Purple Group Limited, a leading financial services provider, has unveiled its plans for a renounceable rights offer aimed at raising a maximum of R105 million from its shareholders. The funds will be utilized to support Purple Group’s expansion strategies, including acquisitions and the development of strategic projects that enhance shareholder value and improve client experience.
The company is set to launch the rights offer through the issuance of ordinary no par value shares in Purple Group, as detailed in the forthcoming Rights Offer Circular expected to be published on May 22, 2023. The final terms, including the subscription price per Rights Offer share and the entitlement ratio, will be announced on May 18, 2023, on the Stock Exchange News Service (SENS).
To ensure the success of the rights offer, Purple Group has secured irrevocable undertakings from committed shareholders, excluding their shares from the underwriting commitment. The specifics of these commitments will be disclosed in the finalization announcement and the Rights Offer Circular.
The decision to pursue a rights offer stems from Purple Group’s strategic growth ambitions for its subsidiary, EasyEquities, a trading platform. The company aims to accelerate product and regional expansion, driving capital growth by investing in talent, platforms, and partnerships. EasyEquities intends to expand internationally, with four target regions identified for market replication based on favorable setups and existing digital ecosystems.
The Rights Offer seeks to raise gross proceeds of R105 million through renounceable rights, allowing qualifying shareholders to subscribe for new Ordinary Shares at the designated Rights Offer Price and Ratio of Entitlement. Shareholders recorded on the register by the record date of May 26, 2023, will be eligible to participate.
In the event that not all Rights Offer Shares are taken up, Qualifying Shareholders will have the opportunity to apply for excess shares on the same terms and conditions. The allocation of excess shares will be determined based on an equitable distribution process, considering the number of shares held prior to the allocation.
Several major shareholders, including Business Venture Investments, Base SPV Partnership A, Gajoder Investments Proprietary Limited, and Rae’s Creek Trust, have committed to exercising their rights in full. These commitments, totaling 27.12% of all issued Ordinary Shares, will be further detailed in the finalization announcement and Rights Offer Circular.
The company emphasizes that shareholders should consult their tax and financial advisors to understand the tax implications of participating in the Rights Offer, as individual circumstances and tax jurisdictions vary.
Simultaneously, Purple Group’s subsidiary, EasyEquities, will also launch its own rights offer. It aims to raise R150 million, with a portion of the proceeds injected by Sanlam Investment Holdings Proprietary Limited (SIH), a 30% shareholder in EasyEquities. The capital will support local and international expansion initiatives, including the development of new business lines such as EasyCredit and a partnership with Sanlam Indie.
Purple Group’s rights offer and EasyEquities’ expansion plans signal the company’s commitment to seizing growth opportunities in the financial services sector, both locally and internationally. The rights offer presents an opportunity for shareholders to participate in the company’s strategic vision and contribute to its continued success.
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