PROSPECTUS. COMPAGNIE DES VILLAGES DE VACANCES DE L ISLE DE FRANCE LIMITEE (the Issuer or the Company )

Transcription

1 PROSPECTUS OF COMPAGNIE DES VILLAGES DE VACANCES DE L ISLE DE FRANCE LIMITEE (the Issuer or the Company ) A public company limited by shares incorporated under the laws of Mauritius on 29 November 1972, bearing business registration number C and having its registered office at c/o MCB Group Corporate Services Ltd, 9-15, MCB Centre, Sir William Newton Street, Port Louis, Mauritius in respect of a Rights Issue of 11,322,000 Ordinary Shares ( New Ordinary Shares ) in a proportion of 0.20 New Ordinary Share for each Ordinary Share of the Company held on 19 December 2018 representing a total amount of MUR 260,406,000 Dated: 9 November 2018 (LEC reference number: LEC/RI/02/2018)

2 If you are a Shareholder of the Company, this document is important and requires your immediate attention This Prospectus is not an invitation to the public to subscribe for shares in the Company and is issued in compliance with the rules made by the Stock Exchange of Mauritius Ltd ( SEM ) governing the listing of securities on the Development & Enterprise Market of the SEM ( DEM Rules ), the Securities Act 2005 and the Securities (Public Offers) Rules 2007 for the purpose of giving information to the Shareholders of the Company and the public at large with regard to the Rights Issue. Securities shall not be issued under this Prospectus more than six (6) months after the date the Prospectus is granted effective registration. An application was made to SEM in relation to the Rights Issue and this Prospectus has been approved by the Listing Executive Committee of SEM ( LEC ) on 27 November A copy of this Prospectus has been filed and registered with the Financial Services Commission ( FSC ) pursuant to the Securities Act 2005 and the rules and regulations made thereunder. For a full appreciation of this Prospectus, the document should be read in its entirety. If you are in any doubt about the action you should take, you should consult your financial advisor, your investment dealer or any other independent advisor immediately. Neither the LEC nor the SEM, nor the Financial Services Commission ( FSC ) assumes any responsibility for the contents of the Prospectus. The LEC, SEM and the FSC do not vouch for the financial soundness of the Company and make no representation as to the accuracy or completeness of any of the statements made or opinions expressed in this document and expressly disclaim any liability for any loss arising from or in reliance upon the whole or any part thereof. The FSC shall not be liable for any action in damages suffered as a result of any prospectus registered by the FSC. This document is not to be redistributed, reproduced, or used, in whole or in part, for any other purpose. Unless otherwise specified herein, the statements and information contained in this Prospectus have been compiled as of 30 June Neither the delivery of this Prospectus nor any allotment or Issue of any New Ordinary Shares shall under any circumstances create an implication or constitute a representation that the information given in this Prospectus is correct as at any time subsequent to the date thereof. All questions and inquiries relating to this Prospectus should be directed to the attention of the MCB Group Corporate Services Ltd. Page 2 of 29

3 RESPONSIBILITY STATEMENT This Prospectus, deemed to be a further admission document pursuant to the DEM Rules, has been prepared in compliance with the Securities Act 2005, the Securities (Public Offer) Rules 2007 and the DEM Rules for the purpose of giving information with regard to the Issuer and its Rights Issue. The directors, whose names appear in paragraph 3.3, collectively and individually:- a) confirm that the accounts of the Issuer for the financial years ended 31 st October 2016, 31 st October 2017 and 30 th June 2018 have been prepared in accordance with the Securities Act 2005 and with relevant accounting standards, and accept full responsibility for them; b) confirm that there has been no material change in the financial and trading position of the Company since the last audited accounts ended 30 June 2018; c) confirm that, in their opinion having made due and careful enquiry, the working capital available to the Company will be sufficient for its present requirements, i.e. for at least twelve (12) months from the date of the listing of the New Ordinary Shares; and d) accept full responsibility for the accuracy and completeness of the information contained in this Prospectus and confirm, to the best of their knowledge and belief after having made all reasonable enquiries, that this Prospectus complies with the Securities Act 2005 (including applicable rules and regulations issued thereunder) and the DEM Rules, and that this Prospectus contains or incorporates all information which is material in the context of the Rights Issue, that the information contained or incorporated in this Prospectus is true and accurate in all material respects and is not misleading, that the opinions and the intentions expressed in this Prospectus are honestly held and that there are no other facts, the omission of which would make this Prospectus or any of such information or expression of any such opinions or intentions misleading. Unanimously approved by the Board (as defined below) of the Issuer on 4 October 2018 and signed on its behalf by: Director Director Page 3 of 29

4 Contents 1. Summary of key terms and definitions 5 2. Salient features of the Rights Issue 6 3. The Company, its Shareholders and Directors 7 4. The Company s Financials Rights Issue Terms and conditions of the Rights Issue Procedures for the Rights Issue Shareholding and dilution effect Expenses of the Issue Legal and arbitration proceedings Risk factors Extracts of Constitution Third Party Information Other disclosures Documents available for inspection 25 Page 4 of 29

