NEW FUTURES LTD ADMISSION DOCUMENT

Transcription

1 NEW FUTURES LTD ADMISSION DOCUMENT Admission document pursuant to the Development & Enterprise Market Rules in respect of the listing of 22,500,100 Class B Shares of no par value issued at EUR 1 each by NEW FUTURES LTD by way of private placement. Admission Document dated 9 June 2017 (Amended on 26 July 2017) Page 1 of 36

2 NEW FUTURES LTD ( NFL, the Issuer or the Company ) Incorporated in the Republic of Mauritius on 27 June 2014 as a limited liability company bearing business registration number C Registered office: Suite 109 Chemin Vingt Pieds, Grand-Baie Business Quarter, Grand Baie, Mauritius Tel: (+230) Admission document in respect of the listing of 22,500,100 Class B Shares (the Class B Shares ) on the Development & Enterprise Market of the Stock Exchange of Mauritius Ltd by way of private placement. 9 June 2017 (Amended on 26 July 2017) LEC/P/08/2017 Transaction Adviser MCB Capital Markets Page 2 of 36

3 IMPORTANT INFORMATION This admission document ( Admission Document ) should be read in its entirety. The Admission Document is issued in the context of the listing of New Futures Ltd on the Development & Enterprise Market of the Stock Exchange of Mauritius Ltd ( SEM ). The Admission Document includes particulars given in compliance with the Development & Enterprise Market rules governing the listing of securities for the purpose of giving information with regard to the Issuer. This Admission Document is neither an invitation nor a prospectus nor a statement in lieu of a prospectus for the public in Mauritius or elsewhere to subscribe for the Class B Shares. In addition, nothing in this Admission Document should be construed as a solicitation or offer of, or invitation to subscribe, Class B Shares. The Class B Shares will be offered in furtherance to a private placement (refer to Paragraph 6). The Development & Enterprise Market is a market designed to include emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. The Development & Enterprise Market securities are not admitted to the Official Market of the SEM. Prospective investors should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with a professional financial adviser. An application has been made to the SEM for the listing and permission to deal in the Class B Shares of NFL. Permission has been granted by the Listing Executive Committee of the Stock Exchange of Mauritius Ltd (the LEC ) on 9 June A copy of this Admission Document has been filed with the Financial Services Commission ( FSC ). Neither the LEC, nor the SEM, nor the FSC assumes any responsibility for the contents of this Admission Document. The LEC and the FSC make no representation as to the accuracy or completeness of any of the statements made or opinions expressed in this Admission Document and expressly disclaim any liability whatsoever for any loss arising from or in reliance upon the whole or any part thereof. If you have any doubt as to the action you should take, please consult your banker, licensed investment dealer, legal advisor, accountant or other professional advisor who may advise you accordingly. Any forward-looking statements in this Admission Document are made based upon the Directors expectations and beliefs concerning future events impacting the Company and therefore involve a number of known and unknown risks and uncertainties. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which it will operate, which may prove to be inaccurate. The Company cautions that these forward-looking statements are not guaranteed and actual results could differ materially from those expressed or implied in these forward-looking statements. The statements and information contained in this Admission Document have been compiled as of June 2, Neither the delivery of this Admission Document nor any offer or issue of any Shares shall under any circumstances create an implication or constitute a representation that the information given in this Admission Document is correct as at any time subsequent to the date thereof. Any information on taxation contained in this Admission Document is a summary of certain tax considerations but is not intended to be a complete discussion of all tax considerations. The contents of Page 3 of 36

4 this Admission Document are not to be construed as investment, legal or tax advice. Moreover, investment in the Class B Shares entails a number of risks, a non-exhaustive list of which is described in this Admission Document. Investors should therefore consult their own independent professional advisers on such matters before making an investment. This Admission Document has not been registered under the United States Securities Act of 1933, as amended, or the United States Investment Company Act of 1940, as amended and may not be offered, sold or delivered in the United States of America, or to or for the account of a US Person (as defined hereinafter). Any such investor should consult their professional advisers to determine whether an investment in the Shares could result in adverse consequences to the investor or its related persons and affiliates. All US Persons may have United States tax consequences arising from investing in the Shares. There have been no material adverse change in the financial or trading position of the Issuer. Given the business model of the issuer, working capital requirements are negligible. The directors of NFL are of opinion that the working capital available to NFL is sufficient for NFL s requirements for at least the next twelve months from the date of issue of this Admission Document. The directors, whose names appear in Paragraph 4.2 collectively and individually accept full responsibility for the accuracy or completeness of the information contained in this Admission Document and confirm, having made all reasonable enquiries that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading. The directors further undertake that NFL will increase the number of shareholders to 100 within the following 12 months of the present listing and will ensure that all related parties of the Company agree not to dispose of any interest in its securities at least during the aforementioned period. Junaid Salehmohamed Director Aurélie Park Director Page 4 of 36

5 Table of contents 1. INTERPRETATION AND DEFINITIONS... 7 Interpretation... 7 Definition PRINCIPAL TERMS PERTAINING TO THE OFFER THE SPONSOR Overview of the Sponsor Shareholders of the Sponsor Board of Directors of the Sponsor Track Record of the Sponsor Partnership between 2Futures and AEGIDE THE ISSUER Overview of the Issuer Board of Directors of the Issuer Stated Capital Business Model of the Issuer Interest of NFL in the Real Estate Industry Staffing PROSPECTIVE FINANCIALS Financial Statement Cash Flow Forecast Key Assumptions Loan to Value Outlook Working Capital Dividend Policy Legal and arbitration proceedings INFORMATION PERTAINING TO THE OFFER OF CLASS B SHARES Description of the Class B Shares Issue of Class B Shares further to the private placement Undersubscription No conditions Page 5 of 36

