23 April 2015 at Lansmore, Masa Square, Plot 54353, CBD, Gaborone (the “EGM”).
I/We,
(Name in block letters)
Of
(Address)
Hereby appoint
1.
_____________________________ or failing him/her,
2.
_____________________________ or failing him/her,
17
3.
His Excellency Festus Gontebanye Mogae, Former President of the Republic of Botswana, or, failing
him, Mr Robert Neil Matthews.
as my/our proxy to act for me/us at the EGM and, in so doing, to vote for or against the resolutions
and/or abstain from voting in respect of the Ordinary Shares registered in my/our name in
accordance with the following instruction:
Number of Ordinary Shares
For
Special Resolution 1
Agenda item 2.1
Ordinary Resolution 1
Agenda item 2.2
Against
Abstain
Signed at:
Date:
Signature___________________
Assisted by (where applicable)
Each Shareholder is entitled to appoint one or more proxies (who need not be member/s of the
company) to attend, speak and vote in place of the Shareholder at the EGM.
Please read notes 1 – 7 below.
Notes:
1.
A Shareholder must insert the names of two alternative proxies of the Shareholder’s choice in
the space provided. The person whose name appears first on the form of proxy and whose
name has not been deleted shall be entitled to act as proxy to the exclusion of those whose
names follow.
2.
A Shareholder’s instruction to the proxy must be indicated in the appropriate space provided.
Failure to comply herewith will be deemed to authorise the proxy to vote at the EGM as he/she
deems fit in respect of the Shareholder’s votes exercisable thereat. A Shareholder or his/her
proxy is obliged to use all the votes exercisable by the Shareholder or by his/her proxy.
18
3.
The completion and lodging of this form will not preclude the relevant Shareholder from
attending the EGM.
4.
The Chairman of the EGM may reject or accept any form of proxy not completed and/or
received other than in accordance with these notes provided that he/she is satisfied as to the
manner in which the Shareholder concerned wishes to vote.
5.
An instrument of proxy shall be valid for the EGM as well as for any adjournment thereof,
unless the contrary is stated thereon.
6.
The authority of a person signing the form of proxy under power of attorney or on behalf of a
company must be attached to the form of proxy.
7.
Where Ordinary Shares are held jointly, all Shareholders must sign. A minor must be assisted
by his/her guardian.
This Annexure 2 is reprinted at the end of this Circular for ease of separation from this Circular and
completion by the Shareholder.
19
ANNEXURE 3
CHOPPIES ENTERPRISES LIMITED
(Incorporated under the Companies Act in the Republic of Botswana)
Registration number 2004/1681
BSE Ordinary Share Code: CHOPPIES
(“Choppies” or the “Company”)
RESULTS OF EXTRAORDINARY GENERAL MEETING
The Company is pleased to announce that at the Extraordinary General Meeting held on Thursday, 23 April
2015 (“the EGM”) the shareholders of Choppies (“the Shareholders”), 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 (as defined
in the circular sent to Shareholders which accompanied the notice of the EGM).
Sponsoring Broker
Legal Adviser
Member of the Botswana Stock Exchange
20
ANNEXURE 4
SUMMARY UNAUDITED PRO FORMA FINANCIAL EFFECTS
Unaudited Pro Forma Financial Effects
1. The unaudited pro forma financial effects set out below have been prepared to assist shareholders to
assess the impact of the Offer for Subscription on the earnings per share, net asset value per share
and tangible net asset value per share of the Company.
2. These unaudited pro forma financial effects are presented for illustrative purposes only and may not
fairly represent the Company’s financial position or the results of its operations after the Offer for
Subscription. The actual 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.
3. The assumptions on which the pro forma financial effects are based are set out in the notes below the
table.
