Finweek English Edition - - SIMON SAYS -

El­lies has an­nounced de­tails of a cap­i­tal­rais­ing ex­er­cise, which is in part helped by the share-price spike after the HCI fall­out in that is­su­ing new shares at 110c isn’t so bad com­pared to the 90c-odd level I would have ex­pected. But the higher price en­abled the board to move quickly and get a bet­ter deal that sees t wo direc­tors show­ing con­fi­dence by com­mit­ting loans to the value of R45m while another R120m will be raised by is­sue of shares for cash and a rights is­sue. The other, less char­i­ta­ble view is that the direc­tors are sav­ing the company from col­laps­ing – such is the cri­sis at El­lies. Time will tell, but the big­ger is­sue is that I do not think R165m is enough for El­lies – I ex­pected an amount of about t wice that. So ei­ther I am wrong, or there is another cap­i­tal rais­ing due within a year. Or per­haps the spun-off Me­ga­tron will have to do a cap­i­tal rais­ing once it lands on the JSE. Bot­tom line, things are still very tough for El­lies and I still ad­vise stay­ing away from the stock.

Kevin Hed­der­wick

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.