JSE-listed electronics group Jasco has announced it is moving ahead with a rights offer, first announced last year, as it seeks to raise capital to “stabilise” its balance sheet.
In terms of the rights offer, Jasco will issue 157 million new shares. Shareholders will subscribe for rights offer shares on the basis of 68.52584 shares for every 100 Jasco shares owned.
“The rationale for the company undertaking the rights offer is to raise additional capital to stabilise the group’s balance sheet and to proactively reduce the gearing levels, which, due to the uncertainty created by the Covid-19 pandemic, is considered prudent,” Jasco said in a statement to shareholders on Monday.
The company expects to raise a maximum of R55-million through the rights offer, which will be used to settle a corporate bond of R20-million and further reduce a working capital facility by a minimum of R10-million. The remaining (maximum of) R25-million will be used for “ongoing general working capital requirements”.
These requirements include investments in Jasco’s Communication Solutions and Electrical Manufacturers project roll-outs and related trade creditors in Security & Fire Safety and other operational costs — for example, debt restructuring costs, corporate action costs, and related professional services and consulting fees.
Jasco has already received undertakings by some of its shareholders that they will follow their rights. These shareholders including Community Investment Holdings (CIH) and Harvibase Investments. These two shareholders will subscribe for 25.7 million rights offer shares, which equates to an amount R9-million.
CIH has further agreed to underwrite a maximum of 108 million rights offer shares, amounting to R37.9-million., bringing the total amount for which Jasco has received commitments to R46.9-million.
“The total investment committed by CIH to the rights offer amounts to R45-million, of which R20-million will be set off against the outstanding balance of the Jasco corporate bond, held by CIH for practical reasons. The remaining R25-million will be in the form of a cash subscription,” the company said.
Jasco will publish a circular related to the right offer on its website on Tuesday.
Meanwhile, the company said it will publish a trading statement for the interim results period to end-December 2021 by the end of January. This is prior to the closing of the rights offer on 4 February, and will “provide shareholders with the required guidance” when deciding whether or not to follow their rights. – © 2022 NewsCentral Media