Unaudited pro forma financial effects
Reviewed six
Adjustment due to
Unaudited Pro
%
months ended 31
the Offer for
forma after Offer
change
December 2014
Subscription
for Subscription
77.72
28.25
105.97
36.4
39.05
31.77
70.82
81.3
- Basic
8.57
(1.06)
7.50
(12.4)
- Diluted
8.57
(1.06)
7.50
(12.4)
1 174 208
117 421
1 291 629
10.0
1 174 208
117 421
1 291 629
10.0
Net asset value per share
(thebe)
Tangible net asset value per
share (thebe)
Earnings per share (thebe)
Number of shares in issue at
end of period ('000)
Weighted average number
of shares in issue (‘000)
21
Notes:
1)
Based on the reviewed results for the six months ended 31 December 2014.
2)
The pro forma adjustments to net asset value per share and tangible net asset value per share have been
calculated on the assumption that the Offer for Subscription was implemented on 31 December 2014.
3)
The pro forma adjustments to basic and diluted earnings per share have been calculated on the assumption
that the Offer for Subscription was implemented on 1 July 2014.
4)
The Offer for Subscription is assumed to raise gross proceeds of BWP 466.2 million through the issue of
117 420 758 Ordinary Shares at BWP3.97 per share (being the closing price as at the Last Practicable Date).
5)
Total expenses relating to the Shareholder Approval and the Offer for Subscription are estimated to be
BWP10 million. Estimated transaction costs of BWP0.4 million have been deducted from share capital. This
adjustment will not have a continuing effect.
6)
The balance of the estimated transaction costs of BWP9.6 million are to be incurred and expensed through
the income statement. This adjustment will not have a continuing effect.
7)
It is assumed that the net proceeds from the Offer for Subscription of BWP456.2 million will be used to repay a
portion of long-term debt BWP268.6 million. This adjustment will have a continuing effect.
8)
The repayment of long-term debt will result in an after-tax interest expense saving of BWP6.0 million for the
six month period ended 31 December 2014. Interest is calculated at a blended rate of 5.7% on the borrowings to
be retired. Tax is calculated at the Botswana normal income tax statutory rate of 22%. The adjustment is of a
continuing nature.
9)
It is assumed the remainder of the net proceeds BWP187.6 million will be retained as cash. No interest
income has been assumed. This adjustment will have a continuing effect.
22
ANNEXURE 5
RELEVANT DETAILS OF DIRECTORS OF THE COMPANY
Board structure of Choppies
The Board comprises 3 executive Directors and 5 non-executive Directors.
The members of the Board are as follows:
Name (age)
Nationality
Business address
Function/
Occupation
Date of
appointment
as Director
His Excellency
Festus
Plot 169, Gaborone
Gontebanye
Mogae, Former
Botswana
President of the
International
Director
Commerce Park,
(Chairman)
20 October 2004
Botswana
Republic of
Botswana
Plot 169, Gaborone
Farouk Essop
Ismail
Botswana
International
Commerce Park
Director
7 July 2004
Botswana
Plot 169, Gaborone
Ramachandran
Ottapathu
Botswana
International
Director
Commerce Park
(CEO)
7 July 2004
Botswana
Dorcas Ana
Kgosietsile
Plot 1046, Sefoke
Botswana
Tlokeng, Gaborone
Director
2 November 2011
Director
7 March 2012
Botswana
Plot 29, 10 Ko
Robert Neil
Matthews
Britain
Mokolodi,
Gaborone
Botswana
23
Name (age)
Nationality
Business address
Function/
Occupation
Date of
appointment
as Director
rd
3 Floor, 4
Peter Baird
USA
Sandown Valley
Crescent, Sandton ,
Director
17 December 2013
Director
15 May 2014
Johannesburg
Swift Lane
Sydney Alan
South
Steenberg Estate,
Muller
African
Tokai Road, Tokai
7945
Manikandan
Madakkavil
(Chief Financial
Plot 169, Gaborone
Indian
Officer)
International
Director
Commerce Park
(CFO)
18 March 2015
Botswana
Experience of Directors
The profiles and experience of the Directors and the company secretary are set out below:
Executive Directors
Ramachandran ("Ram") Ottapathu (50)
Ram has the qualifications BCom and CA. Ram joined Choppies in 1992 and has been
heading the operations since 2000. He has been instrumental in the significant growth of
Choppies in Botswana and its expansion into South Africa. Ram has 22 years' experience in
the retail industry, both in finance and operations, and further experience in other industries
such as manufacturing, packaging, milling and medical distribution.