6 Placees Expenses of the Issue RISK FACTORS Risks associated with the Issuer Risks associated with investing in the stock market DOCUMENTS AVAILABLE FOR INSPECTION ISSUER S THIRD PARTY INFORMATION Page 6 of 36

7 1. INTERPRETATION AND DEFINITIONS Interpretation Capitalised terms used herein and not otherwise defined shall have the same meaning as ascribed to them under this Admission Document. Words denoting the singular number shall include the plural number also and vice versa and words importing the masculine gender shall include the feminine gender and vice versa. Definition In this Admission Document, the words in the first column of the following table shall bear the meanings set opposite them respectively in the second column, if not inconsistent with the subject or context. Act The Companies Act Applicable Procedures Bank Debt Business Plan The rules, guidelines and operating procedures of the SEM and/ or CDS, as the case may be. A senior debt facility of c. EUR 26 million, negotiated by the Issuer for the funding of the construction of the Residences. Means the business plan of the Company. Chosen Contractor Class A Shares Class B Shares Constitution Construction Period Directors FSC Issuer Means the contractor to be appointed by the Company for the construction of the Residences. The Chosen Contractor will be appointed following a tender and needs to have demonstrated a proven track-record for projects of comparable scale and size to the Residences. Means a class of share of the Company of no par value denominated in MUR, with rights set out in the Constitution. Means a class of share of the Company of no par value denominated in EUR, with rights set out in the Constitution. Means the constitution of the Company. Two years from start of the construction of the Residences, such date being on or about July Means the directors of the Company. Financial Services Commission. NEW FUTURES LTD. Page 7 of 36

8 Lease Agreement Longstop Date Residences Targeted Investors US Person The agreement to be entered into between the Company and AEGIDE Indian Ocean Ltd (Mauritius) for the purpose of operating and managing the Residences. The Lease Agreement will be signed by the parties thereto on or about June 9, The date by which the Class B Shares shall be allocated to the Participating Shares, such date being 30 th September The development and construction of 135 apartments together with the appropriate number of restaurants and bar/lounge, fitness centre, a spa, a swimming pool, related back of the house service areas and other facilities. Investors eligible to subscribe to the Class B Shares. a) any natural person resident in the United States, including any U.S. resident who is temporarily outside the United States; b) any corporation, partnership, limited liability company or other entity organised or incorporated under the laws of the United States; c) any estate of which any executor or administrator is a U.S. Person; d) any trust of which any trustee is a U.S. Person; e) any agency or branch of a foreign entity located in the United States; f) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; g) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organised, incorporated, or (if an individual) resident, in the United States; and h) any corporation, partnership, limited liability company or other entity if (1) organised or incorporated under the laws of any non-u.s. jurisdiction and (2) formed by a U.S. Person principally for the purpose of investing in securities not registered under the U.S. Securities Act, unless it is organised or incorporated, and owned, by accredited investors (as defined in Rule 501(a) promulgated under the U.S. Securities Act) which are not natural persons, estates or trusts Notwithstanding the foregoing, the following persons do not constitute U.S. Persons for purposes of this Admission Document: Page 8 of 36

9 i) any discretionary account or similar account (other than an estate or trust) held for the benefit or account of a non-u.s. Person by a dealer or other professional fiduciary organised, incorporated, or (if an individual) resident, in the United States; j) any estate of which any professional fiduciary acting as executor or administrator is a U.S. Person if (i) an executor or administrator of the estate which is not a U.S. Person has sole or shared investment discretion with respect to the assets of the estate and (ii) the estate is governed by non-u.s. law; k) any trust of which any professional fiduciary acting as trustee is a U.S. Person shall not be deemed a U.S. Person if a trustee who is not a U.S. Person has sole or shared investment discretion with respect to the trust assets, and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. Person; l) an employee benefit plan established and administered in accordance with the laws of a country other than the United States and customary practices and documentation of such country; m) any agency or branch of a U.S. Person located outside the United States if (i) the agency or branch operates for valid business reasons and (ii) the agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located; and n) the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, and their agencies, affiliates and pension plans, and any other similar international organisations, their agencies, affiliates and pension plans Page 9 of 36

10 2. PRINCIPAL TERMS PERTAINING TO THE OFFER ITEM Nature of instrument Issuer Terms of the issue Status and ranking of the Class B Shares DESCRIPTION Class B Shares with rights as described in Paragraph and the Constitution of the Company. NEW FUTURES LTD 22,500,100 Class B Shares to be issued to the Targeted Investors by way of private placement at a price of EUR 1 each. The Class B Shares shall form part of the share capital of the Company and shall accordingly rank junior to all secured and unsubordinated creditors of the Company. The Class B Shares will be classified as equity under IFRS in the Company s financial statements. The Class B Shares will be fully paid shares. Issue of Class B Shares: By 30 September 2017 Key dates CDS accounts credited: By 6 October 2017 Listing of Class B Shares on the DEM: By 6 October 2017 First day of trading on the DEM: By 6 October 2017 Taxation Governing Law The dividend payable to shareholders is not taxable under the laws of Mauritius. Investors are however advised to consult their tax advisors for a better understanding of the tax implications of their investment in the Class B Shares. Class B Shares are issued under the laws of the Republic of Mauritius. Page 10 of 36

