SOUTH AFRICA – Listed local drinks maker Distell Group plans to undertake a major restructuring of its multi-tiered ownership structure to a clearer and simpler shareholding structure.
The group said yesterday that the proposed restructuring would leave Distell shareholders with exactly the same economic interest in the new Distell and increase the free float in the new Distell on the JSE.
It said it would also result in the control of the new Distell vesting in Remgro through one or more of its subsidiaries through the issue of unlisted voting B-shares in the new Distell to Remgro.
Distell said the proposed restructuring had the support of the Public Investment Corporation (PIC) and Coronation Asset Management acting on behalf of its clients.
The PIC has a 27.7percent interest in Distell and Coronation 2.7 percent.
Remgro and Capevin each hold 50percent of the shareholding in Remgro-Capevin Investments, which owns a 52.8percent direct interest in Distell.
Distell said Remgro was also supportive of the proposed restructuring but would not be entitled to vote on it.
It said the transaction would, among other things result in the elimination of the current multi-tiered ownership structure of the group, leaving a single entry point in Distell.
The transaction was also likely to improve the demand, liquidity and marketability of the new Distell shares; simplify Distell’s capital structure, which was likely to improve Distell’s investment appeal to both foreign and local investors; and result in an increased free float of new Distell ordinary shares and enhance its weighting in stock market indices on both the JSE and internationally.
The group said the proposed transaction would also simplify Distell’s ability to raise capital if required to support its long-term growth strategy and retain the stability and continuity of Remgro remaining an anchor shareholder in Distell.
In terms of the proposed restructuring, Distell will become a wholly-owned subsidiary of New Distell and be delisted from the JSE, with Capevin also be delisted as part of the Capevin scheme.
But the new Distell listing will ensure that Distell shareholders were able to trade their new Distell shares on the main board of the JSE as they could in the past.
The economic rights of Distell shareholders will not be diluted by the issue of B-shares but their voting rights will be diluted by 35.8percent after the implementation of the proposed transaction.
The proposed transaction is subject to the fulfilment of a number of conditions precedent including the approval of Distell shareholders and the JSE.
The scheme meeting at which shareholders would vote on the proposed restructuring will take place in Stellenbosch on September 1.
Subject to the approval of the scheme, trading in Distell shares was expected to be suspended on the JSE on October 11 and Distell’s listing terminated on October 19.
July 23, 2017: BUSINESS REPORT