Gaming major Lottotech has made an offer for sale of up to 85 million ordinary shares, following its listing on the official market of the Stock Exchange of Mauritius (SEM).
Both the offer for sale of up to 85 million shares as well as listing of 340 million shares on the exchange’s official list stand approved by the SEM.
Up to 85 million existing ordinary shares at an issue price of Rs 10 each, representing a discount of about 10% to the valuation as determined by consulting firm KPMG, will be sold by the current shareholders under this offer for sale.
The current shareholders of Lottotech are the State Investment Corporation (SIC) with 25% shareholding and Gamma Civic Ltd with 75% stake.
Up to 20% of the ordinary shares on offer will be reserved to be allocated to retailers of Lottotech, directors and employees of the Gamma group and SIC, with a discount of 5% on the offer price.
The Offer for Sale will open on May 5, 2014 and close on May 16, 2014. Allotment of fully-paid ordinary shares to shareholders and start of trading of ordinary shares on the Official List of the SEM will be June 9, 2014 and June 11, 2014 respectively.
Shareholders who successfully subscribe to the offer will have their ordinary shares credited to their CDS accounts on June 10, 2014 before trading starts on June 11, 2014.
It may be noted that the ordinary shares on Offer for Sale are not redeemable. However, the company may purchase or contract to purchase any of its ordinary shares, subject to the Listing Rules and the Companies Act 2001.
Lottotech, which runs the National Lottery on behalf of the government of Mauritius, is an important player in the island economy’s gaming market, which is estimated to be worth Rs 20 billion per annum.
Despite the economy’s downturn, Lottotech’s business has proven resilient and its leading position in the gaming market, trusted brands and experience in operating in the island’s regulatory framework have contributed positively to the company’s progress.
Lottotech is in regular dialogue with the Gambling Regulatory Authority to develop the industry further and has built a solid foundation upon which to consolidate its market position in the gambling industry.
One of Lottotech’s main objectives is to deliver profitable and sustainable growth. With a turnover of Rs 3.9 billion for the 18 months ended December 31, 2013, the company runs an important and profitable gaming operation.
From start of operations until December 31, 2013, Lottotech had made gross ticket sales of Rs 11.52 billion and Rs 6.06 billion prizes were given to winners. It has contributed Rs 2.5 billion to the Consolidated Fund and Rs 175 million to the National Solidarity Fund.
Retailers play a key role in the success of Lottotech and Rs 637 billion were attributed to retailers’ commissions. By year end, Lottotech is expected to increase the number of retailers from 895 to 1,000.
As per Lottotech’s constitution, it shall distribute a minimum of 75% of its annual net profit after tax as dividend, except as otherwise resolved by the shareholders by way of Ordinary Resolution.
The Board has a target dividend policy whereby almost 100% of net profit after tax would be declared as dividend, subject to the company meeting the Solvency Test.
Generally, it is expected that the company will declare an interim dividend in or around August and a final dividend in or around March following the year-end.
Finally, Gamma Civic Ltd, via a communique on the SEM, has advised all parties to be cautious while dealings in its shares.
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