CLOVER TO LIST ON THE JSE ON 14 DECEMBER 2010

Clover, a leading branded consumer goods and beverages group operating in South Africa and other selected African countries, is expected to list on the securities exchange operated by the JSE Limited (“JSE”) on Tuesday, 14 December 2010. The Company will list its ordinary shares under the share code “CLR” in the “Food Producers” sector of the JSE Main Board and its preference shares in the preference share sector of the Main Board under the share code “CLRP”.

The listing will be in conjunction with an offer to raise up to R500 million (excluding the overallotment option) by way of a private placement of new ordinary shares in the Company’s issued share capital with institutional investors, selected other investors, management and existing ordinary shareholders. Rand Merchant Bank, a division of FirstRand Bank Limited, is the lead advisor and bookrunner for the offer.

The offer price for the shares will be between R9.00 and R12.00 per share. The final price will be determined following the conclusion of the offer and is expected to be announced on SENS on Thursday, 9 December 2010. The net proceeds of the offer of ordinary shares will be used to fund the Company’s capital projects, working capital and for general corporate purposes.

Clover’s primary capital project, Project Cielo Blu, aims to redress historical inefficiencies in the supply chain, increase profitability and expand capacity to support current and future growth plans through the relocation of production facilities closer to milk sources in order to reduce distribution and related costs as well as the expansion of key production and distribution centres and warehouses to create sufficient capacity to support current and future medium-term growth.

Clover Chief Executive, Johann Vorster, commented: “I look forward to welcoming new shareholders through this listing and capital raising. We have a clearly defined strategy to expand the business and the listing represents a major milestone in positioning Clover for its next growth phase.”

Clover has been operating since 1898 and has enjoyed a long and successful history as part of the development of South Africa’s dairy and Fast Moving Consumer Goods industry. Clover was converted from a co-operative society into a public company in 2003 and both its ordinary and preference shares currently trade on an over the counter market facilitated by the Company. On Monday 29 November 2010, Clover intends to suspend trading in the ordinary and preference shares on the over the counter market in order to facilitate the migration of trade to the Main Board of the JSE and the offering of new ordinary shares.

Clover’s financial performance is already benefitting from its alignment strategy and capital restructuring. Despite higher raw milk costs, the Company’s gross margin increased from 26,3% to 27,8% for the financial year to 30 June 2010. Contributing factors included an improved product mix, reduced production and packaging costs and fixed cost cutting initiatives. The Company reported an operating profit adjusted for exceptional items of R320,8 million (20009: R48,6 million) for the year.

“Clover’s brand, market position and expertise across the supply chain will be significantly strengthened through Project Cielo Blu which will see production facilities move closer to the source and our extensive distribution platform expanded further. These initiatives will save costs, eliminate bottlenecks in the supply chain and create significant growth opportunities through selective access to new markets,” concluded Johann Vorster.

This article was originally posted on South Africa Business Communities

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