Beruflich Dokumente
Kultur Dokumente
DEFINITIONS ABRIDGED TIMETABLE SUMMARY OF THE OFFER THE OFFER DIRECTORS AND OTHER PARTIES TO THE OFFER THE CHAIRMANS LETTER
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 1. 2. 3. 4. 5. 6. 7.
3 4 5 8 9 13
History and Business of the Company ............................................................................................................................ 14 Risk Factors and Mitigants ............................................................................................................................................. 20 Board of Directors........................................................................................................................................................... 22 Management and Staff .................................................................................................................................................... 24 Premises.......................................................................................................................................................................... 26 Purpose of the Offer........................................................................................................................................................ 26 Financial Summary ......................................................................................................................................................... 26 Working Capital, Profit and Dividend Forecasts ............................................................................................................ 28 Unclaimed Dividends...................................................................................................................................................... 28 Corporate Governance .................................................................................................................................................... 28 Research and Development............................................................................................................................................. 29 Mergers and Takeovers................................................................................................................................................... 29 Future Plans .................................................................................................................................................................... 29
30
Letter from the Reporting Accountants........................................................................................................................... 30 Profit Forecast for the Years Ending 31 December 2006, 2007, 2008 and 2009 ............................................................ 32 Bases and Assumptions................................................................................................................................................... 32 Letter from the Reporting Accountants in respect of the Going Concern Status............................................................. 35 Letter from the Issuing Houses ....................................................................................................................................... 36
38
Reporting Accountants Report....................................................................................................................................... 38 Statement of Accounting Policies ................................................................................................................................... 40 Profit And Loss Account................................................................................................................................................. 41 Balance Sheet.................................................................................................................................................................. 42 Cash Flow Statement ...................................................................................................................................................... 43 Notes to the Financial Statements ................................................................................................................................... 44
47
Incorporation and Share Capital History......................................................................................................................... 47 Shareholding Structure.................................................................................................................................................... 47 Directors Beneficial Interests......................................................................................................................................... 47 Indebtedness.................................................................................................................................................................... 48 Subsidiaries and Associated Companies ......................................................................................................................... 48 Extracts from the Memorandum and Articles of Association ......................................................................................... 48 Claims and Litigation...................................................................................................................................................... 56 Material Contracts........................................................................................................................................................... 56 Costs and Expenses......................................................................................................................................................... 56 Declarations .................................................................................................................................................................... 56 Relationship between the Issuer and its Advisers ........................................................................................................... 57 Related Party Transactions.............................................................................................................................................. 57 Consents.......................................................................................................................................................................... 57 Documents Available for Inspection............................................................................................................................... 59
61
