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Johannesburg - AltX-listed steel retailer Alert Steel [JSE:AET] said on Tuesday it plans to raise R120m through a rights offer, which has been partially underwritten for R102.5m.
At the same time, it intends to introduce a significant black economic empowerment (BEE) shareholder that will improve the group's empowerment credentials.
In terms of the rights offer, 4 285 714 286 new no par value ordinary shares will be offered to ordinary shareholders at a subscription price of 2.8 cents per rights offer share.
The funds raised from the rights issue will be used by Alert Steel to finalise its restructuring process, restructure its current debt, settle the purchase consideration of various acquisitions, provide the group with working capital and enhance its cash flow.
Alert Steel has entered into an agreement with certain of its major current shareholders, who will partially underwrite the rights offer for R58.5m, and its new BEE partner, Omphile Investments, a 100% black-owned company with investments primarily in the mining industry, who will underwrite the remaining R44m.
Chief executive Johan du Toit said that subsequent to the rights offer, Alert Steel will be 30% empowered in terms of the BEE codes.
"This investment is of great importance to us as it will help us in our future tenders for government business and major corporate transactions," he said.
At the same time, it intends to introduce a significant black economic empowerment (BEE) shareholder that will improve the group's empowerment credentials.
In terms of the rights offer, 4 285 714 286 new no par value ordinary shares will be offered to ordinary shareholders at a subscription price of 2.8 cents per rights offer share.
The funds raised from the rights issue will be used by Alert Steel to finalise its restructuring process, restructure its current debt, settle the purchase consideration of various acquisitions, provide the group with working capital and enhance its cash flow.
Alert Steel has entered into an agreement with certain of its major current shareholders, who will partially underwrite the rights offer for R58.5m, and its new BEE partner, Omphile Investments, a 100% black-owned company with investments primarily in the mining industry, who will underwrite the remaining R44m.
Chief executive Johan du Toit said that subsequent to the rights offer, Alert Steel will be 30% empowered in terms of the BEE codes.
"This investment is of great importance to us as it will help us in our future tenders for government business and major corporate transactions," he said.
