NSE-listed publisher to raise Sh500 million in rights issue

Listed publishing house Longhorn Publishers Limited intends to raise up to Sh500 million in a rights issue for expansion.

In order to finance product and regional diversification, Longhorn has proposed the creation of about 600 million new shares subject to regulatory approvals. Shareholders will meet on December 21, 2015 for an Annual General Meeting to give the nod to the rights issue.

The company intends to issue a limited number of the shares created, in the upcoming rights issue with the balance reserved for future expansion.

Longhorn Group Chairman F.T Nyammo, noted that the company was working to position itself right across the continent. “The company continues to grow its footprint in Africa and through our subsidiary offices, we are looking into making inroads to Central, West and the South African markets,” he said.

Longhorn Publishers’ Group MD Simon Ngigi said the rights issue is part of the firm’s strategy to position itself better in the market and thereby become more relevant to its clients and customers. “Besides our current regional footprint in Tanzania, Uganda, Rwanda, Malawi and Zambia, we are actively working to enhance our presence in Ethiopia, South Sudan, Ghana and Zimbabwe,” said Mr Ngigi.

He said up to Sh100 million of the funds raised will be used to enhance Longhorn’s digital offering with a distinct move towards growing the number of titles on offer while developing proprietary e-learning platforms.

Also, the firm intends to use up to Sh200 million towards regional expansion, while another Sh200 million will go towards product diversification.

“The rights Issue will be a major agenda at our Annual General Meeting. The company is working on ascertaining how many of the shares created will be issued in light of the company’s strategic direction,” he added.

The company also intends to create an Employee Share Ownership Scheme (ESOP) to drive employee motivation, with shares being acquired from existing shareholders, or from the market at the then prevailing share price. The ESOP, however, is subject to shareholder approval at the AGM but has board support.

“Our shareholders have committed to being able to put up as much as 5 per cent of the total shares for the ESOP,” said Mr Ngigi.

Since its listing in 2012, on the AIMS segment of the NSE, Longhorn has embarked on various initiatives whose ultimate objective is product enhancement and regional diversification.

To this end, Longhorn has partnered with Bible Society of Kenya, Biblica, Scripture Union of Kenya, Cambridge University Press in the UK, Educat Publishers of Cape Town and BAKITA of Tanzania, in business deals worth over Sh1 billion in the next three years, to publish and distribute Bibles, Hymnals, Charts, Dictionaries and Kamusis in the region.

Longhorn has also partnered successfully with some of the 47 counties in Kenya to run Early Childhood Development Education mentorship programmes and distribution of County Specific Social Studies books.