LISTED Edgars Zimbabwe is seeking for the shareholders’ nod to raise $70 million through a rights offer geared towards capitalising business, the clothing company has announced.
BY FIDELITY MHLANGA
Already, an extra-ordinary general meeting (EGM) to deliberate the issue has been slated for June 16, 2020.
“The board of directors of Edgars has resolved that, subject to the approval of shareholders, the company be authorised to raise $70 000 000,” Edgars said in a circular.
“The board is proposing a renounceable rights offer to recapitalise Edgars by way of a rights offer of 274 745 630 ordinary shares of a nominal value of $0,01 each, at a rights offer price of $0,2548 per share, on the basis of five new ordinary shares for every six ordinary shares in issue as at the record date. The Rights offer shares represent 45,66% of the company’s enlarged ordinary share capital post the proposed rights offer.”
Shareholders will also debate a special resolution that the authorised share capital of the company be increased from $4 million comprising 400 million ordinary shares of a nominal value $0,01 each to $7 million comprising 700 million ordinary shares of a nominal value $0,01 each.
This resolution seeks to ensure that there are sufficient shares to give effect to the rights offer.
The EGM will also seek special resolution to redenominate the share capital of Edgars from United States dollars to Zimbabwe dollars in line with Statutory Instrument 142/2019 that effected re-introduction of the local currency as the sole legal tender through which every registered company is required to redenominate its share capital currently stated in US$ to Zimdollar.
The purpose of the rights offer is to further support Edgars expansion activities and augment working capital, hence consolidating the group’s balance sheet.
“The board has deemed it fit to support an equity raise and inject additional capital into the business so as to intensify productivity of existing footprint, widen and deepen product portfolio offered by the group’s credit and financial services, ensure sufficient depth and breadth of inventories,” Edgars said.
The clothing giant seeks to raise funds to engender productivity improvements through digitisation leveraging on data science and analytics for customer retention and increased market share through promulgating online shopping;
The company also projects to stimulate digital interactive platforms, enhance planning tools and manufacturing capacity refurbishment initiatives as well as extend its geographical footprint through the commissioning of new sites.
Subject to approval at the forthcoming EGM, letters of allocation in respect to the rights offer shares will be posted to shareholders from June 23, 2020.
It is expected that the rights offer shares will be listed on the Zimbabwe Stock Exchange with effect from July 27, 2020.
The clothing retail giant has 25 stores countrywide. It also owns 28 Jet Stores and Carousel garment manufacturing factory in Bulawayo.