Brait slides over 10% on news of R3bn rights offer

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.

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.

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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.

* This is a developing story