TN Asset Management bags big on Econet, EcoCash rights issue
Listed firms, Econet Wireless and EcoCash Holdings announced that they have completed their rights issues which saw both offers being fully subscribed.
In a circular to shareholders, Econet Wireless said, “This announcement relates to the renounceable rights issue (the “Rights Issue”) of 401,586,371 ordinary shares at a subscription price of US$0.0755 per each share, on the basis of 17.122 ordinary shares for every 100 shares already held, to raise US$30.3 million that has just closed.
“The Company wishes to thank Shareholders for demonstrating their support for the Company by participating in the Rights Issue that has just closed.”
The company had 401,586,371 ordinary shares worth US$30,3 million on offer and saw subscription in foreign currency or debentures account for 56,16 percent of the subscription, with subscription in local currency accounting for 0,45 percent and the remainder of 43,39 percent being taken by the underwriter TN Asset management.
In a similar worded notice, EcoCash Holdings told its shareholders that, “This announcement relates to the renounceable rights issue (the “Rights Issue”) of 1,604,220,688 ordinary shares at a subscription price of US$0.0189 per each share, on the basis of 61.925 ordinary shares for every 100 shares already held, to raise US$30.3 million that has just closed.
“The Company wishes to thank Shareholders for demonstrating their support for the Company by participating in the Rights Issue that has just closed.”
The company had 1,604,220,688 ordinary shares worth US$30,3 million on offer and saw subscription in foreign currency or debentures account for 35,32 percent of the subscription, with subscription in local currency accounting for 0,13 percent and the remainder of 64,54 percent being taken by the underwriter TN Asset management.
The debentures were issued in March 2017 as part of the US$128m capital raise to pay external creditors. The debentures are a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.
However, of the total debt of US$75,4 million the company issued an early redemption option in which US$14,8 million was redeemed by shareholders in July 2021.
The company indicated at the time to debenture holders that it had resolved to initiate early redemptions spread over time as this would give it the opportunity to manage its cash flows over an extended period of time.
Econet said early redemption will give it an opportunity to strengthen its balance sheet by reducing foreign currency exposure and minimise potential future exchange losses from a weakening Zimbabwe dollar.
The two companies were still trying to raise funds to clear their US$30,3 million part of the debt which matured in April this year and was yet to be settled.
In order to redeem the existing debentures in the capital of both companies Econet and its offshoot, EcoCash Holdings, announced their intention to raise US$30,3 million through a renounceable rights issue.
The two companies issued cautionary statements earlier in the year to alert shareholders of their intention to issue new ordinary shares through renounceable rights offer.
A type of share offering called a renounceable rights issue gives current owners the chance to purchase more shares in proportion to their current holdings. As a result, present owners have the option to purchase a specific number of additional shares at a reduced price that is often lower than the going stock price.-ebusinesweekly
