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Johannesburg - Capital Appreciation [JSE:CTA] will commence a private placement offering process to qualifying and invited investors on Monday, with the intention of listing as a Special Purpose Acquisition Company (SPAC) in the specialty finance sector on the main board of the securities exchange operated by the JSE.
The company expects to list on the October 16 2015, at an offer price of R1 per share.
Capital Appreciation has been established by Motty Sacks, Bradley Sacks, Alan Salomon and Michael Pimstein with investment from the Public Investment Corporation (PIC) and the Capital Appreciation Empowerment Trust (CAET), a black economic empowerment trust established in conjunction with the company.
Capital Appreciation said in a statement issued on Monday that it intends to raise at least R500m, being the minimum capital required to be raised in order to list as a SPAC on the main board, but will raise significantly more if demand warrants. The PIC has committed to invest R250m and CAET has committed to invest R50m as part of the private placement.
African Rainbow Capital, a wholly black-owned investment company - the directors of which include Patrice Motsepe and Johan van Zyl - has also committed to invest R50m.
The company said that upon listing, Capital Appreciation will have no operating business and exist only to acquire control of one or more enterprises of scale with good growth potential, including in the services sector.
Investors’ funds will be held in escrow until the first acquisition is approved by shareholders. The funds, plus accrued interest, minus permitted expenses will be returned to shareholders if an acquisition is not completed prior to the second anniversary of the listing or such later date at the JSE may permit.
Capital Appreciation has appointed a board comprising Motty Sacks, Pimstein, Bradley Sacks, Salomon, Bukelwa Bulo, Meyer Kahn, Victor Sekese and Charles Valkin as independent non-executive directors and Dr Daniel Matjila (CEO of the PIC) and Roshan Morar (deputy chairman of the PIC) as non-executive directors.
Prof. Mervyn E King SC has also been appointed as a special adviser to the board in relation to commercial and corporate governance matters.
"We are pleased to be part of this ground breaking initiative and hope that the investment community will support the listing. The founders are not only likeminded on investment principles, but equally so, on the imperatives for BEE promotion. The SPAC structure could well serve as a viable model to address some of the investment and industrialisation objectives in South Africa. We look forward to a successful raising of capital and fully support Capital Appreciation and its leadership,” said Matjila.