Reporting Accountants Report....................................................................................................................................... 61 Statement of Accounting Policies ................................................................................................................................... 63 Profit And Loss Account................................................................................................................................................. 64 Balance Sheet.................................................................................................................................................................. 65 Cash Flow Statement ...................................................................................................................................................... 66 Notes to the Financial Statements ................................................................................................................................... 67 Segmental Financial Information .................................................................................................................................... 71
76 77 78
Page 2
DEFINITIONS
Access Bank BGL CAC CAGR CAPEX CSCS Dangote Sugar or the Company Deutsche Bank DIL DPS EBITDA Ecobank ECOWAS EGM EPS EU FBN Capital FCMB-CM FEPA Fidelity Bank FGN GDP IBTC ICML JIH JPMorgan LFN MBA NAFDAC Oceanic Bank PAT PBT Savannah Sugar SEC or the Commission SON The NSE or The Exchange The Offer or IPO Vetiva Zenith Bank Access Bank Plc BGL Securities Limited Corporate Affairs Commission Compound Annual Growth Rate Capital Expenditure Central Securities Clearing Systems Limited Dangote Sugar Refinery Plc
Deutsche Bank AG, London
Dangote Industries Limited Dividend Per Share Earnings Before Interest, Taxes, Depreciation and Amortisation Ecobank Nigeria Plc Economic Community of West African States Extra-Ordinary General Meeting Earnings Per Share European Union FBN Capital Limited FCMB Capital Markets Limited Federal Environmental Protection Agency Fidelity Bank Plc Federal Government of Nigeria Gross Domestic Product IBTC Chartered Bank Plc Intercontinental Capital Markets Limited Joint Issuing Houses JPMorgan Chase Bank, N.A., Johannesburg Branch Laws of the Federation of Nigeria Masters degree in Business Administration National Agency for Food, Drug Administration and Control Oceanic Bank International Plc Profit After Taxation Profit Before Taxation Savannah Sugar Company Limited Securities & Exchange Commission Standards Organisation of Nigeria The Nigerian Stock Exchange Offer for Sale of 3,000,000,000 Ordinary Shares of 50 kobo each in Dangote Sugar Refinery Plc at N = 18.00 per share Vetiva Capital Management Limited Zenith Bank Plc
Page 3
ABRIDGED TIMETABLE
DATE 15/11/2006 22/12/2006 10/01/2007 07/02/2007 21/02/2007 22/02/2007 26/02/2007 28/02/2007 14/03/2007 16/03/2007 19/03/2007 ACTIVITY Application List opens Application List closes Receiving Agents make returns Forward allotment proposal and draft newspaper advertisement to SEC Receive SEC authorisation of allotment Pay net proceeds of the Offer to DIL Announce allotment Return surplus/rejected application moneys Distribute share certificates Forward Declaration of Compliance to The Exchange Listing of Dangote Sugar shares and trading commences RESPONSIBILITY JIH JIH JIH/Registrars JIH JIH JIH JIH JIH/Registrars Registrars JIH/Stockbrokers JIH/Stockbrokers
Page 4
4. SHARE CAPITAL: Authorised: Issued and fully paid: Now being offered: 5. METHOD OF OFFER: 6. PURPOSE:
7. UNITS OF SALE: 8. OFFER PRICE: 9. OFFER SIZE: 10. MARKET CAPITALISATION AT OFFER PRICE: 11. PAYMENT: 12. PREFERENTIAL ALLOTMENT: 13. UNDERWRITING: 14. OPENING DATE: 15. CLOSING DATE: 16. QUOTATION:
17. STATUS:
Page 5
PRE-SCHEME OF ARRANGEMENT --- Dangote Sugar Division - Segmental financial summary as at--31/12/05 58,494,709 9,379,697 9,379,697 34,716,493 29,953,682 93.80 31/12/04 36,576,150 7,371,106 7,371,106 25,336,796 21,399,578 73.71 31/12/03 27,879,762 4,546,733 4,543,515 17,965,690 15,910,164 45.44 31/12/02 13,540,091 1,219,430 1,219,430 13,422,175 4,234,774 12.19 31/12/01 14,806,249 1,571,695 1,499,095 1,278,727 3,710,160 14.99
Calculations of adjusted earnings and dividend per share are based on the issued and paid-up capital of N = 5 billion comprising 10 billion Ordinary Shares of 50 kobo each as at the date of this Prospectus.
19. FORECAST OFFER STATISTICS: (Extracted from the Reporting Accountants Report)
Year ending 31 December Forecast EBITDA per share (kobo)* Forecast earnings per share (kobo)* Forecast dividend per share (kobo)* Forecast earnings yield at the Offer price Forecast dividend yield at the Offer price Forecast price/earnings ratio at the Offer price
*
Calculations of forecast EBITDA, earnings and dividend per share for the years ending 31 December 2006, 2007, 2008 and 2009 are based on the 10 billion Ordinary Shares of 50 kobo each expected to be in issue on those dates.
Dangote Sugar currently operates from its Corporate Office and a factory, both located in Apapa, details of which are provided below: Head Office: Modandola House 42/44 Warehouse Road Apapa Lagos Tel: +234 1 5804646-8 Fax: +234 1 2714466, 5804654 Email: SRefinery@dangote-group.com Factory: Shed 20 Apapa Wharf Lagos Tel: +234 1 5873162, 5873091, 5454468 Fax: +234 1 5454466
Page 6
Page 7
THE OFFER
A copy of this Prospectus and the documents specified herein have been delivered to the Securities and Exchange Commission for clearance and registration. This Prospectus is being issued in compliance with the provisions of the Investments and Securities Act Cap I24 LFN 2004, the Rules and Regulations of the Commission and the listing requirements of The Exchange and contains particulars in compliance with the requirements of the Commission and The Exchange, for the purpose of giving information to the public with regard to the Initial Public Offering of 3,000,000,000 Ordinary Shares of Dangote Sugar Refinery Plc by IBTC Chartered Bank Plc, Vetiva Capital Management Limited, Access Bank Plc, BGL Securities Limited, Ecobank Nigeria Plc, FBN Capital Limited, FCMB Capital Markets Limited, Fidelity Bank Plc, Intercontinental Capital Markets Limited, Oceanic Bank International Plc and Zenith Bank Plc. An application has been made to The Council of The Exchange for the admission to its Daily Official List of the whole of the Companys paid-up share capital. The Directors of Dangote Sugar individually and collectively accept full responsibility for the accuracy of the information contained in this Prospectus. The Directors have taken reasonable care to ensure that the facts contained herein are true and accurate in all respects and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no material facts the omission of which would make any statement herein misleading or untrue. IBTC CHARTERED BANK PLC
RC 125097
on behalf of
SHARE CAPITAL AND RESERVES OF THE COMPANY AS AT 30 JUNE 2006: (EXTRACTED FROM THE REPORTING ACCOUNTANTS REPORT)
AUTHORISED* ISSUED AND FULLY PAID** EQUITY 50 million Ordinary Shares of N = 1 each 50 million Ordinary Shares of N = 1 each Called-up share capital Share premium Revenue reserve SHAREHOLDERS FUNDS N = 000 50,000 50,000 50,000 11,270,524 7,811,435 19,131,959
At an Extra-Ordinary General Meeting held on 26 July 2006, the authorised share capital was increased from N = 50 million to N = 6 billion and the Companys shares were subdivided from N = 1 to 50 kobo.