5 1. Summary of key terms and definitions In this document, where the context permits, the expressions set out below bear the following meanings: Definition Meaning Act The Companies Act 2001 Application Form Board Business Day CDS Club Med Company or the Issuer Constitution DEM DEM Rules Entitled Shareholders EUR Excess Shares FSC HVMS IAS Lease Agreement LEC MCBRA MUR New Ordinary Shares Offer Letter The application form accompanying the Offer Letter The board of directors of the Company, as amended from time to time A day (other than a Saturday or Sunday or public holiday) on which banks are open in Mauritius Central Depository & Settlement Co. Ltd Club Med S.A.S, Societé par actions simplfiées incorporated and registered in France with company number Compagnie des Villages de Vacances de L Isle de France Limitée The constitution of the Company, as amended from time to time The Development & Enterprise Market of the SEM The rules made by the SEM governing the listing of securities on the Development & Enterprise Market of the SEM The shareholders of the Company whose names are registered in the share register of the Company at close of business of the Record Date Euros, the lawful currency of the European Union Shareholders who subscribe fully to their Rights shall be entitled to apply for New Ordinary Shares not taken up by other Shareholders Financial Services Commission Holiday Villages Management Services (Mauritius) Ltd, a private domestic company limited by shares with company number C3974. HVMS is a wholly owned subsidiary of Club Med International Accounting Standards The agreement entered on 24 October 2017 between the Company and HVMS in the presence of Club Med The Listing Executive Committee of the SEM MCB REAL ASSETS LTD, a private domestic company limited by shares with company number C As at the date of this Prospectus, MCBRA owns 93.03% of the Ordinary Shares issued by the Company. Mauritius Rupees The Ordinary Shares to be issued by the Company in accordance with the Rights Issue The offer letter to be sent by the Company to Shareholders entitled to subscribe to the New Ordinary Shares Page 5 of 29

6 Ordinary Shares Prospectus The existing ordinary shares issued by the Company and having the rights as described herein and in the Constitution This prospectus, deemed to be a further admission document pursuant to the DEM Rules, issued in compliance with the Securities Act 2005 and the Securities (Public Offers) Rules 2007 Registrar, Paying, and Transfer Agent MCB Registry & Securities Limited, being the registrar, paying and transfer agent of the Company Record Date Means 19 December 2018 Renovation Programme Resort Rights Rights issue SEM Shareholder Has the meaning ascribed to it in paragraph 4.2 of this Prospectus Hotel Club Med La Pointe aux Canonniers The entitlement of the Shareholders of the Company on the register as at the Record Date, to subscribe to their pro-rata share of the Rights Issue The issue of New Ordinary Shares The Stock Exchange of Mauritius Ltd A holder of Ordinary Shares in the Company 2. Salient features of the Rights Issue Registered Office Number of New Ordinary Shares to be issued c/o MCB Group Corporate Services Ltd, 9-15, MCB Centre, Sir William Newton Street, Port Louis, Mauritius Tel: Rights issue of 11,322,000 New Ordinary Shares, with par value of MUR 10 each, at an issue price of MUR 23 each. A Shareholder of the Company will be entitled to subscribe for 0.20 New Ordinary Share for every Ordinary Share registered in its name on the Record Date. The Company will not issue fractional shares. The number of New Ordinary Shares will be rounded down to the nearest integer when fractions occur. Amount to be raised under the Rights Issue MUR 260,406,000 As per the communique issued on 28 September 2018, MCBRA shall subscribe to (i) its entitlement of New Ordinary Shares and also (ii) to any New Ordinary Shares not subscribed. Consequently, there will be no minimum amount to be raised below which the Rights Issue will not proceed. Description of the New Ordinary Share The New Ordinary Share shall rank pari passu with an Ordinary Share and it will carry the same voting and economic rights as the Ordinary Shares, i.e. it will entitle the holder thereof to vote on all matters Page 6 of 29

7 requiring shareholders approval pursuant to the Act and the Constitution, to dividend and distribution rights upon the winding up of the Company. Purpose of the Rights Issue Shareholders may consult the Constitution for a full description of the rights associated with the Ordinary Shares. As per paragraph 4.2, the purpose of the rights issue is to provide equity financing for part of the Renovation Programme Record Date 19 December 2018 Opening of rights subscription Opening of trading of rights Closing of trading of rights Closing of rights subscription Last payment date Issue Date and credit CDS account Listing of the New Ordinary Shares 3 January January January January 2019 (1400 Mauritius time) 24 January January February 2019 A full calendar of events is set out in paragraph 7.1 of this Prospectus. 3. The Company, its Shareholders and Directors 3.1 Background and principal activities of the Company About the Company The Company is a public company limited by shares incorporated on the 29 th November 1972, is listed on the DEM and is the owner of the Resort. For the period of the 29 th November 1972 to the 25 th October 2017, the Company s major Shareholder was Club Med and pursuant to a share purchase agreement, Club Med sold its controlling stake in the Company to MCBRA. Since the 29 th November 1972, the Company has rented the Resort to HVMS. The Resort is Page 7 of 29