11 3. THE SPONSOR Overview of the Sponsor The Issuer is sponsored by Two Futures Ltd ( 2Futures ). 2Futures is a private company incorporated under the laws of the Republic of Mauritius with business registration number C The registered office of 2Futures is situated at Suite Grand Baie Business Quarter, Chemin Vingt Pieds, Grand Baie, Mauritius. 2Futures is a leading high end real estate development company in Mauritius. The company benefits from an unrivalled track record in the building and selling of high end residential real estate in Mauritius. More explicitly, 2Futures has demonstrated a unique ability to create highend residential, commercial, and mixed used projects. Over the last 8 years, 2Futures has completed 6 developments in the North of Mauritius. 2Futures currently has 3 developments under construction and further developments being marketed. The development value of 2Futures s previous projects has been in excess of USD 400 million. In order to deliver on the Issuer s business plan, 2Futures has formed a strategic partnership with AEGIDE S.A ( AEGIDE ) (please refer to Paragraph 3.5 below). AEGIDE is the leading developer and manager of serviced senior residences in France. Shareholders of the Sponsor The shareholders of 2Futures are predominantly high net worth individuals. Board of Directors of the Sponsor The directors of 2Futures are as follows: Name Biography Residential Address & Nationality Sarwar Joonus Sarwar is the current Managing Director of Galvabond Ltd and Joonas & Co Ltd, a top 100 company involved in steel trading and other building materials in Mauritius. He holds a Bachelor of Economics degree from the University of Buckingham. Rouillard Avenue, Floreal, Curepipe. Nationality: Mauritian Junaid Salehmohamed Garrett Fitzgerald Junaid is Chartered Surveyor with the RICS (UK). He also holds a degree in quantity surveying from the University of Cape Town and a post graduate qualification in Real Estate Investment & Finance from Heriot-Watt University. He was formerly an Associate at MLC Quantity Surveyors and carries a wealth of experience in the financial management of several high profile and successful projects in the retail, upmarket residential and leisure sectors around the island. Garrett holds a Construction Management Diploma. He has strong construction, project Rue des Roses, Coromandel. Nationality : Mauritian Coastal Road, Roches Noires. Nationality: South African Page 11 of 36

12 Track Record of the Sponsor management and development management experience in Africa and Mauritius. Founded in 2007, 2Futures is a leading Grand Baie based real estate development company that has rapidly earned a reputation for being a trendsetter. 2Futures creates high-end residential, commercial, land and mixed-use projects known for originality and attention to detail. Over the last 10 years, 2Furtures has realised 11 developments in the North of Mauritius for a total value of c. USD 445 million. The real estate projects undertaken by 2Futures include inter alia Cape Bay Beach Resort (49 Residential Units delivered in 2010), Grand Baie Business Quarter (Commercial & offices delivered in 2011), AD Residence de Luxe (29 Residential Units delivered in 2015) and Element Bay (43 Residential Units delivered in 2016). Partnership between 2Futures and AEGIDE The Residences will be managed by AEGIDE Indian Ocean Ltd (Mauritius), a wholly-owned subsidiary of AEGIDE. The Issuer is expected to enter into a 20 year long term lease agreement with AEGIDE Indian Ocean Ltd (Mauritius). The key features of the Lease Agreement is as set out in Schedule 2. AEGIDE is, by far, the leading manager and developer of senior serviced residences in France. At the time of writing, AEGIDE is currently managing 60 residences in France and Belgium. At end of 2016, AEGIDE had around 16,000 residents and achieved a blended occupancy rate of 95+% in its stabilised residences (defined as residences operating for more than 3 years). AEGIDE s residences are designed for independent or fragile citizens looking to age in a secure, comfortable and friendly atmosphere. The Mauritian residences will be of high quality. As with every AEGIDE residence, they will be adapted to the needs of seniors with numerous areas of relaxation and a choice of services. AEGIDE s services are offered by its own personnel, who benefit from continuous in house training. The residences are staffed according to their specific needs. The Mauritian residence will have between 60 and 80 employees. Page 12 of 36

13 4. THE ISSUER Overview of the Issuer The Company is a public company limited by shares incorporated under the laws of the Republic of Mauritius on 27 June The registered office of the Company is situated at Suite 109 Chemin Vingt Pieds, Grand-Baie Business Quarter, Grand Baie, Mauritius. The Company has no trading history until the date hereof. The Company s long term business objective is to be a yielding property fund. Upon the listing of the Class B Shares as contemplated in this Admission Document, the Company will be registered as a reporting Issuer with the Financial Services Commission in line with the Securities Act 2005 and the rules made thereunder. Board of Directors of the Issuer The directors have been appointed by 2Futures, currently the sole shareholder of the Company Directors profile Name & Position Junaid Salehmohamed Aurélie Park Biography Please refer to Paragraph 3.3 above for the biography of Junaid. Save for being a director of 2Futures, Junaid holds no directorship in other companies. Education: Master 1- Droit des Affaires (Bac +4) Master 2- Droit de la Distribution et des Contrats d Affaires (Bac +5) Aurélie holds no directorship in other companies Residential Address & Nationality Rue des Roses, Coromandel. Nationality : Mauritian Les Charmoses, Petit-Raffray, Mauritius Nationality: Mauritian Age 30 Years 31 Years Material interest There is no contract or arrangement subsisting at the date of this Admission Document in which a director of the Issuer is materially interested and which is significant in relation to the business of the Sponsor and the Company. Further, none of the Directors or their associates holds any interest in the capital of the Company Conflicts of interest In relation to the Directors of the Company, there are no conflicts of interest, or foreseeable conflicts of interest, between any duties to the Company and their private interests. Page 13 of 36

