African Rainbow Capital (ARC) Investments yesterday announced plans for a R750 million rights issue to raise capital for its existing portfolio companies and investments such as Tyme, and for future acquisition opportunities.
The empowerment investment holding company said that under the rights offer, qualifying shareholders would receive 1.06579 rights offer shares for every 100 existing ARC Investments ordinary shares held.
The share price slipped 3.96% by late yesterday afternoon to R4.86. In its last financial year to June 30, 2023, ARC Investments’ net asset value a share increased 13.4% to R11.41 a share – the company’s share price is trading at a substantial discount to net asset value.
The directors said funds would be used for the continued expansion opportunities at Tyme, most notably through Tyme Global which was seeing success in the Philippines with GOtyme, which had already attracted 1 million customers with high customer activity rates.
New market expansions for Rain Group Holdings and continued development of its product offering, such as rainone, providing customers with both a mobile and fixed-wireless product offering, was planned.
The funds would also support the investment strategies of various fast-growing ARC Fund investee companies such as Autoboys, Linebooker and Apollo. The funds would also fulfil the general liquidity requirements of the ARC Fund.
“The additional capital of approximately R742.35m, is expected to be sufficient to meet the medium-term funding requirements of the ARC Fund, considering that a number of companies in the portfolio are maturing and that the combined portfolio is expected to become more cash generative during the next 12 months,” ARC directors said.
In addition, the ARC Fund, as part of its investment strategy, would take advantage of opportunities to monetise some of its investments through partial or total disposal. Rights offer shares trading was set to begin on December 4.
BUSINESS REPORT