8 still being rented to HVMS, but in accordance with the terms of the Lease Agreement as from the 24 th October Other than renting the Resort, the Company has no other activity The Company Structure The Company structure is shown in the figure below. The Company has no subsidiary. MCB Group Limited 100% MCB REAL ASSETS LTD 93.03% Public 6.97% Compagnie Des Villages De Vacances De L'Isle De France Limitee 3.2 The Company s Shareholding Structure Share Capital As at the date of this Prospectus, the stated capital of the Company is EUR 16,911,879 made up of 56,610,000 fully paid Ordinary Shares of par value MUR 10 each. During the financial year 2017/2018, the Company changed its presentational currency from MUR to EUR. Hence and as per IAS 21, the stated capital of the Company was converted into EUR at the appropriate historical rate. The Company has only one class of shares in issue. At the Issue Date, the stated capital of the Company shall increase by an amount representing the proceeds of the Rights Issue. As the stated capital of the Company is in EUR, an exchange rate consistent with the IAS shall be used to convert the MUR proceeds into EUR Shareholding structure As described in paragraph above, MCBRA is currently the controlling shareholder of the Company, and further to a mandatory takeover triggered after the acquisition of the Club Med s shares in the Company, MCBRA now holds 93.03% of the Company. The Company has 470 shareholders. The Company s shareholding structure is shown in the table below. Number of Shares Number of Shareholders 0-25, ,001-50, ,001-75, , , ,001 and above 8 Total 470 Page 8 of 29

9 3.3 Directors of the Company The current directors names, profiles and biographies are included in the table below. The directors are all citizens of Mauritius. NAME BIOGRAPHY ADDRESS Maurice Jean Marc ULCOQ (independent director) Date of appointment: 27 May 2013 Age: 66 Maurice Martin St, Forest Side. Qualifications: Chartered Accountant (UK) Skills and experience: Jean Marc has developed throughout the past 15 years a strong and proven international expertise in managing both at the operational/financial sides as well as at directorship level many companies including listed companies in Mauritius, and international operations in countries such as South Africa, Madagascar, Mayotte and Reunion Island. He is a fellow member of the Mauritius Institute of Directors, member of the Committee setting up Corporate Governance Conventions in Mauritius and in the Audit and Accounting - Task Force. He also chairs the Audit Committee of several companies in Mauritius. He is also an independent director of Holiday Villages Management Services (Mauritius) Ltd and chairs the Audit and Risk committee. Robert IP MIN WAN (independent director) Directorship(s) in other listed or public companies: Southern Cross Tourist Company Ltd, The Union Sugar Estates Co. Ltd, Credit Guarantee Insurance Co. Ltd, Wular India Fund Date of appointment: 27 May 2013 Age: 41 Qualifications: BCom (Honours) in Business Studies and Chartered Accountant (UK) 10 Independence Avenue, Roche Brunes, Beau Bassin Skills and experience: Prior to his return to Mauritius, Robert was a Senior Manager in Deloitte London. He has 8 years Financial Services Audit and Assurance experience. In June 2008, he joined the Board of Mauritian Eagle Insurance Company Ltd (MEI) as an independent director. He chairs the Audit and Risk Committee of Page 9 of 29

10 MEI. He is also an independent director of Holiday Villages Management Services (Mauritius) Ltd and chairs the Corporate Governance committee. Margaret WONG PING LUN (Chairperson and nonexecutive director) Directorship(s) in other listed or public companies: Mauritian Eagle Insurance Ltd Date of appointment: 25 October 2017 Age: 64 Qualifications: BA (Honours) in Business Studies and Chartered Accountant (UK) Skills and experience: Prior to joining the University of Mauritius in 1991 where she is a lecturer in Accounting and Finance, Margaret was a Senior Manager at De Chazal Du Mée s Consultancy Department. She was formerly a member of the Listing Executive Committee of the Stock Exchange of Mauritius Ltd. She was appointed to the Board of MCB Ltd in 2004 and was a Director thereof until March 2014, after which she joined the Board of MCB Group Ltd following the restructuring of the MCB s group of companies. She currently sits on the Board of MCB Factors Ltd and MCB REAL ASSETS LTD, both subsidiaries of the MCB Group Ltd. Dr. Lallah Lane, Floreal, Mauritius Pierre Guy NOEL (non-executive director) Directorship(s) in other listed or public companies: Terra Mauricia Ltd, MCB Group Ltd Date of appointment: 25 October 2017 Age: 62 Qualifications: BSc (Honours) in Economics and Chartered Accountant (UK) Route Eureka, Moka, Mauritius Skills and experience: From 1981 to 1991, Pierre Guy worked at De Chazal Du Mée & Co. where he became a partner in financial consultancy. He joined MCB in 1992 as Planning and Development Consultant before being appointed General Manager of the Bank in Following the organisation s restructuring, he became the Chief Executive of MCB Group Ltd in April He is a board member of several companies within the MCB s group of companies, namely MCB Group Ltd, Banque Française Commerciale Océan Indien, MCB Page 10 of 29

