Investor Relations
GO LIFE PREFERENCE SHARE OFFERING
Go Life is in the process of registering a prospectus related to a private placement offer for subscription of 40 000 000 (forty million) fixed rate redeemable preference shares of no par value at an issue price of 100c per share, at a dividend rate of 12% per annum, payable monthly in arrears.
WHAT IS A PREFERENCE SHARE?
A preference share is an investment vehicle for the experienced investor who wishes to maximise the tax efficiency of his investments and minimise the risk inherent with buying shares in an unlisted company.
Preference shares are a specific form of equity in a company and are unique in that a pre-determined dividend yield is paid to the holder. In the case of Go Life, this will be 12% after Company Tax and Secondary Tax (STC).
These shares are generally regarded as being of a higher rank than ordinary shares, as they hold preferential rights to both capital and dividends. A preference share is therefore regarded as having substantially less risk when compared to the ordinary shares of a company.
Practically speaking the holders of preference shares are repaid their capital prior to any ordinary shareholder, should a company be forced to liquidate. Before a dividend can be declared on the ordinary shares of a company, all dividend obligations of the company to its preference shareholders must first be honoured. The preference shareholder has no voting rights unless preferred share dividend payments fall into arrears.
Preference shares are released often to reduce the after-tax cost of funding for a company, particularly when such funding is not used in the production of taxable income. The Go Life preference share capital will be used to increase brand awareness and for possible acquisitions.
THREE FORMS OF PREFERENCE SHARES
There are three forms of preference shares available to investors, namely redeemable-, convertible- and listed preference shares.
The Go Life preference share is a redeemable preference share that offers the investor capital guarantees of 12% annual dividend yield (paid to investors monthly) over a finite maturity date of three years, whereupon the investor is regulated by a defined exit mechanism and his capital is returned.
Redeemable shares differ considerably from convertible preference shares, which can be converted to ordinary shares at a future point in time, and listed preference shares that are listed on the JSE.
The third form of preference shares, listed preference shares, are sold at a price determined by the market and the issuer offers no undertaking to repay the capital, hence they are commonly known as non-redeemable. The investor’s ability to exit from such an investment is limited – he/she must sell it in the open market to a third party and would be vulnerable to market fluctuations.
THE BENEFITS OF INVESTING IN GO LIFE PREFERENCE SHARES
The benefits of investing in Go Life preference shares are considerable:
• They offer an attractive after tax yield on a monthly basis while remaining relatively low risk.
• Any investor who seeks the returns that shares in a company hold, would be advised to look at preference shares as favourable option during a time when listed shares have had very mixed fortunes and the global recession is shaking the world markets.
• Go Life undertakes to (where possible), assist shareholders who wish to redeem their capital prior to the full three-year term, and if given a three-month notice period, will endeavour to recover the capital investment to the shareholder who does not wish to complete his term.
• There is a new tax on dividends that has been announced and should come into effect in late 2009. The Go Life preference share agreement has a “"change in law clause" that is there to protect the interests of the holder and the issuer against unforeseen changes to the tax regime. Many experts hold that the expected changes will not have a negative outcome on either the holder or the issuer.
• The intention of the Go Life preference share offering is to provide a select group of investors with an above-average after-tax return in the form of a dividend of 12% paid monthly in arrears for a fixed period of three years. The dividend is attractive and includes all sundry administration fees.
• Go Life has the enviable position of having a range of products that has already proven itself in the market place under the well-established Gotha brand, which it has grown from infancy. The Gotha brand has never shown a loss since it was established in 2005 and has rapidly grown to a multi-million rand business in its established LSM 1-5 market in the Eastern Cape. The Go Life brand was launched expressly to take these products and establish a footprint for the products of Gotha around the whole of South Africa and to penetrate the LSM 5-11 market under a more upmarket brand.
WHAT WILL THE FUNDS RAISED THROUGH THIS OFFERING BE UTILISED FOR?
• The funds raised through this preference share offering will be utilised for increasing brand awareness and ensuring the successful sales of products through national retailers, as well as to support agency outlets. The products are already listed with Pick ‘n Pay and Shoprite/Checkers.
• The Go Life product range is outstanding and has already changed the lives of thousands of people across South Africa, and management are raising this money to fulfil the dream of seeing these products introduced into every home in South Africa, and then to export these products to new markets.
WANT TO KNOW MORE?
Should you wish to know more about investing in Go Life Preference Shares, please fill in and submit the template below.
Once a prospectus is registered it can also be downloaded from the Go Life website, www.golife.co.za in PDF format, or it can be posted to you should you require a hard copy.
NOTICE
Please note that the above is an extract of a Private Placement Memorandum related to the launch of preference shares in Go Life Health Products (Ltd) (hereinafter referred to as Go Life) and is restricted to the person or entity to whom it is addressed and is not for public distribution, nor is it an offer to the general public to participate in the share capital of the company. Should any person or entity, other than those to whom the Private Placement Memorandum related to the launch of preference shares in Go Life is addressed, wish to acquire preference shares in Go Life, such person or entity will be subject to the normal prescriptions applicable under the Companies Act, Act 61 of 1973.
