Source: Brainworks to raise $58m for debt-clearance | Herald (Business)
Fradreck Gorwe
Brainworks Limited, a Mauritian diversified investment holding company, listed on the Johannesburg Stock Exchange, with an exclusive focus on Zimbabwe, has advised its shareholders of the intention to raise capital to the tune of R85,8 million ($58,3 million local dollars) by way of a renounceable rights offer as part of the drive to clear third party debts, and in particular a loan fast-approaching its maturity on October 17, 2019.
Its investment portfolio currently offers exposure to prominent Zimbabwe-based assets in hospitality (African Sun), real estate (Dawn Properties), and logistics (FML Oil Company of Zimbabwe.)
Additional to a full announcement released on August 27, 2019 the directors of the company have undertaken the responsibility to further notify shareholders through a short-form announcement of the capitalisation drive: “Shareholders are hereby advised that Brainworks intends to raise up to ZAR 85 799 980,50 by way of a renounceable rights offer (the Rights Offer).
“This short form announcement is only a summary of the information contained in the full announcement released on SENS on Tuesday August 27, 2019” notified the Brainworks directors.
As indicated in the full preceding announcement, the Rights Offer is part of the capital restructuring poised to clear all third party debts;
“The Rights Offer forms part of a broader capital restructuring of the Company to extinguish materially all third- party debt. The capital restructure will involve the conversion of certain loans with existing Shareholders into new Shares at a conversion price of R6,50.
The Rights Offer Shares to be issued will rank pari passu with the existing issued Brainworks Shares.
“The proceeds from the Rights Offer will be used by Brainworks to settle an expensive loan held by the Company. The loan matures on October 17, 2019. The settling of the loan will assist the Company to reduce its level and cost of debt which the board of directors believes will have positive impact on earnings and will position the Company to attract new equity investors,” foretold the preceding announcement.
Salient terms of the Rights Offer entail that shareholders recorded on the share register be offered 13 199 997 ordinary shares at the close of business on Friday September 6, 2019
(Record Date), at an issue price of R 6,50 per Rights Offer share in the ratio of 1 share for every 6,70691 Brainworks ordinary shares held on record date.
Also as a condition of the Rights offer, no excess applications will be accommodated. More so, the offer is unconditional upon any minimum subscription being obtained.
According to the prior full announcement, the R6,50 Rights issue price represent 19 percent discount to the closing price on the JSE on August 26, 2019.
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