11 Madagascar, MCB Seychelles, MCB Maldives, MCB Investment Holding Ltd, MCB Capital Markets Ltd, MCB Equity Fund Ltd, MCB Consulting Services Ltd, MCB Factors Ltd, International Card Processing Services Ltd, Credit Guarantee Insurance Co. Ltd, MCB Microfinance Ltd, MCB Forward Foundation, MCB Properties Ltd, MCB Group Corporate Services Ltd and MCB REAL ASSETS LTD, acting either as Chairperson or Director. He was appointed to the Board of MCB Ltd in 2005 and was a Director thereof until March 2014 when he joined the board of directors of MCB Group Ltd following the MCB group of companies restructuring exercise. Gilbert GNANY (non-executive director) Directorship(s) in other listed and/or public companies: MCB Group Ltd, Blue Penny Museum Date of appointment: 25 October 2017 Age: 56 Qualifications: Master s degree in Econometrics from the University of Toulouse and a DESS in Management/ Micro-Economics from Paris-X, France Port Chambly, Terre Rouge, Mauritius Skills and experience: Gilbert is currently the Chief Strategy Officer of the MCB Group Ltd. He previously worked as Senior Advisor on the World Bank Group s Executive Board where he was responsible for issues relating mainly to the International Finance Corporation and to the private and financial sectors. Prior to joining the World Bank, he was the MCB Group Chief Economist and Group Head of Strategy, Research & Development after having been the Economic Advisor to the Minister of Finance in Mauritius. During his career, he has been involved in various high-profile boards/committees. Amongst others, he chaired the Stock Exchange of Mauritius Ltd, the Statistics Advisory Council and the Statistics Board as well as having been a member of the Board of Governors of the Mauritius Offshore Business Activities Authority, a director of the Board of Investment and of the Mauritius Sugar Authority. He was also a member of the IMF Advisory Group for sub-saharan Africa and a member of the Senate of the University of Mauritius. He is currently a board member of several companies within the MCB group of companies, namely MCB Group Ltd, MCB Capital Markets Ltd, MCB REAL ASSETS LTD, MCB Seychelles, MCB (Maldives) Private Limited, MCB Madagascar, MCB Microfinance Ltd, MCB Group Corporate Services Ltd, MCB International Services Ltd, MCB Stockbrokers Limited, MCB Registry & Securities Limited, Page 11 of 29

12 3.3.1 Directors interest MCB Investment Services Limited, MCB Capital Partners Ltd, MCB Investment Management Co. Ltd, MCB Structured Solutions Ltd, MCB Forward Foundation, MCB Properties Limited, MCB Financial Advisers, CM Structured Products (1) Ltd, CM Structured Products (2) Ltd, MCB Leveraged Solutions (1) Ltd, MCB Leveraged Solutions (2) Ltd, MCB Group Corporate Services Ltd and MCB Consulting Services Ltd. On the institutional side, he is an external IMF expert in statistics, in particular on data dissemination standards and strategy. He is also a member of the Financial Services Consultative Council and a director of the Financial Services Institute. Furthermore, he is the Chairperson of the Economic Commission of Business Mauritius, which serves, inter alia, as a platform for public-private sector dialogue. Directorship(s) in other listed or public companies: Promotion and Development Ltd, Caudan Development Ltd, MCB Group Ltd, MCB India Sovereign Bond ETF and African Domestic Bond Fund As at 30 June 2018, the directors do not hold shares in the Company directly or through any associate (as defined under the DEM Rules) Directors service contracts None of the Directors has an existing or proposed service contract with the Company Material contracts The Company does not have any contract or arrangement subsisting at the date of this Prospectus in which a Loans and guarantees to Directors No loans or guarantees have been provided by the Company to any of its Directors Directors remuneration and benefits The directors emoluments for FY17/18 are included in the table below. Due to a change in the accounting year, the emoluments are for 8 calendar months (as opposed to a full year). Directors Emoluments EUR Maurice Jean Marc ULCOQ 1,642 Robert IP MIN WAN 1,642 Margaret WONG PING LUN 2,051 Pierre Guy NOEL Nil Gilbert GNANY Nil Page 12 of 29

13 Based on the arrangements in force as at the date of this Prospectus, total Directors emoluments for FY18/19 are estimated at EUR 8, The Company s Financials 4.1 The Lease Agreement Pursuant to the Lease Agreement, the Resort is currently rented to HVMS. The Lease Agreement is a 15 year unfurnished euro denominated triple net, fully repaired and insured lease expiring in October The rental income under the Lease Agreement is indexed to the Eurozone inflation rate and is backed by a revolving guarantee from Club Med. This rental guarantee is limited to two (2) years of applicable rental income. Prior to any inflation indexation, the annual rental income is EUR 4.65m. 4.2 The Renovation Programme The Resort is currently undergoing an extensive refurbishment (the Renovation Programme ). The Renovation Programme is being managed by Club Med pursuant to an Owner s Agency Agreement dated 25 th October 2017 (entered into by the Company and Club Med in the presence of HVMS) and has two major components: an upgrade of selected common areas and rooms; and an extension of the Resort through the construction of additional rooms. The Renovation Programme is expected to cost EUR 39.0m (excluding VAT) and shall terminate prior to 30 November The Company has agreed to finance the entirety of the Renovation Programme subject to the following main conditions: that the Company be satisfied that the costs being incurred under the Renovation Programme be in line with market practices; that the Company receives an additional rental income equivalent to a yield of 7.95% p.a. for every Euro of capital expenditure incurred under the Renovation Programme; and that the Company continues to receive its annual rental income of EUR 4.65m during the entire period the Resort is closed for the Renovation Programme. As at 30 June 2018, the Company has invested EUR 13.7m under the Renovation Programme. While the Renovation Programme has been funded through short-term borrowings, the Company shall refinance the short term debt with longer term borrowings and aim to maintain a long-term loan-to-value ratio of approximately 60%. To meet this target, the Company: has obtained a bank loan facility of EUR 29.6m over a 15 year period from a foreign lender. The loan shall refinance the short-term borrowings and be used for funding part of the Renovation and shall be in addition to existing bank loan facility of EUR 27.9m, these loans being secured by floating charge agreements on a pari passu basis and a pledge of receivables agreement. Thus, the total debt funding amounts to EUR 57.5m; and Page 13 of 29