14 4.2.4 Loans and guarantees to Directors As at date of this Admission Document, the Issuer has not granted any loans and/or guarantees to its Directors Remuneration & Benefits in kind to the Directors Given that the Company was not in operation for the last financial year, no remuneration was paid, and no benefits in kind were granted, to the Directors of the Company (for being directors of the Company). Stated Capital The share capital of the Company is divided into two classes of shares, Class A Shares and Class B Shares The Class A Shares are denominated in MUR and consists of 100 fully paid ordinary shares of no par value. The Class A Shares are not intended to be listed on any securities exchange and are currently entirely held by 2Futures. The Class A Shares have been offered on the following terms: a. The holder of Class A Shares shall have the right to one vote per share at any meeting of the Company on any resolution; b. The holder of Class A Shares shall have no right whatsoever to any dividend; and c. The holder of Class A Shares shall have no right whatsoever to any distribution of surplus assets of the Company The Class B Shares are denominated in EUR and consists of 22,500,100 ordinary shares of no par value. The Class B Shares will be initially issued at EUR 1 each. The terms of issue of the Class B Shares are as follows: Page 14 of 36

15 a) The holder of Class B Shares shall have the right to one vote per share at any meeting of the Company on any resolution; b) The holder of Class B Shares shall have the right to an equal share in dividends authorised by the Board in respect of Class B Shares; and c) The holder of Class B Shares shall have the right to an equal share in the distribution of surplus assets of the Company. Additional information regarding the private placement of the Class B Shares are as specified in Paragraph 6 below. Business Model of the Issuer Yielding Property Fund The Issuer s long term business objective is to be a yielding property fund deriving rental income from the Residences. The activities of the Issuer are also in line with the Government s stated objectives of encouraging and growing the silver economy sector in Mauritius Development of a Senior Serviced Residence To achieve its long term objective, the Issuer has signed a pre-sale agreement for the purchase of five acres sixteen perches of land in Mont Choisy. This said location implies that the Residences will be situated close to the Mont Choisy Le Parc IRS Project and Golf. Mont Choisy beach (50m away) is one of the top four beaches of Mauritius. Within walking distance of the Residences, seniors will find a range of amenities that would be typically required to support their lifestyle (e.g. high quality hospitals and medical care, a dominant regional shopping centre, etc.). The Issuer expects to build a senior home of 135 units on the chosen site. The construction of the Residences will be undertaken by the Chosen Contractor. The construction and pre-opening period of the residence is expected to last for 2 years The Issue of Class B Shares to Targeted Investors As part of its strategy to develop the Residences, NFL wishes to increase its share capital. The Company intends to issue Class B Shares, through a private placement, to Targeted Investors. The Company is of the opinion that the Class B Shares will be fully Page 15 of 36

16 subscribed. This share issue will provide the Company with part of the necessary capital to pursue its development strategy as detailed in this Admission Document. In particular, the proceeds which will be generated by the equity injection further to the private placement of the Class B Shares will be used for the acquisition of the plot of land (as specified in Paragraph above) and, together with the Bank Debt, finance the construction of the Residences. The terms pertaining to the private placement of the Class B Shares is provided in Paragraph 6 below Assets of the Company Following the acquisition of the plot of land and the construction of the Residences, the Company will have an asset base of EUR 48.5m. As collateral for the Bank Debt, security interests will be created on the properties of the Company (inclusive of the Residences) To date, the Company has not registered any trademark, patent or other intellectual or industrial property right which are material in relation to the operation of its business. The Company also does not have any policy with respect to research and development of new products given its business operations Sources of Revenues for the Issuer The Issuer will benefit from rental income associated with leasing of the Residences (the Rental Income ). The Rental Income will be inflation linked. In this respect, the level of inflation may likely affect the Company s prospect. Further, AEGIDE is providing a minimum rental guarantee throughout the duration of the lease. The following diagram is a schematic representation of the business model of NFL: Page 16 of 36

17 Issue of Class B shares (c. EUR22.5m) Bank Debt (c.eur26.0m) AEGIDE S.A (France) NEW FUTURES LTD 100% Ownership AEGIDE Indian Ocean Ltd (Mauritius) Residences Interest of NFL in the Real Estate Industry A market fuelled by strong demand drivers AEGIDE s impressive results are due to two major factors: firstly, the unique know how that it has built over the years due to its experience in the sector; and secondly, a positive market trend. In relation to the later, the ageing population in France provide a strong demand for AEGIDE s product offering. In line with demographic trends in most advanced economies, the number of elderly citizens (65+) in France is projected to rise by 265,000 p.a. until This trend is fueled by (i) the increase in life expectancy, and (ii) retirement of the baby-boomer generation. AEGIDE is well positioned to capture the opportunity presented by the ageing population. As the market leader, it is well aware of these trends and has launched an ambitious expansion campaign to capitalize on the opportunity. The group aims to grow to over 200 residences by Mauritius, a leading premium retirement destination Following extensive market research carried out by AEGIDE, Mauritius was deemed to be an attractive retirement destination for the French market. This is because of a number of reasons ranging from: French being widely spoken, the island enjoying political stability, primary care being available within 3 miles, routine flights to Paris and the strong French historical influence throughout the island. Page 17 of 36

