DURBAN – Ethos Capital intends to raise R750million through a renounceable rights offer of 100 million Ethos Capital A ordinary shares at a price of R7.50 per rights offer share to assist Ethos Capital in fully funding its commitment to invest in Brait’s proposed equity capital raise.
In November last year, Ethos Capital and Ethos Fund VII entered into a binding agreement with Brait whereby Ethos committed to invest R1.35 billion in Brait as part of an equity capital raise by Brait of at least R5.25bn and up to R5.6bn.
This comes after Ethos Capital announced a strategic equity partnership with Brait SE, which entailed providing a strong platform to maximise value through the realisation of assets in Brait’s portfolio and returning capital to shareholders in the medium term. The strategic partnership with Ethos, as part of a recapitalisation process at Brait, puts the company in a strong position for the future and marks the conclusion of an extensive process to materially reduce the debt on its balance sheet and maximise shareholder value.
Ethos Capital said it would offer the shares in the ratio of 58.47953 rights offer shares for every 100 existing Ethos Capital A ordinary shares held on the record date for its rights offer, which is January 24.
The rights offer price represents a 0.4 percent discount to the 10 day volume weighted average price of Ethos Capital’s A ordinary shares as of January 13. “Shareholders are advised that the company has received all necessary approvals to implement the Ethos Capital rights offer and the Ethos Capital rights offer is unconditional,” the group said.
However, the group added that its board reserved the right to decide not to proceed with the Ethos Capital rights offer until on the last day to trade in the A ordinary shares in Ethos Capital, in order to participate in the Ethos Capital rights offer, which is January 21.
Ethos Capital chief executive Peter Hayward-Butt said in an interview with Business Report in November that Ethos Capital was co-investing in Brait alongside Ethos Private Equity’s Fund VII to provide its shareholders with access to a high-quality asset base that complemented their existing investments and adding sector and geographic diversification. Brait is the owner of Premier Foods, Virgin Active, UK retailer Iceland and struggling UK clothing group New Look.
The strategic partnership between the two companies also involves Ethos Private Equity becoming the adviser to Brait at a materially lower cost to the existing advisory contract.