NAIROBI: Africa’s only listed publisher, Longhorn, will begin trading its rights issue on Thursday, giving existing shareholders a chance to buy more shares.
This will see shareholders offered 0.86 shares for every one share held, at a price of Sh4.20. About 126.2 million shares will trade at the Nairobi Securities Exchange (NSE).
The Sh4.20 offer price is a discount of 18 per cent on the market share price of Sh5.12, which was determined by averaging the counter’s six-month volume weighted average price (VWAP) and the closing price as at March 22 this year.
Through the rights issue, the publisher is seeking to raise Sh530 million to retire current debt, as well as grow new business lines and enter new markets.
The company is keen to repay a Sh100 million loan it got from Nabo Capital. The board has set this as a priority in case it only raises half of the target amount.
Product diversification
Working capital and product diversification will each take Sh100 million, while digital content will take Sh50 million. The firm will additionally spend Sh80 million on geographical diversification, and Sh70 million on mergers and acquisitions.
According to Antony Ngugi, who is the lead transactional advisor from Equity Investment Bank, shareholders wishing to exercise their rights will have up to April 29 to do so, after which transactions will be closed.
An announcement on the rights issue’s performance will be made on May 16.
Refunds in respect of applications for additional shares, where the allotted value is less than what was applied for, shall be done from May 30 through electronic fund transfers or a cheque to the authorised selling agent.
Speaking during a stakeholder breakfast meeting to give an update ahead of the issue, Longhorn Publishers Managing Director Simon Ngigi said the issue would offer more than 4,000 shareholders the opportunity to take the company to the next level.
“As we seek to cover the region, it may require us to buy into companies that have entered markets we do not have a presence in yet. This is logical, unlike spending years preparing totally new offerings,” he said.
Currently, Centum Investment Company is the largest shareholder, with about 45.6 million shares, or 31.25 per cent of total shares issued.
Pacific Futures and Options owns 23.94 per cent, while the group chairman, Francis Nyammo (at 10.95 per cent) completes the list of top three shareholders.
Centum has declared that it intends to participate by taking up at least 50 per cent of the total available rights.