18 4.5.3 Listing of the Class B Shares on the DEM Staffing The Directors of the Company believes that the listing of the Company would not only provide a platform for future capital raising but would also enhance the visibility and awareness of New Futures Ltd as an upcoming player in the real estate industry. Additionally, the listing would allow members of the general public and other investors to participate in the future growth of the Company. No staff is expected to be employed by the Company. All operating activities have been outsourced to specific service providers. Page 18 of 36

19 5. PROSPECTIVE FINANCIALS Financial Statement Financial Performance EUR Minimum Guaranteed Rent - - 2,120,000 2,157,100 2,194,849 Incentive Rent 0% 0% 10% 10% 10% Incentive Rent , , ,485 Total Income - - 2,332,000 2,372,810 2,414,334 Expenses Launch Costs (1,595,533) (1,595,533) Professional Fees (4,810,872) (4,810,872) Auditing - - (20,000) (20,400) (20,808) Accounting - - (10,000) (10,200) (10,404) Others - - (28,000) (28,560) (29,131) Total costs (6,406,405) (6,406,405) (58,000) (59,160) (60,343) EBITDA (6,406,405) (6,406,405) 2,274,000 2,313,650 2,353,991 Depreciation - - (1,111,871) (1,111,871) (1,111,871) EBIT (6,406,405) (6,406,405) 1,162,129 1,201,779 1,242,120 Interest - - (1,223,297) (1,223,297) (1,223,297) PBT (6,406,405) (6,406,405) (61,168) (21,518) 18,823 Tax PAT (6,406,405) (6,406,405) (61,168) (21,518) 18,823 Page 19 of 36

20 Statement of Financial Position EUR ASSETS Non-Current Assets Land 4,919,614 4,919,614 4,919,614 4,919,614 4,919,614 PPE 10,742,900 31,951,952 30,840,081 29,728,210 28,616,339 Total Non-Current Assets 15,662,514 36,871,566 35,759,695 34,647,824 33,535,953 Current Assets Cash at Bank 431, ,050,729 2,141,082 3,271,776 Total Current Assets 431, ,050,729 2,141,082 3,271,776 Total Assets 16,093,621 36,871,592 36,810,424 36,788,906 36,807,729 EQUITY & LIABILITIES Equity Share Capital 22,500,026 22,500,026 22,500,026 22,500,026 22,500,026 Retained loss (6,406,405) (12,812,810) (12,873,978) (12,895,496) (12,876,673) Total Equity 16,093,621 9,687,216 9,626,048 9,604,530 9,623,353 Liabilities Debt - 27,184,376 27,184,376 27,184,376 27,184,376 Total Liabilities - 27,184,376 27,184,376 27,184,376 27,184,376 Total Equity and Liabilities 16,093,621 36,871,592 36,810,424 36,788,906 36,807,729 Cash Flow Forecast The Issuer s cash flow forecasts are shown in the table below. The Issuer s revenues are based on AEGIDE business plan for the residence and have not been audited. Figures taken from the business plan have been accurately reproduced and no facts have been omitted which would render the reproduced information inaccurate or misleading. As a yielding property vehicle, it is expected to have minimal operating expenses. These are expected to be: (i) professional fees (legal, tax, and audit where applicable), (ii) director fees (if applicable), and (iii) an asset management fee. Page 20 of 36

21 EUR Operating cash flows PAT (6,406,405) (6,406,405) (61,168) (21,518) 18,823 Adjustments Depreciation and amortisation - - 1,111,871 1,111,871 1,111,871 Interest on bank loans - - 1,223,297 1,223,297 1,223,297 The Directors hereby confirm that the forecast and/or projections in Paragraphs 5.1 and 5.2 above have been made after due and careful enquiry. The figures have not been audited. Development Budget The development budget as indicated in the table above is for the construction period, i.e. two years from start of the construction of the Residences, such date being on or about July Key Assumptions (a) Revenue (6,406,405) (6,406,405) 2,274,000 2,313,650 2,353,991 Interest paid on bank loans - - (1,223,297) (1,223,297) (1,223,297) Net cash flow generated from operations (6,406,405) (6,406,405) 1,050,703 1,090,353 1,130,694 Investing activities Land acquisitions costs (4,919,614) Plant and equipment (10,742,900) (16,189,802) Furniture and fittings - (3,848,631) Net cash flow from investing activities (15,662,514) (20,038,433) Financing activities Proceeds from bank loans - 26,013, Proceeds from issue of shares 22,500, Net cash flow from financing activities 22,500,026 26,013, Net cash movement for the year 431,107 (431,081) 1,050,703 1,090,353 1,130,694 Opening cash balance - 431, ,050,729 2,141,082 Closing cash balance 431, ,050,729 2,141,082 3,271,776 Description EUR Land Purchase 4,919,614 Construction Costs 23,873,112 FF&E 3,848,631 Launch Costs 3,191,066 Professional Fees 9,621,744 Escalation and Contingencies 3,059,590 Total Project Costs 48,513,757 The Company will benefit from two sources of rental revenues; a minimum guaranteed rent, and an incentive rent based on the tenant s performance. The minimum guaranteed rent has been set at EUR 2.12 Million for the first year. Thereafter, the minimum guaranteed rent is set Page 21 of 36

