CMA gives Longhorn Publishers a go-ahead for 530M rights Issue

Simon Ngigi the Ceo of Longhorn Kenya
Simon Ngigi the Ceo of Longhorn Kenya

Listed Nairobi Securities Exchange Publisher, Longhorn Kenya limited has said that it has received an okay from the Capital Markets Authority to raise Ksh 530 million through rights issue.

The firm says that it will issue 126 million newly created shares at Ksh .4.20 at a ratio of 0.86 shares for every share held. Longhorn says the funds are intended to help support its expansion plans through digital platforms.

“We are working to enhance our product portfolio, especially bearing in mind the roll out of the government’s digital agenda for schools. We already have digital content that has been approved for use in schools, and we want to build this even further using some of the funds raised,” Mr Ngigi said.

Equity Investment Bank has been appointed the lead transaction advisor,Mboya, Wangong’u and Waiyaki and Deloitte the Legal Advisors and Reporting Accountant respectively.

BSD Group are the Marketing and Public Relations Advisor, while Sidian Bank (Formerly K-rep Bank) is the receiving bank.

Probably you are asking yourself, why Sidian Bank?

Our view is that because Centum influenced the decision as it owns controlling stakes in both Longhorn and Sidian Bank, a smart way to keep money in the chain.

Financial Results & Share Price Performance

Financials In its HY results released a few weeks back, Longhorn recorded a 70% growth in after-tax profit of Ksh 67.8 Million for the six months ended December 2015 against Ksh 39.9 Million posted the previous year in the similar period. The jump in profits was mainly attributed to a 56 per cent jump in turnover whereby it recorded sales worth Ksh 831 Million compared to Ksh 531 Million posted in the same period in 2014.

Share Price Performance

At the Nairobi Securities Exchange, Longhorn on Wednesday closed at Ksh 5.50, which is 48.65% above its 1 year low of 3.70 set on Dec 03, 2015. The counter has lost 36.42% YTD As shown in the chart below.Longhorn Kenya share Price