Cinema City International NV
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Cinema City International N.V. (a limited liability company (naamloze vennootschap) incorporated under the laws of the Netherlands, with its corporate seat in Amsterdam) Offering of 15,664,352 Shares with a nominal value of i0.01 per Share A3.4.1 Based on this document (the “Prospectus”), 15,664,352 ordinary shares in Cinema City International N.V. (“Cinema City” or A3.5.1.2 the “Issuer”), a limited liability company (naamloze vennootschap) incorporated under the laws of the Netherlands, with its A3.4.2 corporate seat in Amsterdam, are offered, of which 10,000,000 newly issued ordinary shares (the “New Shares”) are offered for subscription by the Issuer and 5,664,352 existing ordinary shares (the “Sale Shares” and together with New Shares, the “Firm A1.5.1.1 Shares”) are offered for sale by (i) Israel Theatres Limited (the “Affiliated Shareholder”), the parent company of I.T. International A1.5.1.4 Theatres Limited, the Issuer’s majority shareholder (the “Principal Shareholder”), and (ii) a senior member of management and an affiliated person (together with the Affiliated Shareholder, the “Selling Shareholders”). The Issuer will receive the net proceeds from the sale of the New Shares. The Selling Shareholders will receive the net proceeds from the sale of the Sale Shares. The Offer Shares (as defined below) offered in this offering (the “Offering”) constitute a minority interest in the Issuer. The Offering consists of a public offering in Poland and an international offering by way of a private placement to certain institutional investors outside of Poland. The Offer Shares have not been and will not be registered under the United States Securities Act of 1933, as A3.6.3 amended (the “US Securities Act”), or with any securities regulatory authority of any state or any jurisdiction in the United States. A3.5.1.9 The Offer Shares are being offered only outside the United States in accordance with Regulation S of the US Securities Act (“Regulation S”) and may not be offered or sold within the United States or to, or for the account or benefit of, US persons (as defined in Regulation S) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. See: “Selling Restrictions”. The Firm Shares are being offered, as specified in this Prospectus, subject to cancellation or modification of such Offering and subject to certain other conditions. The Prospectus constitutes a prospectus in the form of a single document within the meaning of Article 3 of the Directive 2003/71/EC of the European Parliament and of the Council of the European Union (the “Prospectus Directive”) and has been prepared in accordance with Article 3 of the Dutch Securities Act 1995 (Wet toezicht effectenverkeer 1995, the “Dutch Securities Act”). This Prospectus has been filed with, and was approved on 17 November 2006 by, the Netherlands Authority for the Financial Markets (the “AFM”), which is the Dutch competent authority for the purpose of the relevant implementing measures of the Prospectus Directive in the Netherlands. The Issuer will be authorised to carry out the Offering to the public in Poland once the Polish Financial Supervisory Commission (the “FSC”), which is the Polish competent authority for the purposes of the relevant implementing measures of the Prospectus Directive in Poland, has informed the Issuer that the AFM provided the FSC with a certificate of approval of this Prospectus, which is equivalent with authorising the Offering to the public in Poland. See: “Risk Factors” for a description of factors to be taken into account when considering whether to invest in the Offer Shares. Prior to the Offering there was no public market for the shares of the Issuer. Application will be made based on this A3.5.1.3 Prospectus to admit and list all of the Issuer’s shares (“Shares”) authorised and issued as at the Settlement Date (as defined A3.5.3.1 below), including the Firm Shares and the Overallotment Shares (as defined below), plus 930,000 Shares that have been A3.5.3.2 authorised and that may be issued from time to time under the Company’s employee stock incentive plan, to trading on the A3.6.1 Warsaw Stock Exchange (the “WSE”) (the “Admission”). The date on which trading of the Firm Shares on the WSE will A3.6.2 commence is expected to be on or about 8 December 2006 (the “Listing Date”). Delivery of the Firm Shares to investors’ securities accounts is expected to be made on or about 7 December 2006 (the “Settlement Date”). Prospective retail investors in Poland A3.4.7 (other than “U.S. persons” as defined in Regulation S under the US Securities Act) may subscribe for the Firm Shares during a period which is expected to commence on or