22 to increase by a minimum of 1.75% p.a. This rental agreement is guaranteed by the tenant s parental company, AEGIDE SA. As its name implies, the incentive rent depends on the performance of the tenant. In particular, 75% of the EBITDA will be paid to the Company. However, due to the uncertainties associated with the tenant s business plan, we have made a conservative assumption that the incentive rent is 10% of the minimum guaranteed rent (i.e. EUR 212,000 for the first year). This figure is based on an occupancy rate of 60%, or an average total daily revenue of EUR 80 per unit. This figure is thought to be conservative in light of the facilities available and the relatively low occupancy rate. (b) Costs As an investment holding company, NFL will have minimal operating costs. The large majority of these are fixed costs associated with professional services. These costs are assumed to increase by 2% p.a. All launch costs and professional fees during the construction period will be expensed and other costs will be capitalised. (c) Land Purchase There is a pre-sale agreement for the land and the land will be purchased following the listing of the Company. (d) Interest rate An interest rate of 4.5% is assumed for the 5 years and interact will be paid as from year The Sponsor is of opinion that these rates are achievable in light of the moderate leverage and the minimum guarantee rent. (e) Capitalised Interest During the first year (2018) interest will be not be paid and will be capitalised. (f) Terms of Repayment The debt will be refinanced at the end of year (g) Depreciation It has been assumed that: Page 22 of 36

23 i. the immovable property would have a useful life of 50 years. The construction costs (excluding the land purchase) are estimated to be EUR 28.1 million. It has been assumed an annual depreciation of EUR 562,066 for the immovable property; and ii. the furniture, fitting and equipment would have a useful life of 7 years. Thus, the costs of the FF&E at EUR 3.8 million give rise to an annual depreciation of EUR 549,804. (h) Investment Property It has been assumed that that the investment property will be valued under the cost model. (i) Tax The forecast of the Company is that there will be no taxes payable during the first 5 Years due to the operating expenses that need to be incurred during the development phase. Loan to Value At the time of writing, the Issuer does not have any debt or contingent liabilities and has not granted any guarantees, mortgages or charges. Post the construction period, the Company is expected to be moderately leveraged at around 52%. Outlook As a yielding property fund, NFL will face competition from other similar listed and non-listed players in the market. NFL s long term objective is to leverage on its expertise and expand its business model in Mauritius, and, at a later stage, Africa. NFL s competitive advantage is that it is operating in a niche segment, i.e. one targeted explicitly towards senior citizens. The challenges of operating a senior homes residence are various, including but restricted to, regulatory, the business model risks (i.e. the willingness and ability of senior citizens to leave their homes and pay for the services of the Residences), and the demand from foreign retirees for the Mauritian product. Working Capital Given the business model of NFL, working capital requirements are negligible. The directors of NFL are of opinion that the working capital available to NFL is sufficient for NFL s requirements for at least the next twelve months from the date of issue of this Admission Document. Page 23 of 36

24 Dividend Policy After the Construction Period, dividends shall be declared usually twice a year, provided that the net income of the Company allows for a meaningful dividend to be paid to Class B Shareholders. Legal and arbitration proceedings The Issuer is not in the presence of any governmental, legal or arbitration proceedings which may have or have had in the past 12 months (with respect to the date of this Admission Document), a significant effect on the Issuer s financial position or profitability and there are no pending governmental, legal or arbitration proceedings which may have a significant effect on the Issuer s financial position or profitability. 6. INFORMATION PERTAINING TO THE OFFER OF CLASS B SHARES Description of the Class B Shares The Class B Shares is a class of shares of the Company denominated in Euro. The shares are of no par value and confer the rights specified in Paragraph The ISIN of the Class B Share will be communicated to the public shortly after the listing. The Class B Shares will be issued in inscribed form and accordingly no share certificate will be issued. The Class B shares have been created under the laws of the Republic of Mauritius. The Class B Shares is not expected to be listed on any other exchange. Issue of Class B Shares further to the private placement As described in Paragraph 4.4.3, the Board has approved the issue and listing of 22,500,100 Class B Shares, to be offered to the Targeted Investors through of a private placement. To provide maximum liquidity, the Class B Shares will be issued at a price per share equal to EUR 1, thereby aggregating to an amount of EUR 22,500,100. The Targeted Investors will be required to subscribe such minimum number of Class B Shares as agreed between the Targeted Investors and the Company. The Issuer expects to raise a total amount of EUR 22,500,100 through the private placement. The Class B Shares will be credited to the CDS Account of the Targeted Investors by the Longstop Date. The first date of trading of the Class B Shares will be as communicated to the Targeted Investors and the public through a communiqué issued to this effect. Page 24 of 36