14 is raising funds through the issuance of the New Ordinary Shares. The Company s investment is solely in Mauritius. Other than the Renovation Programme, the Company does not intend to pursue any additional investments in the near future. 4.3 Financial performance Recent trends The Lease Agreement provides for a rental revenue which is independent of the performance of the Resort. On the basis that the Renovation Programme costs EUR 39.0m, the annual rental income is expected to rise to EUR 7.75m prior to any inflation indexation. Accordingly, the dividend per share is expected to be higher than that paid out in FY 2017/ Audited financial statements The audited financial statements of the Company for the last three (3) years (including the names and addresses of the external auditor of the Company), the external auditor s reports on these financial statements are set out in Annexure 1 of this Prospectus. An extract of the P&L for the last three financial years is shown in the table below. COVIFRA P&L for last three years Period from 01-Nov-17 to 30-June 2018 Restated Year ended 31-Oct-17 Year ended 31-Oct- 16 EUR EUR MUR Income 3,395,599 3,795, ,704,414 Expenses (110,554) (4,583,332) (20,617,209) Exchange Loss (44,331) (564,198) Fair Value Gain 5,561,400 Finance Costs (1,157,173) (2,192,305) (77,790,545) Profit Before 2,083,541 2,016,615 55,296,660 Taxation Taxation (549,785) 1,080,555 (8,702,005) Profit After Tax 1,533,756 3,097,170 46,594,655 The expenses for the year ended 31 October 2017 include a one-off lease smoothing adjustment of EUR4m Earnings per share and net asset value per share The earnings per share and net asset value per share are shown in the table below. The earnings per share for FY 2017/18 relate to 8 calendar months (i.e. 8 months ended 30 June 2018) while those of FY 2016/17 are for an entire calendar year (i.e. 12 months ended 31 October 2017). EUR FY 2017/18 FY 2016/17 Earnings per share Net asset value per share Page 14 of 29

15 4.3.4 Dividend policy Dividends under MCBRA management MCBRA became the Company s controlling shareholder in October Under MCBRA s management, the Company announced a targeted dividend yield of between 5% and 6% based on an average share price of MUR Accordingly, for the financial year ending 30 June 2018, the Company declared and paid the following interim and final dividends: Dividend Date of declaration of dividends Date of payment of dividends Dividend per share (MUR) Interim 4 June July dividend Final dividend 28 September November Dividends under previous management During the financial year ended 31 st October 2017, the Company declared a special dividend per share of MUR 4.70 on the 25 th October This special dividend was paid on the 17 th November No dividends were declared and paid during the financial year ended 31 October Dividend payment dates Effective as from the FY 2018/19, the Company shall use all reasonable endeavours to pay out an interim dividend in July and a final dividend in December. 5. Rights Issue 5.1 Reasons for the Rights Issue and use of proceeds As explained in paragraph 4.2, the purpose of the Rights Issue is to provide equity financing for funding part of the Renovation Programme. 5.2 MCBRA Subscription In its capacity as the controlling shareholder of the Company, MCBRA has committed to taking (i) all of its Rights (i.e. 10,533,155 New Ordinary Shares), and (ii) any New Ordinary Shares not subscribed for. As a result of the commitments provided by MCBRA, the Rights Issue is expected to be fully funded. 6. Terms and conditions of the Rights Issue 6.1 Nature and amount of the Rights Issue Page 15 of 29

16 6.1.1 The Company intends to offer to its Shareholders the right to subscribe to 11,322,000 New Ordinary Shares at a price of MUR23 each and having the rights set forth hereinafter. The Company is looking to raise MUR 260,406,000 by this Rights Issue Each Entitled Shareholder shall have the right to subscribe to 0.20 New Ordinary Share for each one (1) Ordinary Share held at the Record Date Upon completion of the Rights Issue, the New Ordinary Shares shall rank in all respect pari passu with the Ordinary Shares. The New Ordinary Shares will be listed and traded on the DEM as from 4 February The New Ordinary Shares will be issued in registered form The International Security Identification Number (ISIN) is MU0102I Issue Price The price of the New Ordinary Shares has been derived based on the average closing share price of the Company for the month prior to the announcement of the Rights Issue. The Issue Price of MUR 23 per share represents a discount of 2.4% to the monthly average closing share price of MUR The Directors confirm that they have made due enquiry and are satisfied that the issue price for the Rights Issue is fair and reasonable to the Company and all its existing Shareholders under Section 56(1) of the Companies Act Offer period The window for Entitled Shareholders to exercise their Rights will start at 0900 (Mauritius time) on 3 January 2019 and will close at 1400 (Mauritius time) on 24 January If the Rights have not been exercised during this period by an Entitled Shareholder, it shall be deemed that the offer has lapsed in respect of that Entitled Shareholder. 6.4 Acceptance of Subscription Acceptances to subscription to the Rights Issue are irrevocable and cannot be withdrawn Shareholders may accept, wholly or partly, to subscribe for New Ordinary Shares by completing and signing the Application Form The completed Application Form must be returned with full payment to MCB Registry & Securities Limited, 2 nd Floor, MCB Centre, Sir William Newton Street, Port Louis, Mauritius not later than 24 January 2019 at 1400 (Mauritius time) If the Application Form and the payment are not received within the timeframe set out above, the Rights will be deemed to have been declined and the right to subscribe to the New Page 16 of 29

