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Report Date : |
29.10.2014 |
IDENTIFICATION DETAILS
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Name : |
EDGARS CONSOLIDATED STORES LIMITED |
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Formerly Known As : |
EDCON (PTY) LTD |
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Registered Office : |
Edgardale, 1 Press Avenue, Crown Mines, Johannesburg, Gauteng |
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Country : |
South Africa |
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Date of Incorporation : |
05.02.2007 |
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Com. Reg. No.: |
2007/003525/06 |
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Legal Form : |
Private Company |
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Line of Business : |
Retailers of clothing, footwear, handbags, perfumes, accessories, home
textiles, stationery, books and magazines |
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No. of Employees : |
±20 000 |
RATING & COMMENTS
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MIRA’s Rating : |
C |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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Status : |
Under Process of Deregistration |
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Payment Behaviour : |
-- |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 1, 2014
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Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
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South Africa |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
SOUTH AFRICA - ECONOMIC OVERVIEW
South Africa is a
middle-income, emerging market with an abundant supply of natural resources;
well-developed financial, legal, communications, energy, and transport sectors
and a stock exchange that is the 16th largest in the world. Even though the
country's modern infrastructure supports a relatively efficient distribution of
goods to major urban centers throughout the region, unstable electricity
supplies retard growth. The global financial crisis reduced commodity prices
and world demand. GDP fell nearly 2% in 2009 but has recovered since then,
albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty,
and inequality - among the highest in the world - remain a challenge. Official
unemployment is at nearly 25% of the work force, and runs significantly higher
among black youth. Eskom, the state-run power company, has built two new power
stations and installed new power demand management programs to improve power
grid reliability. Construction delays at two additional plants, however, mean
South Africa is operating on a razor thin margin; economists judge that growth
cannot exceed 3% until those plants come on line. South Africa's economic
policy has focused on controlling inflation, however, the country has had
significant budget deficits that restrict its ability to deal with pressing
economic problems. The current government faces growing pressure from special
interest groups to use state-owned enterprises to deliver basic services to
low-income areas and to increase job growth
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Source
: CIA |
EDGARS CONSOLIDATED
STORES LIMITED
Edgardale 1 Press
Ave
CROWN MINES
Johannesburg
Gauteng
P O Box 100 / 200
CROWN MINES
2025
TELEPHONE
NUMBER: (011)
495-6000 / 839-4056
FAX NUMBER: (011)
837-5019
On investigation
contact was made with Tandeka Sibanda, Assistant Company Secretary, who stated
that the subject is a dormant investment holding company which is in the
process of deregistration, expected to be completed in late 2014 or early
2015. It was stated that the active
trading company is EDCON LTD and the subject was previously the 100% immediate
holding company but the immediate holding company once the subject is
deregistered will be EDCON ACQUISITION (PTY) LTD.
EDCON LTD
(quoted on the Bonds Listings of JSE LTD)
Formerly: EDCON (PTY) LTD the
subject having converted to a Limited company on 14 February 2013
Formerly: ELEPHANT RETAILCO (PTY) LTD, the name having changed on 9 May
2007
Formerly: MAIN STREET 547 (PTY) LTD, the name having changed on 24 April
2007
EDGARS
C N A
BOARDMANS
RED SQUARE
DISCOUNT DIVISIONS:
JET STORES
JET MART
LEGIT
MONO-BRANDED OUTLETS:
TOPSHOT TOPMAN
TOM TAILOR
DUNE LONDON
T.M. LEWIN
LIPSY
LUCKY BRAND
MAC
TEMPTATIONS
PRADO
EDGARS ACTIVE
As per our client’s request, it was confirmed that CNA is a trading division of EDCON LIMITED.
It was stated that the MONO-BRANDED divisions are all in house stores throughout selected EDGARS outlets.
It was stated that the previous division of the subject CUTHBERTS was merged with JET STORES and that name is no longer utilised. Similarly, BLACKSNOW was merged with JET STORES and that name is no longer used.
Edgardale
1 Press Avenue
CROWN MINES
Johannesburg
Gauteng
P O Box 100
CROWN MINES
2025
TELEPHONE NUMBER: +27 11 495 6000
FAX NUMBER: +27 11 837 5019
It was stated that
EDGARS CONSOLIDATED STORES LIMITED is a dormant holding company which is in the
process of being deregistered, expected to be effective late 2014 or early
2015. At that point the shareholding of
the subject is expected to be 100% EDCON ACQUISITION (PTY) LTD.
100% EDGARS CONSOLIDATED STORES LIMITED formerly: EDGARS STORES LTD (investment holding company) (Registration Certificate Number: 1946/022751/06) which in turn is 100% owned by EDCON ACQUISITION (PTY) LTD (Registration
Certificate Number: 2007/000518/07), which in turn is 100% owned by EDCON
HOLDINGS LIMITED (Registration Certificate Number: 2006/036903/06), which is
held 85% by EDCON (BC) SARL in Luxemburg, and the remaining 15% is held by 8
trusts, including a BEE staff empowerment trust.
EDCON (BC) SARL is
in turn 100% owned by EDGARS HOLDINGS LTD registered in the Cayman Islands and
is in turn owned 86.3% by BAIN CAPITAL INTEGRAL INVESTORS II L P, 12.98% by
BARCLAYS CAPITAL and 0.72% by other investors.
It was established
that a scheme of arrangement in 2007 led to the delisting of EDGARS
CONSOLIDATED STORES LTD (formerly:
EDGARS STORES LTD) when the subject took over the operation and assets
of the latter company after a Private Equity buyout of the company involving
ultimately BAIN CAPITAL of the USA.