25 The related parties (as defined in the DEM Rules) of the Company have agreed not to dispose of the Class B Shares for a period of twelve months from the date of admission of the Class B Shares. The Class B Shares will be issued to the Targeted Investors subject to the provisions of the Constitution of the company and will rank pari passu in all respects, including dividends, with any existing issued shares of the same class. The Targeted Investors will be notified of the number of shares issued to them by together with a confirmation note. The Class B Shares are not subject to any conversion or redemption provisions. The basis of allocation of the Class B Shares amongst the Targeted Investors will be determined on an equitable basis by the Directors of the Company. It is intended that notice of the allocations will be announced in due course, and after agreement by the Directors of the Company. CDS accounts of the Targeted Investors shall be credited with the allocated Class B Shares and shall be allocated on the settlement date on a delivery-versus-payment basis. The Targeted Investors have been informed of the time limit to make the payment. The subscription monies should reach the Company by wire transfer. The Company will through a communiqué published in at least two newspapers and/or on the website of 2Futures (www. publish the results of the issue of Class B Shares. Undersubscription In the event that the Issuer raises less than EUR 20,000,000, the Issuer reserves the right to cancel the issue of Class B Shares and refund any application money received to the applicants without interest and net of bank charges. No conditions Save for the satisfaction of capital payment upon being notified (the Call Notice ), the Class B Shares have been issued without any conditions. Placees The Class B Shares are being issued to investment holding companies and/or private equity funds having a strong appetite in the real estate industry either in Mauritius or elsewhere. The current sole shareholder of the Company has waived any rights (right of first offer or pre-emptive rights) to subscribe to the Class B Shares. Page 25 of 36

26 Expenses of the Issue The net proceeds from the issue of the Class B Shares is as follows: 1 Details Amount Proceeds from issue of the Class B EUR 22,500,100 Shares Fees (see Paragraph below) EUR 45,400 Net proceeds EUR 22,454,705 The breakdown of the estimate of fees relating to the listing is as follows: Cost description Amount (MUR) Advisory fees 1,500,000 Legal Fees 150,000 SEM fees 75,000 Total 1,725,000 1 For the sole purposes of this calculation, a reference rate of 1 EUR = MUR 38 will be used. Page 26 of 36

27 7. RISK FACTORS An investment in the Issuer involves a degree of risk. Any investment should be made following a full and independent analysis of the risks involved with the activities of the issuer. Such risks may include, but are not restricted to, general investment risks, legal risk, or tax. A non-exhaustive list of these risks is provided below. Risks associated with the Issuer a. Development During the first two years, the Issuer expects to be involved in the construction of 135 senior apartments. Hence, the Issuer will be exposed to construction risks customarily associated with a real estate project. This includes, but is not restricted to, cost overruns, project redesigns, completion risks amongst others. b. Risks associated with Rental Income Post the construction period, the Issuer is due to receive rental income in furtherance to the Lease Agreement. As rental income is the only revenue available to the Issuer, changes in the industry in which the tenant operate, including inter alia the hospitality and the senior home industry, will likely impact on its capacity to pay the rent. As such, the Issuer s income is exposed to the business model of its tenant. In the unlikely event that the tenant sees a dramatic fall in its revenues, it might not be in a position to make its rental payments. c. Risks associated with a fall in real estate markets Real estate markets are cyclical. A fall in real estate prices in Mauritius (for example, due to adverse economic conditions) will likely impact the value of the real estate owned by the Issuer. As the Issuer s real estate will be used towards collateral for debt, a fall in real estate prices may result in the latter being in breach of its banking covenants. Its share price is also likely to be affected. d. Risks associated with changes in laws or regulations The activity of senior homes could be the subject of regulation. Although AEGIDE s residences comply fully with French standards, the rules and regulations associated with the management of senior homes could change. In turn, this may require that the immovable property be redesigned. Page 27 of 36

28 e. Risks associated with interest rates The Issuer is likely to enter into long-term floating rate debt. A substantial rise in interest rate can have an adverse impact on the Issuer s ability to meet its debt service obligations. f. Risks associated with the capital raising The Issuer is looking to raise both equity (EUR 22.5m) and debt (EUR 26.0m). The total amount of capital being sought is EUR 48.5m. The share issue may not be fully subscribed. In an analogous manner, the debt may not be successfully raised. Should the capital sought not be fully raised, the project could be scaled down or annulled. g. Risks associated with geopolitics The demand driver for the Mauritian residences could be affected by geopolitical stability. Mauritius is currently viewed as being a safe and stable retirement destination (unlike for example countries in the Middle East). h. Competition The supply of senior homes in Mauritius is likely to increase. As such, the Company s revenues may likely fall as a result of the competition. i. Currency risk The Company generates 100% of its revenues in Euros. Any weakening of the EUR against the MUR would have a negative impact on the Company s reported revenues and profitability. However, this risk is mitigated due to the existence of borrowings denominated in Euro. A proportion of its operating costs, predominantly professional fees, will be in MUR.The Company will be exposed to fluctuations in the EUR/MUR exchange rate. j. Liquidity risk The Class B Shares may be difficult to sell. Shareholders subscribing to Class B Shares take the risk of having to sell their shares at below their issue price should they need to dispose of them. k. Capital Risk Depending on general stock market volatility and the performance of the Company, the Class B shares may go up or down in value. l. Other Risk associated with investing in the stock market Page 28 of 36

