Troubled consumer electronics group Ellies Holdings has announced plans for a rights offer, seeking to raise R120-million from investors to complete two acquisitions aimed at transforming its business.
In February, Ellies announced plans to buy Magetz Electrical and Power on Wheels (together, Bundu Power) for an initial payment of R72.6-million, with the balance of R130-million due over three earn-out periods.
“To fund the initial payment, together with the earn-out for the 2023 financial year, the board of directors of Ellies has resolved to undertake a fully underwritten renounceable rights offer in the amount of R120-million through the issue of new Ellies shares at an issue price of 7c/share,” it said.
Ellies shares were last changing hands at 11c apiece. The shares have lost about half their value in the past year.
Mazi Assets Management and Imvula Education Empowerment Trust have agreed to underwrite the proposed rights offer on an equal basis, in consideration for an underwriting fee of 1.5% of the value of new Ellies shares, if any, subscribed for by each underwriter.
Shareholders must still approve an increase in Ellies authorised share capital, among other pre-conditions, prior to the implementation of the rights offer. – © 2023 NewsCentral Media