** At an Extra-Ordinary General Meeting held on 20 August 2006, the issued share capital was increased from N = 50 million to N = 5 billion through the allotment of 9.9 billion ordinary shares to existing shareholders via a bonus issue.
Page 8
Page 9
JOINT RECEIVING BANKERS IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island Lagos First Bank of Nigeria Plc Samuel Asabia House 35 Marina Lagos First City Monument Bank Plc Primrose Tower 17A Tinubu Street Lagos Intercontinental Bank Plc Intercontinental Plaza Plot 999C Danmole Street Victoria Island Lagos Oceanic Bank International Plc 270 Ozumba Mbadiwe Avenue Victoria Island Lagos Skye Bank Plc Plot 708/709 Adeola Hopewell Street Victoria Island Lagos Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island Lagos
01 November 2006 The Directors IBTC Chartered Bank Plc I.B.T.C. Place Walter Carrington Crescent Victoria Island Lagos and The Directors BGL Securities Limited Plot 1061 Abagbon Close Victoria Island Lagos and The Directors FCMB Capital Markets Limited Primrose Tower 17A Tinubu Street Lagos and The Directors Oceanic Bank International Plc Waterfront Plaza 270 Ozumba Mbadiwe Avenue Victoria Island, Lagos Dear Sirs INITIAL PUBLIC OFFERING OF 3,000,000,000 ORDINARY SHARES OF 50 KOBO EACH IN DANGOTE SUGAR REFINERY PLC AT N = 18.00 PER SHARE At an Extra-Ordinary General Meeting of Dangote Sugar Refinery Plc held on 05 September 2006, the shareholders authorised the Board of Directors to undertake an Initial Public Offering to give every interested investor the opportunity to own shares in the Company, which is 99% owned by Dangote Industries Limited, and also enable the Company meet the requirements for a listing on The Nigerian Stock Exchange. JP Morgan and Deutsche Bank, two leading international investment banks, were engaged to provide certain preOffer financial advisory services to the Company along with the Lead Issuing Houses. At a subsequent Board Meeting held on 06 September 2006, the Directors approved an Offer for Sale of 3,000,000,000 Ordinary Shares of 50 kobo each at N = 18.00 per share. On behalf of the Directors of Dangote Sugar, I am pleased to provide you with information relating to the Company and the Offer, which you are making on our behalf.
Page 13
and The Directors Vetiva Capital Management Limited Plot 266B Kofo Abayomi Street Victoria Island Lagos and The Directors Ecobank Nigeria Plc Plot 21 Ahmadu Bello Way Victoria Island Lagos and The Directors Fidelity Bank Plc Fidelity Place 2 Kofo Abayomi Street Victoria Island, Lagos and The Directors Zenith Bank Plc Zenith Heights Plot 87 Ajose Adeogun Street Victoria Island, Lagos
and The Directors Access Bank Plc Plot 1665 Oyin Jolayemi Street Victoria Island Lagos and The Directors FBN Capital Limited 16 Keffi Street South West Ikoyi Lagos and The Directors Intercontinental Capital Markets Limited Wesley House 21/22 Marina Lagos
Refining Process The refining process comprises the following: Raw Sugar Handling Raw sugar is discharged from the vessels using movable Colby cranes, and delivered to the refinery by dump trunks loaded from sugar hoppers located close to the ship at the seaside. The hoppers are fed by sugar scooped from the ship hatches using the clamshell buckets located on the ship. Raw sugar is continuously sampled for quality laboratory testing as it is discharged from the vessel. Once the incoming raw sugar is weighed and sampled, it is conveyed via belts to storage facilities called the Raw Sugar Shed from where it is introduced into the refining process with large front-end loaders. Melting Raw sugar is made up of sugar crystals that have a film of impurities on the surface. It is mixed with warm sweetwater in a pre-melter to soften the film and is then fed sequentially into the melter followed by the addition of water and steam to complete the dissolution process and obtain a consistent liquor.