17 Ordinary Shares will lapse in respect of those Entitled Shareholders. Incomplete Application Forms will be rejected. 6.5 Application for New Ordinary Shares not taken Applications for Excess Shares shall be on the same terms and conditions as those of the New Ordinary Shares. Excess Shares shall be offered and allocated by the Board at a subscription price of MUR 23 per share to applicants who have duly completed, signed and returned the Application Form. The allotment of Excess Shares shall be on a pro-rata basis based on the following factors: (i) the number of Ordinary Shares held by an applicant; (ii) the Excess Shares applied for by the applicant; and (iii) the Shareholder s pre-emptive rights as per the Constitution Shareholders wishing to apply for Excess Shares should complete the relevant parts of the Application Form at the time of subscription. The Application Form must be returned with the payment for the Excess Shares to MCB Registry and Securities Limited, 2 nd Floor, MCB Centre, Sir William Newton Street, Port Louis, Mauritius. A separate bank transfer instruction form should be completed to apply for Excess Shares. 6.6 Fractional shares The Company will not issue fractional shares and the number of New Ordinary Shares will be rounded down to the nearest integer whenever a fraction occurs. Unallocated fractions, if any, will be pooled together with unsubscribed Rights to meet applications for Excess Shares. 6.7 Pre-emptive rights of Shareholders of the Company Existing Shareholders will have pre-emptive rights to subscribe to the New Ordinary Shares in accordance with its Constitution. 6.8 Sale of Rights Shareholders who do not wish to subscribe to any or part of the New Ordinary Shares offered in terms of the Offer Letter may sell their Rights on the DEM through one of the licensed investment dealers (please refer to the FSC s website for the register of investment dealers). For Shareholders having a CDS account, the Offer Letter should be deposited through one of the investment dealers from the 7 January 2019 until 11 January Shareholders who do not have a CDS account and hold Ordinary Shares in certificated form and do not wish to subscribe to any or part of the New Ordinary Shares offered in terms of the Offer Letter, may sell their Rights. However, those Shareholders should first deposit the Offer Letter through one of the licensed investment dealers by latest 11 January The Rights will be traded on the DEM from 14 January 2019 to 18 January Purchase of Rights Page 17 of 29

18 The applicants for the Rights purchased on the DEM are requested to complete an additional form which shall be made available by licensed investment dealers in that respect. The form should be completed and remitted together with the full amount due in respect of the purchase of Rights. The relevant investment dealer shall then remit the completed form to the Registrar, Paying and Transfer Agent by latest 18 January Transmission of Rights All or part of the Rights may be transferred to related parties by completing the relevant section of the Application Form in accordance with the instructions contained therein and supported by appropriate documentation specified therein Relationship in respect of any transfer shall be as follows: Husband/wife; Ascendant/descendant; succession or heir Registered holders of Ordinary Shares burdened with usufruct who do not propose to subscribe for the New Ordinary Shares may forward the offer to its/his/her usufructuaries who may subscribe all or part of the New Ordinary Shares on offer in full ownership within the offer period prescribed above A Shareholder or a usufructuary of a share in appropriate cases will be deemed to have declined the offer to subscribe for the New Ordinary Shares under the Rights Issue if it/he/she fails to meet the deadline of 24 January 2019 at 1400 (Mauritius time) to send the duly completed and signed form, with full payment, to the Registrar, Paying and Transfer Agent Methods of payments Payments for subscription to the full/partial amount of New Ordinary Shares application(s) should be made by bank transfer by latest 24 January 2019 (1400 Mauritius time) and all bank transfers shall be effected to the bank account of the Company, detailed as follows: Bank Account Name: Compagnie des Villages de Vacances de L Isle de France Limitée Bank Name: The Mauritius Commercial Bank Limited MUR Current Account Number: and the shareholder reference (as mentioned in the Offer Letter) must be quoted in the bank transfer transaction and bank transfer receipt. A copy of the bank transfer receipt must be enclosed with the completed and signed appropriate form The Company will reject applications for New Ordinary Shares where the bank transfer has failed. Page 18 of 29

19 No cash or cheque payment will be accepted Issue and allotment of New Ordinary Shares The Registrar, Paying and Transfer Agent shall carry out the procedures in relation to the allotment and issue of the New Ordinary Shares These procedures include: Receiving and vetting Application Forms; Confirming that funds received in the Company s bank account are correct; Updating the relevant registers and records; and Allotting the New Ordinary Shares and credit the CDS accounts Issue of Allotment Letters A letter of allotment will be sent by the Registrar, Paying and Transfer Agent to each subscriber by 4 February 2019 to confirm the number of New Ordinary Shares allotted to them by the Company Refunds No interest will be paid on monies received in respect of applications for Excess Shares. Refunds in respect of unsuccessful applications shall be effected by bank transfer to the bank account details of the relevant applicant, by latest the 4 February Listing of New Ordinary Shares The New Ordinary Shares will be listed and traded on the DEM as from 4 February Governing law and Jurisdiction This Prospectus shall be governed by and interpreted in accordance with the laws of the Republic of Mauritius In the event of a dispute arising out of or relating to this Prospectus, including any question regarding its existence, validity or termination, the Parties shall first seek settlement of that dispute by mediation in accordance with the MCCI Arbitration and Mediation Center ( MARC ) Mediation Rules, which rules are deemed to be incorporated by reference into this paragraph If the dispute is not settled by mediation within thirty (30) days of the appointment of the mediator, or such further period as the parties shall agree in writing, the dispute shall be referred to and finally resolved by arbitration under the MARC Arbitration Rules, which rules are deemed to be incorporated by reference into this paragraph In any arbitration commenced pursuant to this paragraph 6.16: a) the number of arbitrators shall be one; and Page 19 of 29

