JOHANNESBURG – South Africa’s PPC priced its R4 billion ($281.5 million) rights issue at a 55.5% discount on Wednesday as the cement maker fights for survival in the face of depressed domestic growth.
PPC said it would sell 1 billion shares at R4 each to its shareholders, well below the stock’s closing price of R8.99 on Aug. 19. The shares, which have slipped 42% this year, closed down 3% at R8.73 on Wednesday.
Battered by a weak domestic economy and a credit rating downgrade to junk status, PPC said in May it planned to raise the money to reduce debt levels and fund existing expansion capital expenditure and investment projects.
PPC said the rights offer remained on track for completion during September.
The firm, founded in 1892, will use the net proceeds of the rights offer to repay debt funders for a guarantee extended to PPC bondholders, outstanding amounts advanced by the banks under other finance facilities and to finance existing projects.
($1 = 14.2100 rand) (Reporting by Nqobile Dludla