Page 14
Decolorisation The pressed liquor from the filters is pumped through resin to remove colour molecules. The resin takes out impurities not substantially removed by the taloclarification and filtration process. The decolorised solution is known as fine liquor.
Evaporation and Crystallisation An evaporator is used to remove some of the water prior to crystallisation. This fine liquor is fed into 10 large vacuum pans where the sugar crystals are grown. The crystallisation operation is completely automated which ensures the production of uniformly grained sugar crystals in batch-wise quantities.
Page 15
Sugar Recovery A three-strike boiling scheme is used in producing three grades of remelt or recovery sugar that are recycled through the melting operation. The final exhaust syrup is sent out as blackstrap molasses.
Sugar Conditioning The dried sugar discharged from the granulators is then screened by three Rotex Screeners to meet the particle size requirements and conveyed to conditioning silos equipped with dehumidified air. The conditioned white sugar leaves the silos at a moisture of less than 0.04%.
Page 16
Packaging Fortified refined white sugar is packed from bagging hoppers through a Simon Richard weigher, which discharges a minimum weight of 50kg of sugar into well labelled bags utilising the seven packing machines in the Packaging station.
Laboratory, Maintenance & Engineering Around the clock laboratory services are provided. Technical control, finished products, microbiological and environmental testing are all carried out at the refinery. Incoming raw sugar and other incoming products are tested in the special analysis unit of the refinery laboratory. Complete engineering and maintenance support is provided by skilled craftsmen (staff and engineering contracting firms). Inventories of parts necessary to maintain the refinery are kept on-site.
Boiler, Power & Water Plants The Boiler plant has a total generating capacity of 280 tons of steam per hour. Three steam turbo generators with a total capacity of 16 megawatts are used to provide the refinery with its own electrical power requirements as well as other sister companies within the Apapa port. The water treatment plant provides portable water for drinking, processing, fire protection and other uses, and can produce 8,000 cubic meters of water per day.
Page 17
All the white sugar produced by Dangote Sugar is sold in Nigeria. Although the Company does not formally export, its products find their way into neighbouring West African countries through informal cross-border trading. The Companys main marketing strategy is market development, relying on its growing distribution network to reach every nook and cranny of the country in the most cost effective manner. Dangote Sugars parent company, DIL, has been in the sugar business since 1978 and engaged in the importation of white sugar before commencing sugar refining in 2001. DIL and Dangote Sugar have developed a deep understanding of the Nigerian sugar market, based on the experience gained from over 28 years of selling white sugar in Nigeria.
1.3 Operating Environment Dangote Sugars prevailing operating environment and that expected in the foreseeable future appear very promising for the sustainable growth and profitability of the Company. The following are examples of positive developments in the Companys operating environment which should have a positive impact on its profitability: Nigerias economic growth Nigeria, which boasts of Africas largest population and one of the continents richest natural resource endowments, is well positioned to generate substantial domestic sources of growth. The countrys economic growth has been fairly rapid in recent years after decades of weak economic performance characterised by boom-bust cycles. GDP grew by 6.9% in 2005, after growing by approximately 6% in the previous year. The strong economic performance has been broad-based and is expected to continue into the foreseeable future. The continuing growth of Nigerias middle class is boosting the countrys consumption potential, as it is widely believed that real growth in wages and a rapid urbanisation rate underpin greater consumer spending power. Current dynamics of the world sugar market: Developments in the world sugar market point to a widening supply-demand gap that will greatly favour producers of refined sugar such as Dangote Sugar. Some of these developments include: EU sugar policy changes: Changes in EUs sugar policy will result in gradual reductions in subsidies to EU producers and selected importers. Subsidy cuts will result in EU sugar industry becoming less competitive. Thus EU sugar production is expected to decline significantly over the next two to three years.
Page 18