20 b) the seat, or legal place, of the arbitration shall be Port Louis, Mauritius The language to be used in the mediation and in the arbitration shall be English. 7. Procedures for the Rights Issue 7.1 Timetable Events Scheduled Date First cum rights trading session 28 November 2018 Last day to deposit share certificates at CDS in order to trade 12 December 2018 shares including the rights Last cum rights trading session 14 December 2018 Shares traded ex-rights 17 December 2018 Close of shareholders register after cum rights trading (Record 19 December 2018 Date) Opening of rights of subscription (0900) 3 January 2019 First day to deposit letter of offer to CDS 7 January 2019 Last day to deposit letter of offer to CDS 11 January 2019 First day of trading of rights 14 January 2019 Last day of trading of rights 18 January 2019 Closing of rights of subscription (1400) 24 January 2019 Last Payment date 24 January 2019 Issue of a communiqué announcing the results of the Rights 29 January 2019 Issue Issue Date and credit CDS accounts 31 January 2019 Listing and trading of the New Ordinary Shares on the DEM 4 February 2019 Issue of letter of allotment and refund of excess subscription monies 4 February Board approval The Rights Issue has been approved by the Board on 28 September 2018 and was approved by the Shareholders on the 11 October Documents submitted to regulators A copy of this Prospectus, deemed to be a further admission document pursuant to the DEM Rules, has been submitted and filed with the FSC An application has been made to the LEC of the SEM for the issue and listing of the New Ordinary Shares on 4 October The LEC has approved the application on 27 November 2018, reference LEC/RI/02/ Shareholding and dilution effect 8.1 Substantial interests in shares and shares in public hands Page 20 of 29

21 The list of Shareholders as at 30 June 2018 is as follows: Member Number of Shares % shareholding Controlling shareholder MCBRA 52,665, Public hands 3,944, Dilution Effect The shareholding prior to the issue of the New Ordinary Shares is as per table 8.1 above. Due to the commitments provided by MCBRA (outlined in paragraph 5.2 of this Prospectus), MCBRA s shareholding in the Company is expected to be at least 93.03% post the issue of the New Ordinary Shares. If only MCBRA participates in the Rights Issue, MCBRA s shareholding will increase to 94.2%. 8.3 Dilution The existing Shareholders of the Company will suffer no dilution in their shareholding following the Rights Issue if they subscribe to the issue in accordance with their respective pre-emptive right. An existing Shareholder who does not subscribe to the Rights Issue will be diluted by 16.7%. 9. Expenses of the Issue The net proceeds of the Rights Issue are expected to be MUR 260.4m and the total expenses (outlined in the table below) born by the Issuer are expected to be MUR 1.95m. Details of expenses MUR 000 Auditor s Report 85 SEM application fee 65 FSC registration fee 100 Legal certificate 100 Printing, stationery, and postage 500 Advisory fees 1,000 Others (contingencies and escalations) 100 Total estimated expenses 1, Legal and arbitration proceedings During the last twelve (12) months, the Company was not a party to any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which have had or may have a significant effect of the Company s financial position or profitability. Page 21 of 29

22 11. Risk factors 11.1 Dividend risk: If the Company does not have sufficient free cash or distributable reserves, the Board may not declare dividends Capital depreciation: The New Ordinary Shares will be quoted on the DEM and their value may go up or down based on several factors, including demand for the New Ordinary Shares, financial performance of the Company, perception of risks attached to the Company, changes in interest rates, the health of the tourism industry, and market risk. Shareholders investing in the New Ordinary Shares face a risk of capital depreciation Liquidity risk: The New Ordinary Shares may be difficult to sell due to the shareholding structure outlined in paragraph As such, Shareholders wishing to sell a large block of New Ordinary Shares in a relatively short amount of time may have to do so at a discount to the prevailing share price Foreign exchange risk: The Company s income is euro denominated. A relatively small proportion of its expenses is in Mauritian rupees. Thus, the Company s earnings are exposed to adverse EUR/MUR movements Leasing risk: The Company derives its only source of income under the Lease Agreement. Thus, should HVMS s performance deteriorate materially, it may not be able to pay the rent. However, pursuant to the Lease Agreement, the parent company of HVMS, i.e. Club Med, has given a corporate guarantee to the Company which guarantees any default by HVMS of its payment obligations under the said Lease Agreement. Therefore, the risk in relation to the hotel industry is minimal to the Company Club Med default risk: The obligations of HVMS are guaranteed by Club Med. As such, the Company is exposed to the Club Med default risk Environmental risk: The Resort is situated on the seafront and as such may be potentially affected by the changing climatic conditions, namely through sea level rise, amongst others. 12. Extracts of Constitution 12.1 Objects and purposes of the Company (Article 3) The main objects of the Company are as follows: To acquire, to sell, to take leases, to give leases, to own in any form, lands, movable and immovable properties with the objective of building, equipping, maintaining, exploiting, managing or administering directly or indirectly, holiday villages and hotels, which comprises of hosting services, restauration and tourist transporting, organization of trips including tours or outings with a touristic and cultural goal, together with sports facilities and leisure centers and/ or entertainment and generally all the services proposed and/ or related activities necessary to the realization of the activities mentioned above or requested by the tourists. Page 22 of 29

