Truworths seeks to raise ZWL$2,2bn in rights offer

LISTED clothing retailer, Truworths seeks to raise an estimated ZWL$2,2 billion additional working capital from a proposed a Renounceable Rights Offer of 384 067 512 shares saying if the plan is not implemented it will be unable to effectively sustain its operations and growth. It added that it will also face severe cash flow constraints, high finance costs and reduced working capital. A renounceable right is an offer issued by a corporation to shareholders to buy more shares of the company’s stock, usually at a discount.

The authorisation to proceed with the Renounceable Rights Offer will be sought by the Board from shareholders at the Extra ordinary general Meeting set for July 4.

The scheduled extraordinary meeting is expected to consider and if deemed fit, to pass with or without amendment, the approval for capital raising by way of a Renounceable Rights Offer.

“That the Directors be and are hereby authorised to raise ZWL$2 227 591 570 (Two billion, two hundred and twenty seven million, five hundred and ninety one thousand, five hundred and seventy Zimbabwe dollars) by way of a Renounceable Rights Offer to all shareholders, pro rata to their existing shareholding, being the offer of 384 067 512 (Three hundred and eighty four million, sixty seven thousand, five hundred and twelve) new ordinary shares of a nominal value of ZWL0,0001 each, at a Rights Offer subscription price of ZWL$5,80 (ZWL$580 cents) per share,” reads part of the circular to shareholders.

The firm said in order to sustain the viability of the business, the Board has decided to raise additional capital into the business so as to “increase working capital funding at a sustainable cost in light of the high interest rate environment, reduced borrowings, open new format Truworths Chain stores and improve the product assortment.”

The listed entity said if the Renounceable Rights Offer is not implemented, the company will face severe cash flow constraints, high finance costs and reduced working capital.

The Renounceable Rights Offer is also subject to an approval from the Zimbabwe Stock Exchange (ZSE), shareholders and approval of the Transaction by the Exchange Control department at the Reserve Bank of Zimbabwe for the issuance of shares to non-resident shareholders.

Based on the circular, the listing committee of the ZSE has granted a primary listing for and permission to deal in all renounceable Letters of Allocation relating to the new Rights Offer Shares between Friday, 14 July 2023 and Friday, 18 August 2023.

ZIMBABWE Stock Exchange (ZSE)

Based on the circular to shareholders, the Board has engaged an existing shareholder, Mega Market (Private) Limited to underwrite the Renounceable Rights Offer.

Mega Market has a shareholding in Truworths of 28,66 percent of the total issued share capital.

Truworths Limited is a company incorporated and domiciled in Zimbabwe whose shares are publicly traded.

Its core business is the retailing of clothing, footwear, textiles and accessories.
As at April 2023 the Group had a total of 46 stores nationwide, with over 11 577 square metres of store space.-chronicle