Jagdish bags P30m in CA Sales shares sale
Brian Benza | Tuesday October 17, 2017 18:00
CA Sales is selling 136 million shares at P3.45 each to both institutional and individual investors as part of plans that will see the company list on the Botswana Stock Exchange (BSE) on November 8, 2017.
The bulk of the shares are being sold through a private placement to institutional investors with only 27 million shares offered to individual investors through an Initial Public Offer (IPO). The IPO opened last Thursday and closes on November 1, 2017. The company, which is a service provider in the Fast Moving Consumer Goods (FMCG) industry, has its origins in Botswana but is now South African domiciled with operations in seven other African countries.
Shah, who is the managing director of the Botswana operations, currently holds 19.5 million shares in the company constituting a 4.8% stake. Post listing on the BSE, Shah’s stake will be almost halved to 10 million shares representing a 2.6% in the company. According to the company’s prospectus for listing on the BSE, about P470 million will be raised through the shares sale, with P420 million accruing to existing shareholders who are selling 121.6 million shares.
The biggest seller amongst the existing shareholders is a company called Export Marketing Investments Proprietary Limited which is offloading 106 million shares at P3.45 each.
As part of the listing process, CA Sales will also issue 14.5 million new shares to raise P50 million, which the company says will be used to fund the costs of the listing as well as future expansion projects.
Amongst some of the biggest buyers of the shares through the private placement are local fund managers such as Kgori Capital who are buying 36 million shares to become the third largest shareholders in CA Sales at 8.6% stake followed by Investec at six percent shareholding (25 million shares).
CA Sales had its first building block when JSE-listed PSG Holdings acquired Botswana’s largest consumer goods distribution company, CA Sales & Distribution in 2012 before expanding operations into the region.
The company now offers services including selling, merchandising, warehousing, distribution, marketing and promotions throughout Botswana, Swaziland (SMC Brands), Namibia (Pack n Stack), South Africa (Logico), Lesotho (SMC Brands), Zimbabwe (Bullred Distribution), Zambia (Expo Africa and Mozambique (Expo Africa).
“Through the shares offer and the listing, the company aims to raise capital for further organic growth and accretive merger and acquisition opportunities.
“The transaction will also provide shareholders with a liquid, tradable asset within a regulated environment, while also giving the general public an opportunity to acquire an equity stake in CA Sales and thereby share in its potential success in the future,” reads the company’s prospectus for the shares offer.
CA Sales markets and distributes products from companies such as Tiger Brands, Unilever SA, Nestle, Kellogg’s, Nampak, Aspen, Colgate Palmolive, Pioneer Foods and South African Breweries.
PSG is not selling its shares in the offer, but its stake will be diluted to 51% due to the new issued shares.
CA Sales and Distribution commenced trading some 27 years ago, as CA Enterprises in Botswana. In 2004, Dafin Sales and in 2006 Kalahari Sales were acquired by CA Enterprises and the name was changed to CA Sales and Distribution.
The company made a profit of R178 million in 2016.