23 To undertake any task which is related to the object described above including the duties as owner of hotel, restaurant, places of entertainment and easement operators. With respect to the objects provided above, to go through all the steps, execute any relevant contracts and provide the supply of services with the aim of developing a touristic client database as wide as possible, and In a more general manner, to fulfill other operations which are directly or indirectly linked, totally or partially, to the objects mentioned above or all the similar objects, related or which tends to favour its realization Stated Capital (Article 5) The stated capital of the Company is MUR 566,100,000 divided into 56,610,000 ordinary shares of par value MUR10 each and having the same voting and economic rights (dividend and distribution upon the winding up of the Company) The Board may issue additional ordinary shares in the Company (having the same or different rights in accordance with the Act) Issue of new shares (Article 11) Subject to the pre-emptive rights of the existing Shareholders as described in section 55 of the Act, the Board may issue new shares in the Company in accordance with section 52 of the Act Transfer of shares (Article 12) Every Shareholder may, within the parameters of the law, transfer part or all of its shares to another person (being a Shareholder or not) with or without a consideration Buy Back and redemption (Article 13) The Company can buy back shares issued by it in accordance with the Act. It may also hold these shares acquired by it on treasury or transfer these shares in accordance with Section 72 of the Act The Company may issue redeemable shares in accordance with the Act Meeting of shareholders (Article 16) Subject to the provisions as outlined in Article 16, the proceedings of the meeting shall be governed by the 5 th Schedule of the Act Notice of meeting shall be served on the shareholders, directors, secretary, auditor or such other persons as the Board deems fit at least 15 days prior to the meeting Where there are joint holders of a share, the notice shall be sent to the one whose name appears first in the share register. Page 23 of 29

24 Where a shareholder dies or is declared bankrupt, notices will be sent to his heir or agent (as he may have notified to the Company) or to the trustee (in case of bankruptcy). Otherwise, notices will be sent to the attention of the deceased as if there was no death or bankruptcy A meeting of shareholders is properly held where duly convened and quorates with the presence of shareholders or their respective proxies representing at least 50% of the voting shares of the Company plus 1 additional share Where the meeting does not quorate, the Board may call, and fix a date, for a second meeting. At this second meeting, no quorum is required The Board (Article 17) The directors are appointed by way of ordinary resolution Unless otherwise determined by way of a special resolution, the Company shall have a minimum of 4 directors and a maximum of 12 directors Where the place of a director is vacant, the directors may appoint a replacement director or a new director until the next annual meeting. This remains subject to the maximum limit of directors as described above The appointment of a director terminates (i) where there is an ordinary resolution in accordance with Section 138(1) of the Act passed to that effect, or (ii) for the reasons described in Section 139 of the Act Every director may appoint or remove an alternate director (who can be an existing director) by way of simple notice given to the Company An alternate director has the same rights as its appointee director (save for remuneration matters, appointment of alternates and acting as chairperson) and has the same obligations as its appointee director The appointment of the alternate director terminates where the appointment of its appointee director terminates The directors are remunerated in accordance with Section 159(1) of the Act Subject to the provisions as set out in this Article 17, the proceedings of the meeting of the Board shall be governed in accordance with the 8 th Schedule of the Act A quorum for the Board meeting requires the presence of the majority of the directors Subject to the applicable laws, the Board has the power to control and manage the affairs of the Company and is empowered to act on behalf of the Company (save for matters requiring shareholders approval under the Act or under the Constitution or where there is a recommendation of shareholders in accordance with Section 107(2) of the Act). Page 24 of 29

25 The Board may delegate its powers in accordance with Section 131 of the Act The Board may appoint one of its person to act as chairperson for such period as it may deem fit 12.8 Dividends (Article 26) Subject to the Solvency Test as described in the Act, the Board may declare and pay dividends when it deems fit. 13. Third Party Information Company Secretary Registrar, Paying and Transfer Agent Principal Banker MCB Group Corporate Services Ltd MCB Centre, Sir William Newton Street, Port Louis, Mauritius MCB Registry & Securities Limited 2 nd Floor, MCB Centre, Sir William Newton Street, Port Louis, Mauritius The Mauritius Commercial Bank Ltd MCB Head Office, Sir William Newton Street, Port Louis, Mauritius External Auditor Up to 16 November 2018: Deloitte, 7 th Floor, Standard Chartered Tower, Bank Street, Cybercity, Mauritius Transaction Advisor Legal Advisor to the Rights Issue As from 17 November 2018: BDO & Co, 10 Frère Felix de Valois Street, Port Louis, Mauritius MCB Financial Advisers MCB Head Office, 9 th Floor, Sir William Newton Street, Port Louis, Mauritius BLC Robert & Associates Ltd 2 nd Floor, The AXIS, 26 Bank Street, Cybercity, Ebene 72201, Mauritius 14. Other disclosures The Company does not have any employee share schemes. 15. Documents available for inspection The following documents will be available for inspection during normal business hours between until 24 January 2019 at the registered office of the Company: c/o MCB Group Corporate Services Ltd, 9-15, MCB Centre, Sir William Newton Street, Port Louis, Mauritius: Constitution of the Company Prospectus The audited financial statements of the Company for the period ending 31 October 2016, 2017 and 30 June 2018 Consent letter from external Auditor Page 25 of 29