He combines
entrepreneurial and commercial acumen with excellent management skills. Ram is a fellow of
the Institute of Chartered Accountants of India and associate member of the Botswana
Institute of Chartered Accountants.
Farouk Ismail (67)
Farouk is the co-founder of Choppies. He opened the first store in Lobatse in 1986 under the
name of Wayside Supermarket and has been instrumental in the Group's growth since.
24
Manikandan (or “Mani”) Madakkavil (41)
Mani joined Choppies in 2006 as finance manager and was appointed CFO in 2012. Prior to
joining Choppies, Mani spent several years working in Kerala, India. Mani was previously the
financial manager of Synthite Industries Pvt Ltd, one of the world’s largest producers of value
added spices. Mani also spent several years as an auditor at Varma and Varma Chartered
Accountants in Kerala, India. Mani has a Bachelor of Commerce Degree from the University of
Calicut, Kerala, India. Mani is a fellow of the Institute of Chartered Accountants of India and an
Associate member of the Botswana Institute of Chartered Accountants.
Non-executive Directors
His Excellency Festus Gontebanye Mogae, Former President of the Republic of Botswana
(“H.E. Mogae”) (75) - Independent non-executive Director
H.E. Mogae holds the qualifications MA (Development Economics) and BA Hons (Econ). He
was elected as the President of the Republic of Botswana in 1998, in which office he served
until his tenure ended in 2008. Rising through the ranks, H.E. Mogae held several portfolios
including Minister in Ministry of Finance and Development Planning, alternate Governor for
Botswana at the International Monetary Fund, African Development Bank and International
Bank for Reconstruction and Development.
He was also the Governor of the Bank of
Botswana, Permanent Secretary to the President, Secretary to the Cabinet and supervisor of
elections and the Vice President. Further, he has served on various parastatal boards as a
director and as a chairman. H.E. Mogae is currently the special envoy of the United Nations
for HIV/Aids and good governance in Africa, and was awarded the 2008 Mo Ibrahim prize for
his achievement in African leadership for ensuring stability and prosperity.
Dorcas Ana Kgosietsile (55) - Independent non-executive Director
Dorcas holds the qualifications MSc (Management) and BA (Acc, Stats, Econ). Dorcas is an
independent and non-executive director of First National Bank of Botswana, a non-executive
director of Botho University and a non-executive director of six wholly owned subsidiaries of
FSG Limited. She served as first resident High Commissioner of Botswana to India until 2011
after a short stint as Consul General based in Cape Town, South Africa, Prior to joining the
Diplomatic Corp in 2005, she was managing and lead consultant of Business Clinic (Pty) Ltd.
She served on various and diverse entities as director including the Public Procurement and
Asset Disposal Board (PPADB), the National Development Bank (NDB), regarding
development operations and government initiatives such as BIDPA, UNCTAD (Geneva), ADF
(USA), and foreign aid funded projects like IDEAA Redesign Process and the Corporate
Council on Africa (SA). Passionate about aid for the underprivileged, she is a founder trustee
of Dinaletsana that serves autistic and Down's-syndrome children in Botswana.
25
Robert Neil Matthews (71) - Independent non-executive Director
Robert is a Certified Public Accountant (USA). Robert is a fellow of the Institute of Chartered
Accountants of England and Wales and the Botswana Institute of Chartered Accountants. He
serves as chairman on several audit committees of private and public companies, and acts as
an independent non-executive board member. A retired partner of PricewaterhouseCoopers
Gaborone, in charge of audit and business advisory services, he has gained extensive
professional and commercial experience in audit, taxation and business services. He currently
offers consulting and advisory services to various organisations.