29 In a similar manner to other listed companies on the stock market, the share price of the Issuer will be subject to the volatility associated with stock market movements. The Issuer s board has no control over stock market movements and dealings which may affect the value of any investment. In fact, it is against the law to influence stock market price fluctuations and movements and subsequently the Board can only mitigate property-side risks to ensure a steady income stream. An investment in the Issuer carries a degree of risk thus the possibility that an Investor could suffer a substantial loss as a consequence of an acquisition of an equity stake in the Issuer. The value of the Class B shares may go up and down based on several factors, including the demand for the general demand and supply for the stock as well as general stock market volatility. m. Investing in the Company may not be suitable for all investors Each potential investor must determine the suitability of the investment in light of his own circumstances. In particular, each potential investor should: a) have sufficient knowledge and experience to make a meaningful evaluation of the investment, the merits and risks of investing in the Company; b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of his particular financial situation, an investment in the Company and the impact such an investment will have on its overall investment portfolio; c) have sufficient financial resources and liquidity to bear all the risks of an investment in the Company; d) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate, currency, and other factors that may affect its investment and its ability to bear the applicable risks. n. Risks associated with forward looking statements The business plan of the Company is based on forward-looking statements. All statements other than statements of historical facts included in this document may constitute forwardlooking statements. Although the Company believes that the expectations and the underlying assumptions reflected in these forward-looking statements are reasonable, there can be no assurance that these expectations or underlying assumptions ultimately will prove to have been correct. Page 29 of 36

30 o. Material Adverse Effects There are certain unforeseen events which, being beyond the control of the Issuer, may have a material impact on the ability of the Issuer to generate adequate revenues. Such events may further result in a significant fall in value of the real estate value owned by the Issuer. Risks associated with investing in the stock market General Investment Risk In a similar manner to other listed companies on the stock market, the share price of the Issuer will be subject to the volatility associated with stock market movements. The Issuer s board has no control over stock market movements and dealings which may affect the value of any investment. In fact, it is against the law to influence stock market price fluctuations and movements and subsequently the Board can only mitigate property-side risks to ensure a steady income stream. An investment in the Issuer carries a degree of risk thus the possibility that an Investor could suffer a substantial loss as a consequence of an acquisition of an equity stake in the Issuer. Page 30 of 36

31 8. DOCUMENTS AVAILABLE FOR INSPECTION The Issuer will make sufficient copies of the Admission Document, Business Plan and Constitution available to the public, free of charge at its registered office to satisfy public demand for 14 days from the date of this Admission Document. Page 31 of 36

32 9. ISSUER S THIRD PARTY INFORMATION Company Secretary Principal Bankers Geneva Management Group (MAU) Ltd 19 th Floor, Newton Tower, Sir William Newton Street, Port Louis The Mauritius Commercial Bank Limited Sir William Newton Street, Port Louis Auditors BDO Mauritius 10 Frère Felix De Valois St, Port Louis Transaction Adviser MCB Capital Markets Sir William Newton Street, Port Louis Registrar MCB Registry & Securities Ltd Sir William Newton Street, Port Louis Page 32 of 36

33 Schedule 1 - Extract of Constitution Term Definition Date of Constitution 26 April 2017 Objects Transfer of Shares The Company has, both within and outside the Republic of Mauritius, full capacity to carry on and/or undertake any business or activities, to do any act or enter into any transaction, and, for those purposes, shall have full rights, powers and privileges. Shares in the Company shall be freely transferable. Save for Shares have been deposited under a system conducted by a central depository and settlement company approved under the Securities (Central Depository, Clearing and Settlement) Act 1996, no fees shall be applicable for the registration of the transfer of any Shares. Pre-emptive rights The Board may issue Shares that rank (as to voting, Distribution or otherwise) equally with or in priority to the existing Shares provided that these Shares shall be first offered to existing Shareholders in accordance with Section 55 of the Act, unless the foregoing pre-emptive right is waived by the existing Shareholders. Variation of Rights Rights of a Class of Shares shall not be varied except if such variation is approved by Special Resolution of that Class of Shares, or by consent in writing of the holders of seventy five per cent (75 %) of the Shares of that Class. A resolution which would have the effect of: (i) diminishing the proportion of the total votes exercisable at a General Meeting by the holders of the existing Shares of a Class; (ii) reducing the proportion of the Dividends or Distributions payable at any time to the holders of the existing Shares of a Class, shall be deemed to be a variation of the rights of that Class. Distribution and Dividend The Board may, if it is satisfied on reasonable grounds that the Company will satisfy the Solvency Test immediately after the Distribution, authorise a Distribution by the Company to Shareholders of any amount and to any Shareholders as it thinks fit. All dividends unclaimed for one year after having been authorized may be invested or otherwise made use of by the Board for the benefit of the Company until claimed, and all dividends unclaimed for five years after having been declared may be forfeited by the Board for the benefit of the Company. The Board may, however, annul any such forfeiture and agree to pay to a claimant who produces evidence of entitlement to the Board s satisfaction the amount of its dividends forfeited unless, in the opinion of the Board, such payment would embarrass the Company. Notice of interest A Director shall, forthwith after becoming aware of the fact that he is interested in a transaction or proposed transaction with the Company, cause to be entered in the Interests Register and where the Company has more than one Director, disclose to the Board of the Company in accordance with the Constitution. Page 33 of 36