Finweek English Edition - - INVESTMENT -

An­other stormy set of num­bers from Curro as HEPS for the year end­ing De­cem­ber 2013 in­creased by 83% and learn­ers were up 69%. How­ever, the real is­sue was an­other rights is­sue at R20 per share rais­ing R589m. The logic here is sim­ple and we saw it with an­other PSG com­pany – when Capitec* did a se­ries of rights is­sues. The point is that the Curro share is ex­pen­sive whichever way you fold it, so man­age­ment is tak­ing the view that this is a cheap way to raise money and it is right. If the share was half the cur­rent price − and this would still be ex­pen­sive − man­age­ment would ei­ther have to halve the amount be­ing raised or dou­ble the num­ber of shares be­ing is­sued. This would mean doubling the di­lu­tion for the same amount of money from the is­sue, but when the shares are ex­pen­sive it makes for a cheap and easy way to raise money.

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