JSE and Luxembourg Stock Exchange-listed investment holding group Brait saw its share price slide over 10% (to around R4.o5) in morning trade on Tuesday, following the firm announcing plans for a capital raise of up to R3 billion that would go towards refinancing its debt.
However, the stock ended the day around 9.5% down at R4.10.
The rights offer was revealed together with the group’s interim results for the half-year ended September 30, 2021, which showed a 3% increase in NAV (net asset value) per share to R8.14.
Brait notes that as an investment holding company its key reporting metric is NAV per share.
The group says that it has already “secured commitments of R2.7 billion for a capital raise of up to R3 billion”.
It adds that this will be done “by way of [a] rights offer to shareholders to subscribe for exchangeable bonds to be listed on the JSE, which will be issued by [its] wholly-owned subsidiary Brait Investment Holdings Limited [BIH] and exchangeable into Brait PLC ordinary shares”.
“Net proceeds from the rights offer will be used as a cost-effective refinance for a material portion of the existing bank debt revolving credit facility [BML RCF], improving the liquidity position of the group,” it explains in the Sens statement.
“[The] BML RCF amendment and term extension [is] to June 30, 2024 with a facility limit, post rights offer, of R3 billion [which] provides runway to execute on Brait’s stated strategy,” it adds.
Brait, which counts billionaire Christo Wiese and the Government Employees Pension Fund as its main shareholders, is a major investor in Premier Foods and Virgin Active in South African and the New Look retail chain in the UK, among other companies.