CELROSE (PTY) LTD (49% Subsidiary)
EDGARS STORES LIMITED, Zimbabwe (Subsidiary
via Bellfield Ltd) (39.08%)
It was stated that EDCON LTD has 100% shares
in the following subsidiary companies.
BELLFIELD LIMITED UK (Investment holding company)
JET SUPERMARKETS (BOTSWANA) (PTY) LTD
EDGARS STORES LESOTHO (PTY) LTD
EDGARS STORES (NAMIBIA) LIMITED
EDGARS STORES SWAZILAND LIMITED
NATIONAL SECURITY CORPORATION (PTY) LTD
R22 PROPERTIES (PTY) LTD (dormant)
RAPID DAWN 132 (PTY) LTD (dormant)
EDCON RETAIL ACADEMY (PTY)
LTD
(Registration
Certificate Number: 2008/019063/07)
continued
EDCON FINCO (PTY) LTD
(Registration Certificate Number: 2007/003444/07)
CENTRAL NEWS AGENCY (PTY) LTD Swaziland (dormant and in the process of deregistration)
UNITED RETAIL LTD S A (dormant)
TOPICS (PTY) LTD (dormant)
SECUREX SECURITY SERVICES (PTY) LTD
EDCON LIMITADA Mozambique
JETCON MART LTD Ghana (which company will start trading in October 2014)
JETCON SUPERMARKET NIGERIA (PTY) LTD (which company will start trading in 2015)
EDCON KENYA (PTY) LTD (which company is not operating at present)
A number of Asian registered companies which were not named, however, it was stated that certain of these had been registered to do the sourcing for the group companies.
The company is also reported to be involved in partnerships and has 50.1% in the following partnerships:
QUINMATRO RETAIL (PTY)
COSYOR RETAIL (PTY) LTD
ROSYCO RETAIL (PTY) LTD
J SHREIBER (Group CEO & M/D) (German) D.O.B. 1962/02/07
T CLERCKX CFO (Belgium) D.O.B. 1973/18/07
Dr U FERNDALE ID No. 6501035147082
FIRST NATIONAL BANK, Johannesburg Branch is the main bank for the
subject where they have substantial facilities available.
5 February 2007
Registration Certificate Number: 2007/003525/06
A dormant company was utilised and the name changed to EDCON (PTY) LTD to take over the assets and operations formerly trading under the company, EDGARS CONSOLIDATED STORES LIMITED, (formerly EDGARS STORES LIMITED) the previous operating company in the group which originally commenced operations in 1929 and which is now the holding company of the subject. The subject then converted to a public limited company in 2013.
4460236773
9388966153
It was stated the subject is in the process of updating their BEE
status, however, the subject was previously a level 4 contributor
Certified by: EVS (Express Verification
Services a member of the Empowerdex Group)
Certificate Expiry Date: 13
August 2014
Certificate number: G2013J0057
Retailers of clothing, footwear, handbags, perfumes, accessories, home
textiles, stationery, books and magazines
It was stated that the Asian companies that have been registered by the
group are mainly for sourcing goods overseas for the group. The respondent at the company was not able to
supply trade references on the subject and in view of the standing of the
company it was deemed not necessary.
The general public on a cash basis.
Although the subject has store credit cards, the subject’s book was sold
to ABSA Bank in 2012 and they carry all the debt for the subject and therefore
the subject only deals on a cash basis.
South Africa
African countries i.e. Namibia, Swaziland, Zimbabwe, Ghana, Kenya,
Botswana, Nigeria etc.
±20 000
Approximately 1 300 stores throughout South Africa which are made
up as follows:
(CNA – 195 stores, JET – 347 stores, JET MART – 123 stores, LEGIT – 186
stores, EDGARS – 186 stores, RED SQUARE – 39 stores, BOARDMANS – 34 stores,
EDGARS ACTIVE – 137 stores)
The majority of the subject’s premises are reported to be leased.
R1 000 divided into 1 000 ordinary shares of
R1 each
R894
For
financial information on the subject, please see unaudited quarterly and
company financial statements for the period ending 28 June 2014.
DELOITTE AND TOUCHE
MARCH
AON INSURANCE BROKERS
NOT AVAILABLE
It was stated in a previous report dated 8 May 2014 that there is a
judgement recorded on 6 February 2014 for an amount of R253 862.06 for
services rendered (Judgement Default by ELECTROTAG (PTY) LTD), Case No.
31878. Contact was made with Phuti in
the legal department, who stated that, to his knowledge, a payment of
R68 000 has been paid and the matter has been settled. He stated that he would investigate the
matter but to the best of his knowledge, the subject has lodged an appeal.
This is a very well-established well-connected
company that has taken over well-established operations from a previous
well-connected company. The subject is
ultimately owned by BAIN CAPITAL of USA, a large financial institution in the
USA that took over the group in 2007.
Since the takeover, however, the worldwide recession has had a major
detrimental effect on the group as the business model is that of extending
credit to its customers rather than encouraging cash sales. The group figures unaudited for 2014 reflect
a negative current ratio, negative equity and substantial losses have been
sustained over the past few years.
Although it is highly unlikely that BAIN CAPITAL would allow the group
to fail, the subject is considered equal to its normal business engagements,
secured by the ultimate holding company.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.61.35 |
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|
1 |
Rs.98.93 |
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Euro |
1 |
Rs.77.92 |
INFORMATION DETAILS
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Analysis Done by
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SUB |
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Report Prepared
by : |
PDT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit
risk exists. Caution needed to be exercised |
Credit not recommended |
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-- |
NB |
New Business |
-- |
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This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major sections
of this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.