The Capital Markets Authority (CMA) has approved plans by listed paints manufacturer Crown Paints Kenya Plc raise KSh 711.810 Million through a rights issue. Shareholders of Crown paints will be issued with one new ordinary share for each one held.
According to the information memorandum, the rights issue aims to give the listed firm the financial muscle needed to grow and survive effects of the COVID-19 pandemic.
The firm has already issued a notice requesting an extension of the April 30th deadline required for all listed firms to publish their audited 2020 end-year financials.
Crown Paints plan for rights issue proceeds
The paints maker intends to use the rights issue funds to roll out new products, repay its loans and finance its regional expansion program.
” The Authority has reviewed the application for exemptions in relation to the firm’s shareholders intention to take up their full rights and take up more, subject to availability during the rights issue,” said Wyckliffe Shamiah, CMA Chief Executive.
The paints manufacturer will make bi-annual updates to CMA on use of the proceeds of the rights issue in line with disclosures contained in the Information Memorandum provided to shareholders.
While the paints maker’s business outlook in Kenya is secure, its subsidiaries in Tanzania, Uganda and Rwanda have had a sluggish performance.
The Kenyan operation has been supporting these subsidiaries.