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Cape Town - The PSG-controlled agribusiness investor Zeder Investments wants to raise R500m in a rights issue to pursue opportunities the "market has rendered attractive", it was announced on Thursday evening.
The rights issue is not entirely surprising since Zeder had all but depleted its war chest last year after participating in a pre-listing rights offer for Pioneer Foods, a rights offer in unlisted Kaap Agri and buying a stake in fruit exporter Outspan International.
At the end of August, Zeder - which raised about R700m at listing in late 2006 - reported its cash pile was down to around R43m.
Since listing, Zeder has successfully assembled a wide-ranging portfolio of agribusinesses, the biggest by far being Pioneer Foods (held mainly via Kaap Agri) and KWV Limited.
Smaller investments are held in NWK, Agricol, MGK Business Investments, KLK Landbou, Outspan International and Suidwes Investments.
Recently Zeder declared its intention to hike its stake in wine and brandy producer KWV Limited from 25% to 34.9% - a development that would require funding of much more than its cash on hand.
Zeder said the rights offer would see 370 million new shares issued on the basis of 60 new shares for every 100 shares already held.
The new shares will be issued at 135c - a slight discount to Zeder's current market price, but well off the company's last stated net asset values of 205c/share (at unlisted share prices) and 269c/share (at see-through value).
Zeder said the rights offer share was not dependent on a minimum subscription amount being raised.
While the offer has not been underwritten, PSG - which holds a 38% stake in Zeder - has committed to following its rights to a point that would not see the group's stake exceed 49.99% in Zeder.
It seems a reasonable assumption that the handful of financial institutions that hold significant minority positions in Zeder will also follow their rights.
Zeder said it required the fresh injection of capital to pursue "certain identified investment opportunities that current market conditions have rendered attractive".
This, naturally, would include the proposed strengthening of Zeder's position in KWV Limited.
Other than the proposed KWV Limited transaction, Fin24.com believes Zeder might be looking at bolstering its direct stake in Pioneer Foods as well as scavenging for more shares in Cape-based fruit exporting entities.
The writer holds shares in Zeder Investments.
- Fin24.com
