Purple Group Limited has announced that it has received formal approval for its renounceable rights offer from the Issuer Regulation Division of the JSE Limited. The company has fulfilled all the suspensive conditions to the rights offer, marking a significant milestone for Purple Group.
The rights offer aims to raise a total of R105 million (one hundred and five million Rand) in gross proceeds. The offer is both partially committed and partially underwritten. A group of Purple Group shareholders, representing approximately 27.12% of the issued ordinary shares in the company, have provided irrevocable commitments to follow their rights in full. Additionally, Sanlam Investment Holdings Proprietary Limited, the underwriter of the rights offer, has agreed to underwrite the remaining ordinary shares not subscribed and paid for by existing shareholders.
Under the terms of the rights offer, Purple Group will offer 129,629,630 renounceable rights to subscribe for new Purple Group ordinary shares. Shareholders will be entitled to 10.20567 rights offer shares for every 100 Purple Group ordinary shares held, at a subscription price of 81 cents per rights offer share. This represents a discount of approximately 31.87% to the 7-day volume-weighted average price of Purple Group shares.
The rights offer shares will constitute approximately 9.25% of the company’s post-offer ordinary share capital. Shareholders will be able to trade the letters of allocation from May 24 to June 6, 2023, and the rights offer shares from June 7, 2023, onwards.
Several major shareholders, including Business Venture Investments, Base SPV Partnership A, Gajoder Investments Proprietary Limited, and Rae’s Creek Trust, have committed to follow their rights in full, amounting to a significant portion of the rights offer.
Purple Group has entered into an underwriting agreement with Sanlam Investment Holdings, which includes an underwriting fee of 2.0% of the underwriting commitment. The company has confirmed that the underwriter is capable of meeting its commitment.
Shareholders who wish to apply for excess rights offer shares beyond their entitlement will have the opportunity to do so. The allocation of excess shares will be determined by the directors based on the number of shares held by each applicant and the number of rights offer shares requested.
The rights offer circular, containing comprehensive details of the offer, will be made available on Purple Group’s website on May 22, 2023. Certificated shareholders will receive the circular and form of instruction on May 25, while dematerialized shareholders will receive them on May 29.
With the approval and completion of all necessary conditions, Purple Group’s rights offer has been de-risked, providing an opportunity for shareholders to participate in the company’s growth plans.
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