Advtech R850m share offer now discounted
ADVTECH, the South African education company that spurned a takeover bid from Curro Holdings earlier this year, said it was offering a 10 percent discount on its R850 million share offer. The money will be used to cut its current debt and buy more schools and tertiary institutions.
The share offer, first announced in September, had yet to have confirmation of registration from the Companies and Intellectual Property Commission, Johannesburgbased Advtech said yesterday. The company sees debt increasing about 12 percent to R1.9 billion because of “Advtech’s standard working-capital cycle and seasonal cash variations”. Some of the money raised would be used to pay down the debt, the company said.
Advtech is offering 75.5 mil- lion new shares at R11.25 per share, which is a 10 percent discount to the 30-day volumeweighted average price at the close on October 21. Advtech wants to raise money to acquire assets and reduce and restructure debt. It fought off an offer of R13 a share from Curro in July to continue pursuing its own growth strategy.
“We no longer have surplus cash and we have extended borrowings, but we’re still experiencing exciting growth opportunities both inside and outside South Africa,” said Frank Thompson, the chief executive of Advtech.
“In the short term the rights offer will reduce debt and enable us to access and finance new growth opportunities. We have a debt funding programme the agreed with Barclays Africa.”
The last day to trade in Advtech’s ordinary shares to participate in the rights offer is November 13, with the sale opening on November 23 and closing on December 4. Advtech was up 1.96 percent to R13 in Johannesburg yesterday.
“We envisage that we will need additional capital and additional borrowing capabilities,” Thompson said.
The company had identified “near-term organic and acquisitive-led investment opportunities” totalling almost R1bn, in addition to projects already approved by the board, Advtech said. – Bloomberg