Retail Cube Prospectus - RCG Corporation

to enable Retail Cube to obtain
finance to fund working capital and
future acquisitions as required;
to establish the Company’s infrastructure as
the holding company of the Groups; and
to place the Company in a position to
acquire new retailing businesses of a similar
size and with similar characteristics to the
Groups should the opportunity arise.
The Directors believe that, on the
successful closing of this Offer, Retail Cube
will have enough working capital to carry out
its objectives stated in this Prospectus.
2.6 Use of proceeds of offer
Description $’000s
Purchase of Equityholder’s equity 1
Retirement of net debt 2
Prospectus and issue costs 3
14,020
3,980
1,750
Costs incidental to acquisition 4 250
Working capital 500
Total proceeds from the Offer $20,500,000
Notes
1. Net cash consideration for the purchase of Equityholder’s equity is
$15,886,000. Of this, $1,866,000 relates to the value of the
St Mary’s Property on which the Amazing Paints manufacturing
facility is located. This component of the cash consideration is
to be funded out of the Company’s debt facility. (Refer Section
10.1.1 for further details on the purchase consideration).
2. The total value of debt being retired amounts to $5.98m. Of
this, $3.98m will be retired out of the proceeds from the Offer.
The balance of $2.0m will be retired directly by the Amazing
Paints Equityholders in consideration for certain assets of
the Group (including loans to Equityholders) being acquired
from Retail Cube by the Amazing Paints Equityholders.
3. It is anticipated that costs associated with the issue of this
Prospectus, the conduct of the Offer and the acquisition
of the Groups will total approximately $2,750,000. An
amount totalling $1,000,000 of this cost will not be settled
out of the monies raised from this Offer and is payable at
the Company’s discretion any time within two years and six
months of the Listing Date (see Section 9.10 for details).
4. Costs incidental to acquisition include amongst other
things, the costs associated with the deemed assignment
of The Athlete’s Foot’s licence agreements (see Section
10.1.4), valuation, evaluation and consulting fees.
2.7 Financing Facility
Westpac Banking Corporation has offered the
Company a debt facility of $19.3m. The facility
will be drawn on once conditions precedent to
the facility (as prescribed by Westpac) have
been satisfied and will be applied as follows:
$1,866,000 will be used to finance part
of the cash consideration payable to the
Equityholders of Amazing Paints and ascribed
to the value of Robertson’s paint factory.
Approximately $600,000 will be used to provide
replacement bank guarantees to the landlords
of the retail stores of the three Groups.
The balance of the facility will be used to finance
future acquisitions and ongoing expansion of
the business operations of the three Groups.
2.8 Offer not underwritten
The Offer is not underwritten.
2.9 Consequences of
under subscription
If Retail Cube does not receive the full amount of
the Offer ($20.5 million) by the Closing Date, all
Applications will be refunded in full without interest.
If a condition precedent in one or more of
the Share Purchase Agreements is not satisfied
or waived and Completion does not occur, even
if the Offer has been closed fully subscribed, all
Applications will be refunded in full without interest.
2.10 Financial information
Forward looking statements (including forecasts)
This Prospectus contains certain statements
which relate to the future, including forward
looking statements related to Retail Cube’s
financial performance and strategy. These forward
looking statements are not guarantees of future
performance. They involve known and unknown
risks, uncertainties, assumptions and other
important factors, many of which are beyond
the control of Retail Cube (and the Directors of
Retail Cube). These factors include, but are not
limited to, general economic conditions, exchange
rates, interest rates, the regulatory environment
and structural changes in the retail industry.
Neither Retail Cube nor any other person gives any
representation, assurance or guarantee that the
results, performance or achievements expressed
in, or implied by, the forward looking statements
contained or incorporated by reference in this
Prospectus (including the statements regarding
those factors outlined above) will actually
occur. You are cautioned not to place undue
reliance on the forward looking statements
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