about 24 November 2006 and is expected to end on or about 30 November 2006, whereas selected prospective institutional investors in Poland (other than “U.S. persons” as defined in Regulation S under the US Securities Act) may subscribe for the Firm Shares during a period that is expected to commence on or about 1 December 2006 and is expected to end on or about 4 December 2006. The Maximum Price per Offer Share will be determined by the Issuer and the Affiliated Shareholder, with the agreement of the Lead Manager (as defined below) on or about 23 November 2006, based on (i) an assessment of the current and anticipated situation of the Polish and international capital markets, and (ii) an assessment of the growth prospects, risk factors and other information relating to the Company’s activities. The offer price per Offer Share (the “Offer Price”) and the final number of the Offer Shares will be determined jointly by the Issuer and the Affiliated Shareholder, with the agreement of Bank Austria Creditanstalt AG (“CA IB” or the “Lead Manager” and, together with ING Bank N.V., the “Managers”) on or about 30 November 2006 (the “Pricing Date”) and will be announced in a press release soon thereafter and in the same manner as this Prospectus. The Offer Price will be determined based on the following criteria and rules: (i) size and price A3.5.4.1 sensitivity of demand from the Institutional Investors as gauged during the book-building process, (ii) the current and anticipated A3.5.4.2 situation on the Polish and international capital markets and (iii) assessment of the growth prospects, risk factors and other A3.5.4.3 information relating to the Company’s activities contained in this Prospectus. If the Offering is cancelled or postponed prior to final allotments of the Firm Shares to investors on or about 4 December 2006 (the “Allotment Date”), all subscriptions for the Firm Shares will be disregarded and any subscription payments made will be returned without interest or other compensation. All dealings in the Firm Shares prior to settlement and delivery are at the sole risk of the parties concerned. In addition, the Principal Shareholder has granted to the Managers an option exercisable for up to 30 days following the Allotment Date to purchase up to an additional 2,349,652 Shares (the “Overallotment Shares” and together with the Firm Shares, the “Offer Shares”), the maximum number of which is equal to 15% of the number of Firm Shares being offered in the Offering, solely to cover overallotments, if any, made in connection with the Offering and short positions resulting from stabilisation transactions. Such stabilisation shall be conducted in accordance with the rules set out in the European Commission Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council of the European Union as regards exemptions for buy-back programmes and stabilisation of financial instruments. Offer Price: To be determined in PLN A3.4.4 Maximum Price: To be determined in PLN and announced on or about 23 November 2006 A3.5.3.1 CA IB Securities S.A. will act as Offeror (the “Offeror”) for the offering and listing of the Shares on the WSE. Global Coordinator, Bookrunner and Lead Manager Co-Lead Manager The date of this Prospectus is 17 November 2006. TABLE OF CONTENTS IMPORTANT INFORMATION ....................................................... ii SUMMARY ..................................................................... 1 SUMMARY FINANCIAL AND OPERATING DATA ...................................... 8 RISK FACTORS.................................................................. 10 EXCHANGE RATE INFORMATION .................................................. 18 USE OF PROCEEDS .............................................................. 20 DIVIDEND POLICY . ............................................................. 21 PRINCIPAL AND SELLING SHAREHOLDERS ......................................... 22 CAPITALISATION AND INDEBTEDNESS ............................................. 23 SELECTED FINANCIAL INFORMATION .............................................. 24 OPERATING AND FINANCIAL REVIEW . ........................................... 26 DESCRIPTION OF THE COMPANY .................................................. 40 INFORMATION ON THE INDUSTRY AND MARKETS ................................... 61 DIRECTORS AND EMPLOYEES .................................................... 67 RELATED PARTY TRANSACTIONS ................................................. 75 DESCRIPTION OF THE SHARES AND CORPORATE RIGHTS AND OBLIGATIONS ............ 76 SELLING RESTRICTIONS ......................................................... 90 THE WARSAW STOCK EXCHANGE ................................................. 92 CERTAIN TAX CONSIDERATIONS