Consumer packaged goods producer and supplier Libstar intends to list its issued ordinary share capital on the main board of the JSE.
The directors of the company believe the listing is the next step in Libstar’s growth phase and will provide access to additional capital to expand capacity and create additional capabilities in existing production facilities, and support management's strategy of continuing to invest in the current business units to improve margins and grow organically.
In addition, the company stated on Monday that the listing would help to establish a platform from which equity capital may be raised in the future to provide investors an opportunity to participate in the income streams and future capital growth of Libstar.
The listing will also allow Libstar to optimise its capital structure and further strengthen its balance sheet and profitability, while allowing a mechanism for the attraction and retention of black management and black employees through an appropriate share incentive scheme; and increase the public profile and transparency of Libstar and, thereby, assist in unlocking new growth opportunities globally.
Prior to the listing, Libstar expects to conclude a black economic empowerment transaction that will result in the establishment of an employee share trust, as well as a trust aimed at encouraging the development of black-owned businesses within Libstar’s value chain.
Both trusts will acquire a shareholding in Libstar through an issue of shares.
“The decision to embark on a JSE listing is an exciting step in the next phase of Libstar’s development and growth story. The capital that we raise from the listing will support our growth prospects and allow us to, among other things, invest further in our categories and manufacturing facilities,” Libstar CEO and cofounder Andries van Rensburg commented.
He added that key management will remain materially invested in Libstar, thereby ensuring strong alignment between existing and new shareholders.
Libstar CFO and cofounder Robin Smith, agreed that introducing Libstar to the public markets will enable the company to augment its growth strategy and strengthen its market position in a number of areas.
“Libstar has a strong record of growth and financial performance and is well positioned to capitalise on the opportunities that lie ahead for the future development of the company.”
The proposed offering from shareholders comprises an offer for subscription of new shares by the company of about R1.5-billion and a concurrent offer for the sale of shares by certain existing shareholders.
Through the offering, Libstar is targeting a free float of at least 40%.
Libstar expects to be listed in the Food Products sector of the JSE.