TransCentury Group Plc rights issue has commenced trading at the Nairobi Securities Exchange (NSE).
The infrastructure investment firm is seeking to raise KES 2.063 billion, which will be applied towards recapitalizing the business, reducing debt, and unlocking working capital for its underlying businesses.
The company’s shareholders will have until 23rd January 2023 to take up the 1,876,013,830 new ordinary shares, which are on offer at the price of KES 1.10 per share.
The results of the rights issue will be announced on 9th February 2023, and the new shares from the rights issue will be listed to commence trading at the NSE on 28th February 2023.
The rights issues began just weeks after the firm’s stock prices at the NSE had started to shade off, retailing below its discounted rights issue price offer of KES 1.10 per share.
By early this month, Transcentury’s stock prices at the Nairobi bourse were going for KES 0.87 per share, meaning that continued trading of its stocks through the bourse would have made it difficult for the company to raise the targetted KES 2.063 billion capital. This is because investors are likely to turn to the lower prices offered at the NSE compared to the firm’s discounted stock prices.
Cash-strapped companies always offer rights issues to raise capital by allowing existing shareholders to purchase new shares at a discount compared to the market trading price.