Sydney Allan Muller (65) - Independent non-executive Director
Sydney holds the qualifications BCom (Hons), MBA (UCT), CA (SA) and AMP (Harvard).
Sydney was formerly the executive chairman of Woolworths Holdings Limited and a director of
other companies in the Wooltru Group. He is a director of MMI Holdings Limited, and sits on a
number of board subcommittees of that group. He is chairman of Holdsport Limited, as well as
of the sub-Saharan review board of Air Liquide SA. He is chairman of a number of private
operating companies.
Peter Baird (48) - Non-executive Director
Peter holds an MBA from Stanford, where he was an Arjay Miller Scholar, and a MA
(Economics) from the University of Cape Town. Peter is a Chartered Financial Analyst. Peter
is responsible for Standard Chartered Private Equity across sub-Saharan Africa. He has 18
years' experience in private equity, consulting and investment banking. He spent 11 years at
McKinsey in South Africa and in the USA, where he was a partner in the healthcare practice.
From 2006 to 2008, Peter was president of DJO Inc., a Blackstone-led medical devices LBO.
Earlier in his career he was principal at Brait Capital Partners, and in the M&A group at
Lehman Brothers.
26
ANNEXURE 6
MARKET VALUE OF ORDINARY SHARES
Choppies - Summary of Trading - 12 months preceding Last
Practicable Date
Aggregate Volume
Month
Total No. of Trades
Traded for the month
Lowest
Price (BWP)
Highest Price (BWP)
Mar-14
202
6 810 800
3.92
4.1
Apr-14
195
5 958 026
4.04
4.21
May-14
146
2 337 814
4.04
4.2
Jun-14
198
9 655 218
4.15
4.2
Jul-14
118
1 682 552
4.19
4.2
Aug-14
120
1 524 221
4.18
4.2
Sep-14
86
1 344 355
4.1
4.2
Oct-14
131
12 020 256
4.07
4.2
Nov-14
170
10 648 739
4.04
4.12
Dec-14
183
10 639 739
4.06
4.08
Jan-15
96
2 801 983
4.06
4.06
Feb-15
89
806 860
3.99
4.06
TOTAL
1 734
66 230 563
27
Choppies - Summary of Trading - Quarterly report for 24 months preceding
Last Practicable Date
Lowest
Quarter
Total No. of Trades
Total Volume Traded
Price (BWP)
Highest Price (BWP)
Q1 - March 2013
472
13 102 142
2.05
2.67
Q2 - June 2013
667
42 510 653
2.66
3.05
Q3 - Sep 2013
496
17 193 913
2.97
3.08
Q4 - Dec 2013
218
58 928 285
3.04
3.07
Q1 - March 2014
720
21 758 593
3.35
4.3
Q2 - June 2014
539
17 951 058
4.04
4.21
Q3 - Sep 2014
324
4 551 128
4.1
4.2
Q4 - Oct 2014
484
33 308 734
4.04
4.2
Jan & Feb 2015
669
36 917 577
3.99
4.06
4 589
246 222 083
TOTAL
Choppies - Summary of Trading - Daily for 30 days ended 23 March 2015
Date
Total No. of
Trades
Total Volume Traded
Lowest Price
(BWP)
Highest Price (BWP)
20-Feb-15
5
14 696
4
4
24-Feb-15
4
1 433
4
4
25-Feb-15
4
7 000
3.99
3.99
26-Feb-15
5
4 000
3.98
3.99
27-Feb-15
3
1 901
3.99
3.99
02-Mar-15
7
50 821
3.99
3.99
06-Mar-15
3
25 547
3.98
3.99
09-Mar-15
6
12 000
3.98
3.98
12-Mar-15
1
1 778
3.98
3.98
13-Mar-15
1
488
3.97
3.97
17-Mar-15
60
155 877 23
3.97
3.97
18-Mar-15
1
6 401
3.97
3.97
19-Mar-15
13
40 235 04
3.97
3.97
20-Mar-15
3
7 400
3.97
3.97
107
19 728 563
TOTAL
28